Where Does Level of Development Vary by Gender?

C9K3

OBJECTIVES

• Gender-Related Development Index• Gender Empowerment

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

Why Do LDCs Face Obstacles to Development?

C9K4

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.

Development Through International Trade

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.

Interesting Perspective