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Gender Related Development Index
• (GDI): compares the level of women’s development with that of both sexes
• Economic: income to man
• Social: school/ literacy to man
• Demographic: life expectancy to man
• Complete equality is 1.0
Gender Empowerment Measure • (GEM): compares ability of
women and men to participate in economic and political decision making.
• Economic indicators of empowerment: % of income & professional/technical jobs to (m)
• Political indicators of empowerment: % administration/ elected offices to (m)
• Complete equality is 1.0
OBJECTIVES
• Development Through Self-Sufficiency• Development Through International Trade• International Trade Approach Triumphs• Financing Development• Fair Trade
Path of Obstacles or Assistance
• Obstacles: 1) adopting policies that successfully promote development 2) Finding funds to pay for development
• 2 Models to Overcome: 1) international trade
• 2) self sufficiency
Development Through Self-Sufficiency
• “Socialist” approach to business: isolate LDC businesses from competition with MDC. Why?
• How it’s done? 1) High tariffs on imports 2) on imports 3) requiring licenses to import.
• Story of India: closed from foreign business: gov. controlled communications, transportation, power, insurance, and automakers.
Problem with the Self Sufficiency Alternative.
• 1) Protection of inefficient businesses: little incentive to improve quality, lower production costs, reduce prices, or increase production. Why?
• 2) Need for large bureaucracy: too many hands in the process = encouraged abuse & corruption.
Examples of the International Trade Approach
• The Four Asian Dragons: South Korea, Singapore, Taiwan, Hong Kong: focused on a few manufacturing goods and low labor costs.
• Petroleum-Rich Arabian States: Saudi, Kuwait, Bahrain, Oman, UAB.
Problems with the International Trade Alternative
• Uneven resource distribution: decrease price of one commodity
• Increased dependence on MDCs: over dependency on export at the cost of domestic food, clothing producation
• Market Decline: decline on the dependency on low-cost manufactured goods
International Approach Triumphs
• Late 20th century: trade increased more rapidly than wealth.
• 1) foreign companies allowed to set up shop 2) free trade 3) monopolies were eliminated 4) increased competition improved quality
• LDC that converted to international trade from self sufficiency grew 4%
World Trade Organizations
• WTO: works to reduce or eliminate trade restrictions, movement of money by banks, companies, and individuals.
• Protects intellectual property, copyright violations
• Critics accuse WTO of advocating for MDC at the expense of LDC
Foreign Direct Investment• FDI: Investments made by a
foreign company in the economy of another country.
• FDI grew from 130 billion to 1.5 trillion in ten years. Uneven distribution ¾ from MDC to MDC. LDC = 1/3 to China.
• (TNCs) Transnational Corporation: invests and operates in countries other than the one it’s headquarters in.
Financing Development• What’s the solution to LDC lack of
financing?• The World Bank: loans to reform
government, develop/ strengthen financial institutions, and implement transportation/social services.
• The IMF: provides loans to needy countries: intended to prevent global depression.
• Critics: 1) don’t function bc of poor engineering 2) fraud, waste, abuse of funds 3) inability to attract other investments.
Structural Adjustment Programs
• MDC fear LDC ability to repay loans. Solution?
• Structural adjustment program: 1) loan only what it can afford 2) target poor 3) divert investment to health/ education 4) private sector investment 5) reform gov… more efficiency, transparent and accountable.
Fair Trade• Benevolent Intention: Products
are made and traded according to standards that protect workers and small businesses in LDCs.
• (cooperatives) farmers/ artisans can borrow in order to invest. Targets poor women. Encouraged to reinvest in community KIVA.org
• Consumers pay more to support fair trade (bypass exploitive middlemen)
• Critics: 1) have found in some cases less than 1% of the sale goes to the worker. 2) Child labor. 3) Poor working conditions.