Chapter 10 Test

indicators of progress

HDI, GNI per capita, education, life expectancy

Purchasing Power Parity (PPP)

an adjustment made to the GNI to account for differences among countries in the cost of goods. For example, if a resident of country A has the same income as a resident of country B but must pay more for a Big Mac or a Starbucks latte, the resident of country B is better off.

consumer goods

products and services that satisfy human wants directly. Part of the wealth generated in developed countries is used to purchase goods and services. These mainly include: -Motor vehicles -Phones -Computers

Europe's Sovereign Debt Crisis

- economic difficulties call into question the region's ability to continue supporting the international trade development path - the adoption of the euro by countries with weaker economies burdened the European economy

Factors of the low GII ranking of the United States

-Compared with other very high HDI countries, the United States has a much higher birth rate among teenage women and a higher mortality rate among women during childbirth. -The percentage of women in the national legislature is lower in the United States than in other high HDI countries.

Results of Structural Adjustment

-Cuts in health, education, and social services that benefit the poor. -Higher unemployment. -Loss of jobs in state enterprises and civil service. -Less support for those most in need, such as poor pregnant women, nursing mothers, young children, and elderly people.

2 indicators of reproductive health

-Maternal Mortality rate -Adolescent fertility rates

Reasons for failed infrastructure in Africa

-Projects don't function as intended because of faulty engineering. -Recipient nations squander or spend aid on armaments, or the aid is stolen. -New infrastructure does not attract other investment.

economic, social, and environmental goals met by fair trade

-Raising the incomes of small-scale farmers and artisans by eliminating some of the intermediaries. -Distributing the profits and risks associated with production and sale of goods more fairly among producers, distributors, retailers, and financiers. -Increasing the entrepreneurial and management skills of the producers. -Promoting safe and sustainable farming methods as well as working conditions, such as by prohibiting the use of dangerous pesticides and herbicides and by promoting the production of certified organic crops

Typical reforms of a structural adjustment program

-Spending only what it can afford. -Directing benefits to the poor, not just the elite. -Diverting investment from military spending to health and education spending. -Investing scarce resources where they will have the most impact. -Encouraging a more productive private sector. -Reforming the government, including making the civil service more efficient, increasing accountability in fiscal management, implementing more predictable rules and regulations, and disseminating more information to the public.

3 eras when co-ops were successful

-The first era was during the Great Depression of the 1930s, when people living in desperate poverty banded together to improve their lives through self-help. Cooperatives were especially important in bringing electricity to rural areas where population density was too low for private companies to serve profitably. -The second era came in the 1960s and 1970s, as part of the counterculture movement. Young people who felt alienated from profit-making corporations banded together to open grocery stores and craft shops. -The third—and current—era began around 2000. Hundreds of cooperatively owned grocery stores have been opened to provide places to buy healthier food than is available in large supermarkets. Local farmers, who are typically unable to sell through the large supermarket chains, have a place to sell their locally raised and grown meat and produce, as well as national brands produced without chemicals and GMOs.

GNI in developing vs developed countries

-The share of GNI accounted for by the primary sector has decreased in developing countries, but it remains higher than in developed countries. The low share in developed countries indicates that a handful of farmers produce enough food for the rest of society. -The share of GNI accounted for by the secondary sector has decreased sharply in developed countries and is now less than in developing countries. -The share of GNI accounted for by the tertiary sector is relatively high in developed countries, and is now growing in developing countries.

Key elements of the self- sufficiency path

-limit the import of goods from other places. Three widely used barriers include setting high taxes (tariffs) on imported goods to make them more expensive than domestic goods, fixing quotas to limit the quantity of imported goods, and requiring licenses in order to restrict the number of legal importers. -Fledgling businesses are nursed to success by being isolated from competition with large international corporations. Such insulation from the potentially adverse impacts of decisions made by businesses and governments in developed countries encourages a country's fragile businesses to achieve independence. -Investment is spread as equally as possible across all sectors of a country's economy and in all regions. -Incomes in the countryside keep pace with those in the city, and reducing poverty takes precedence over encouraging a few people to become wealthy consumers.

developed country

A country that has progressed relatively far along a continuum of development.

developing country

A country that is at a relatively early stage in the process of development

cooperative store

A member-owned, member-governed business that operates for the benefit of its members according to common principles agreed upon by the international cooperative community. Is owned by the people who shop in the store rather than by a corporation. A co-op is... -democratically governed by a member-elected board rather than appointed by a corporation owner. -Is financed primarily by investments made by the member-owners rather than by commercial lenders. -Is controlled by people living in the community rather than by distant shareholders. -Educates the public on the importance of sustainable development rather than hiding information about poor working conditions. -Helps other cooperatives through sharing expertise and sharing of sources of fair trade products rather than competing with other cooperatives. -Helps to improve the community in which the cooperative is locating rather than seeking to extract the maximum profit out of the community.

Rostow Model of Development

A pioneering advocate of the international trade approach was W. W. Rostow, who in the 1950s proposed a five-stage model of development 1) traditional society- not yet started a process of development. 2) preconditions for take off- An elite group initiates innovative economic activities. 3) take off- Rapid growth is generated in a limited number of economic activities MDC's 4)drive to maturity- Modern technology, previously confined to a few takeoff industries, diffuses to a wide variety of industries 5) age of mass consumption- The economy shifts from production of heavy industry, such as steel and energy, to consumer goods, such as motor vehicles and refrigerators.

development

A process of improvement in the conditions of people through diffusion of knowledge and technology.

World Bank

A specialized agency of the United Nations that makes loans to countries for economic development, trade promotion, and debt consolidation. Its formal name is the International Bank for Reconstruction and Development.

fair trade

Alternative to international trade that emphasizes small businesses and worker owned and democratically run cooperatives and requires employers to pay workers fair wages, permit union organizing, and comply with minimum environmental and safety standards. The fair trade movement focuses primarily on products exported from developing countries to developed countries. Sustainability is promoted by offering better trading and working conditions for producers and workers in developing countries.

Human Development Index (HDI)

An indicator constructed by the U.N. to measure the level of development for a country through a combination of income, education, and life expectancy. The highest HDI possible is 1.0, or 100 percent. Each country gets an overall HDI score based on these three factors -A decent standard of living. -A long and healthy life. -Access to knowledge

Inequality in developing countries

Brazil and Turkey are among the world's largest and most populous countries. At the national scale, the two countries fall somewhere in the middle of the pack in terms of HDI. The two countries have similar HDI scores, but Brazil has a lower IHDI, indicating more inequality in Turkey. Inequality can also be seen through differences in GNI per capita among states or provinces within the countries. In Turkey, wealth is much higher in the western part of the country, closest to Europe. In Brazil, wealth is highest along the east coast, especially in the country's largest city, São Paulo

core-periphery

Core countries have high levels of development, a capacity at innovation and a convergence of trade flows. Periphery countries usually have less development and are poorer countries. The relationship between developed countries and developing countries is often described as a north-south split because most of the developed countries are north of the equator, whereas many developing countries are south.

Fair Trade for Workers

Critics of Normal Trade: Minimal government oversight of working conditions, workers have long hours in poor conditions at low pay, child/forced labor, health problems from poor sanitation and injuries, injured, ill, and fired workers not compensated; FT: Paid fair wages, right to unions and collective bargaining, increase environmental and safety standards

Fair Trade for Producers

Critics of normal trade: Only a small percentage of profits go back to product makers; Fair trade: 1/3 of profits go back to producers in LDCs, increases incomes of small farmers and artisans by eliminating some intermediaries, distributes profits and risks of production, increase entrepreneurial and management skills in producers, promote safe and sustainable farming methods and working conditions (Organic)

Inequality in developed countries

Developed countries have regional internal variations in GNI per capita that are less extreme than in developing countries. Through most of the twentieth century, the gap between rich and poor narrowed in developed countries. Inequality was reduced because developed countries used some of their wealth to extend health care and education to more people and to provide some financial assistance to poorer people. Since 1980, however, inequality has increased in most developed countries, including the United States and the United Kingdom

Structural Adjustment Program

Economic policies imposed on less developed countries by international agencies to create conditions encouraging international trade, such as raising taxes, reducing government spending, controlling inflation, selling publicly owned utilities to private corporations, and charging citizens more for services.

Millennium Development Goals

Eight goals adopted by the U.N. in 2002 to reduce disparities between developed and developing countries by 2015.

Health and Medical Indicators of the HDI

From the many health and medical indicators, the U.N. has selected life expectancy at birth as the contributor to the HDI. A baby born this year is expected to live on average to age 71 worldwide, to 80 in developed countries, and to only 57 in sub-Saharan Africa. People are healthier in developed countries than in developing ones. When people in developed countries get sick, these countries possess the resources to care for them. The number of young people is six times higher than the number of older people in developing countries because of the improved healthcare, whereas the two are nearly the same in developed countries. Better health and welfare also permit babies to survive infancy in developed countries. About 94 percent of infants survive and 6 percent die in developing countries, whereas in developed countries more than 99.5 percent survive.

Development regions

Geographers divide the world into two developed regions and seven developing regions. Each region has an overall HDI score. Sub-Saharan Africa and South Asia are the regions with the two lowest HDI scores.

International Trade path

In the international trade model, countries open themselves to foreign investment and international markets. International trade became more popular beginning in the late twentieth century. Among the first places to adopt the international trade path were South Korea, Singapore, Taiwan, and Hong Kong, known as the "four dragons."

Self-sufficiency approach

In the self-sufficiency model, countries encourage domestic production of goods, discourage foreign ownership of businesses and resources, and protect their businesses from international competition. For several decades after it gained independence from Britain in 1947, India was a leading example of the self-sufficiency strategy.

Foriegn Direct Investment

Investment made by a foreign company in the economy of another country. FDI has grown rapidly since the 1990s, from $130 billion in 1990 and $1.5 trillion in 2000 to $16.4 trillion in 2013. The major sources of FDI are transnational corporations that invest and operate in countries other than the one in which the company headquarters are located.

Microfinance for Development

Many would-be business owners in developing countries are too poor to qualify for regular bank loans. An alternative source of loans is microfinance, which is provision of small loans and other financial services to individuals and small businesses in developing countries that are unable to obtain loans from commercial banks. A prominent example of microfinance is the Grameen Bank, which was established in 1977. Based in Bangladesh, Grameen specializes in making loans to women, who make up three-fourths of the borrowers

Inequality-adjusted HDI (IHDI)

Modification of the HDI to account for inequality within a country. If the IHDI is lower than the HDI, the country has some inequality; the greater the difference between the two measures, the greater the inequality. The lowest scores (highest inequality) are in sub-Saharan Africa and South Asia.

Fair Trade for Consumers

Most Products: Food bought and co-op groceries; 1st Era: Great Depression; 2nd Era: 1960s and 1970s (Counter-culture movement); 3rd Era: 2000s-now- Buy healthier, local, organic, and non-GMO; Connect with producers; Cut cost on exploitative intermediaries

National Legislature dimension of economic empowerment

No particular gender-specific skills are required to be elected as a representative and to serve effectively. But in every country of the world, both developed and developing, fewer women than men hold positions of political power. one country has a national parliament or congress with a majority of women: Rwanda. The lowest rates are in Southwest Asia & North Africa. In the United States, 20 of 100 senators and 84 of 435 representatives were women in 2015.

3 sets of standards that distinguish fair trade

One set applies to producers, a second set to workers on farms and in factories, and a third set to consumers, especially those living in developed countries.

3 categories of jobs

Primary Sector, Secondary Sector, Tertiary Sector

two paths to development

Self-sufficiency path and international trade path

Sustainable Development Goals

Seventeen goals adopted by the U.N. in 2015 to reduce disparities between developed and developing countries by 2030.

GII over time

The U.N. has found that gender inequality has declined since the 1990s. The greatest improvement has been in Southwest Asia & North Africa.

Value Added

The gross value of the product minus the costs of raw materials and energy. The value added per capita is around $67 per hour in the United States compared to around $16 in Mexico

Adolescent fertility rate

The number of births per 1,000 women ages 15 to 19

Pupil/teacher ratio

The number of enrolled students divided by the number of teachers

Maternal Mortality Rate

The number of women who die giving birth per 100,000 births

Literacy Rate

The percentage of a country's people who can read and write.

Female labor force participation rate

The percentage of women holding full-time jobs outside the home

Secondary Sector

The portion of the economy concerned with manufacturing useful products through processing, transforming, and assembling raw materials.

Primary Sector

The portion of the economy concerned with the direct extraction of materials from Earth's surface, generally through agriculture, although sometimes by mining, fishing, and forestry.

Tertiary Sector

The portion of the economy that involves the provision of goods and services to people in exchange for payment, such as retailing, banking, law, education, and government

Productivity

The value of a particular product compared to the amount of labor needed to make it. Workers in developed countries produce more with less effort because they have access to more machines, tools, and equipment to perform much of the work.

Gross National Income (GNI)

The value of the output of goods and services produced in a country in a year, including money that leaves and enters the country. By dividing GNI by total population, it is possible to measure the contribution made by the average individual toward generating a country's wealth in a year. For example, GNI in the United States was approximately $17.8 trillion in 2014, and the population was approximately 319 million, so GNI per capita was approximately $55,860.

Forming the access to knowledge component of HDI

To form the access to knowledge component of HDI, the U.N. combines two measures of years of schooling: -Years of schooling for today's adults. This measures the number of years that the average person aged 25 or older in a country has spent in school. Adults have spent an average of 11.5 years in school in developed countries, compared to only 4.7 years in South Asia and sub-Saharan Africa. -Expected years of schooling for today's youth. This measures the number of years that the U.N. forecasts an average 5-year-old will spend in school. The U.N. expects that 5-year-olds in developed countries will spend an average of 16.3 years in school; in other words, roughly half of today's 5-year-olds will graduate from college in developed countries. On the other hand, the expected average is 9.3 years in sub-Saharan Africa and 10.2 years in South Asia

World Trade Organization (WTO)

To promote the international trade development model, countries representing 97 percent of world trade established the World Trade Organization (WTO) in 1995. The WTO works to reduce barriers to international trade in two principal ways. First, through the WTO, countries negotiate reduction or elimination of international trade restrictions on manufactured goods. The WTO also promotes international trade by enforcing agreements

Immanuel Wallerstein

US Geographer and dependency theorist who explained economic development in 1974 using a model of capitalist world economy. (Core-Periphery model; divided the world into three types according to how they fit into the global economy) Since the original formulation of world systems theory, an increasingly important element has been the emergence of countries classified as semi-periphery. These are countries that are either intermediate in level of economic development or situated close to both core and periphery regions.

2 major lenders to developing countries

World Bank and International Monetary Fund (IMF). The World Bank and IMF were conceived at a 1944 United Nations Monetary and Financial Conference in Bretton Woods, New Hampshire, to promote economic development and stability after the devastation of World War II and to avoid a repetition of the disastrous economic policies that contributed to the Great Depression of the 1930s

Gender and Employment

Worldwide, 51 percent of women work outside the home, compared to 77 percent of men. In general, women in developed countries are more likely than women in developing countries to hold full-time jobs outside the home. South Asia and Southwest Asia & North Africa have substantial gaps between male and female labor participation, whereas East Asia and sub-Saharan Africa have smaller gaps

Secondary school dimension of economic empowerment

Worldwide, 54 percent of women have completed some secondary (high) school, compared to 64 percent of men. In North America, girls are more likely than boys to complete some high school, and boys are slightly ahead in Europe. In developing countries, boys are much more likely than girls to be high school graduates. The gap in education between girls and boys is especially high in South Asia.

International Monetary Fund (IMF)

an international organization that acts as a lender of last resort, providing loans to troubled nations, and also works to promote trade through financial cooperation

2 primary sources of finance

direct investment by transnational corporations and loans from banks and international organizations.

Stimulus Strategy

during a downturn, governments should spend more money than they collect in taxes. Governments should stimulate the economy by putting people to work building bridges and other needed infrastructure projects. Once the economy recovers, they say, people and businesses will be in a position to pay more taxes and pay off the debt. In the United States, the stimulus strategy was initially employed by Presidents Bush and Obama to help the country recovery from the severe economic downtown in 2008.

Gender Empowerment

empowerment refers to the ability of women to achieve improvements in their own status—that is, to achieve economic and political power. Empowerment is measured by the percentage of seats held by women in the national legislature and the percentage of women who have completed some secondary school.

Austerity Strategy

government should sharply reduce taxes so that people and businesses can revive the economy by spending their tax savings. Spending on government programs should be sharply cut as well in order to keep the debt from swelling and hampering the economy in the future. After the success of Tea Party candidates in 2010, more attention was paid to the austerity strategy.

Reproductive health

issues of safe sex, prevention and treatment of STIs, contraception, fertility and infertility, sexual health, pregnancy, and childbirth. Poor reproductive health is a major contributor to gender inequality around the world. The U.N. includes reproductive health as a contributor to GII because in countries where effective control of reproduction is universal, women have fewer children, and maternal and child health are improved. Women in developing regions are more likely than women in developed regions to die in childbirth and to give birth as teenagers. Every country that offers women a full range of reproductive health options has a very low total fertility rate.

Gender-Related Development Index (GDI)

measures the gender gap in the level of achievement for the three dimensions of the Human Development Index: income, education, and life expectancy. The GDI uses the same methodology as the HDI. the average HDI for all females in the world (.655) is .920, or 92 percent of the average HDI for all males (.712). The average in developed regions is .975, indicating close to parity, whereas the average in developing countries is .904. The lowest scores are in South Asia, sub-Saharan Africa, and Southwest Asia & North Africa

Gender Inequality Index (GII)

measures the gender gap in the level of achievement in three dimensions: reproductive health, empowerment, and the labor market. The GII is higher in developing countries than in developed ones. Sub-Saharan Africa, South Asia, Central Asia, and Southwest Asia and North Africa are the developing regions with the highest levels of gender inequality. Reproductive health is the largest contributor to gender inequality in these regions. South Asia and Southwest Asia and North Africa also have relatively poor female empowerment scores. At the other extreme, 10 countries in Europe have GIIs less than 0.1, meaning that men and women are nearly equal. In general, countries with high HDIs have low GIIs and vice versa.

International trade triumphs

optimism for the model is based on 3 observations- 1. developed countries of Europe and North America were joined by others in Southern and Eastern Europe, as well as Japan 2. developing countries contained an abundant supply of natural resources sought by manufacturers and producers in developed countries 3. a country that concentrates in international trade benefits from exposure to the demands, needs, and preferences of consumers in other countries

Microfinance

provision of small loans and other financial services to individuals and small businesses in developing countries