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Lesson – World Development and Inequalities [CA v3.2]
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Note : correspond à trois points du programme : « Un développement inégal et déséquilibré à toutes les échelles » ; « De nouveaux besoins pour plus de 9 milliards d’hommes en 2050 » ; « Mettre en œuvre des modes durables de développement ».
Summary Introduction............................................................................................1 1. World Inequalities................................................................................2 1.1. How to measure inequalities?..........................................................2 1.1.1. The Gross Domestic Product (GDP).............................................2 1.1.2. The GDP per capita...................................................................4 1.1.3. Some problems with the GDP.....................................................5 1.1.4. The Human Development Index (HDI).......................................11 1.2. A Divided World...........................................................................12 1.2.1. The world is divided into two halves..........................................12 1.2.1.1. Life expectancy................................................................12 1.2.1.2. Academic Ranking of World Universities...............................12 1.2.1.3. It's not a geographical North-South division.........................13 1.2.2. The Rich Countries..................................................................13 1.2.3. The Poor Countries.................................................................13 1.2.3.1. Most of the World is poor...................................................13 1.2.3.2. Why are they poor?...........................................................13 1.2.3.3. The BRICS: the Leading Emerging Economies.......................14 1.2.3.4. The Least Developed Countries (LDC)..................................16 1.2.3.5. The good news: it's getting better!......................................18 2. Growing needs and sustainable development.........................................19 2.1. Growing population, growing needs................................................19 2.2. Sustainable development..............................................................19
Introduction The 40 percent of the world’s population living on less than $2 a day accounts for 5 percent of global income. The richest 20 percent accounts for 75 percent of world income (2007 src). ᐅ We have strong international inequalities (between countries) and economic inequalities (within nation). The world is divided into two halves: rich and poor countries; The world population, which is growing, needs more and more
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(goods, services...); Sustainable development [développement durable] seems to be a solution.
1. World Inequalities 1.1. How to measure inequalities? 1.1.1. The Gross Domestic Product (GDP) What Is GDP? [1 min. 44] •
Gross Domestic Product (GDP) is the market value of all officially recognized final goods and services produced within a country in a given period of time.
"Gross" means that GDP measures production regardless of the various uses to which that production can be put (ex. : for investment in new fixed assets). "Domestic" means that GDP measures production that takes place within the country's borders. •
The Gross World Product is $72 000 billion (or $72 trillion) in 2012 ; U.S. GDP is $16 900 billion (November, 2013, BEA).
GDP Map c. 2007? (src)
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(http://dailybail.com/home/you-gotta-see-this-map-of-us-states-by-world-gdp.html)
(http://www.kdheks.gov/hcf/data_consortium/data_consortium_health_indicators/chart_images/US_states_map.JPG)
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GDP growth rate: indicates how much a country's production has increased (or decreased, if the growth rate is negative) compared to the previous year. Ex. : France, 2009, - 3% (INSEE).
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1.1.2. The GDP per capita •
GDP per capita (per person) in which total GDP is divided by the resident population on a given date, is often considered an indicator of a country's standard of living.
over $102,400 $51,200–102,400 $25,600–51,200 $12,800–25,600 $6,400–12,800 $3,200–6,400 Countries by 2012 GDP (nominal) per capita
$1,600–3,200 $800–1,600 $400–800 below $400 unavailable
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Illustration 1: $US GDP per capita, 2011 (src)
1.1.3. Some problems with the GDP •
Nominal / real GDP: the raw GDP figure is called the nominal, or current, GDP. When one compares GDP figures from one year to another, it is desirable to compensate for changes in the value of money – i.e. [id est = c’est-à-dire], for the effects of inflation or deflation. What Is Inflation? [1 min. 10]
Inflation: a persistent increase in the general price level of goods and services in an economy over a period of time. For example, suppose a country's GDP in 1990 was $100 billion and its GDP in
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Exchange rate problem: if the value of the Mexican peso falls by half compared to the US dollar ($), the Mexican GDP measured in dollars will also halve. It does not necessarily mean that Mexicans are poorer by a half => The Purchasing Power Parity (PPP): differences in purchasing power of a "basket of goods" across countries. For the purposes of many international comparisons, countries' GDPs or other national income statistics need to be "PPP-adjusted". The Big Mac Index: is published by The Economist [an English-language weekly news publication] as an informal way of measuring the purchasing power parity. The Big Mac Index is presumably useful because it is a relatively standardized product. How many Big Mac burgers you get for US$50? (The Economist, January, 2012):
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Some other problems with the GDP: Wealth distribution – GDP does not account for variances in incomes of various groups.
India nominal GDP per capita (IMF, 2012): $1500
(src)
Dharavi slum in Mumbai (former Bombay):
(src)
Ambani's House in Mumbai:
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(src)
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(src). More pictures at: http://www.vanityfair.com/society/2012/06/ambani-residence-exclusive-photos- slideshow
Richest People in the World – Top 10 List of Billionaire Men – 2013 (list)
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Non-market transactions: GDP excludes activities that are not provided through the market, such as household production and volunteer or unpaid services. As a result, GDP is understated. Underground economy: Official GDP estimates may not take into account the underground economy, in which transactions contributing to production, such as illegal trade and tax-avoiding activities, are unreported. Etc.
1.1.4. The Human Development Index (HDI) The Human Development Index (HDI) is a simple, approximate statistic devised to introduce non-income factors and rival traditional economic indicators (i.e. GDP). It is annually published by the United Nations Development Programme. The HDI (a value from 0 to 1) combines three dimensions: • • •
A long and healthy life: Life expectancy at birth; Education index: Mean years of schooling and Expected years of schooling; A decent standard of living.
World map by quartiles of Human Development Index in 2013 Very Low High Data High unavailable Medium (src) quartile = 1/4
12/20 Ex.: Norway 0.955 (No. 1); France 0.893 (No. 20) ; Tunisia 0.712 (No. 92); Afghanistan 0.374 (No. 175) [ranks in 2012].
1.2. A Divided World 1.2.1. The world is divided into two halves 1.2.1.1. Life expectancy
WHO (interactive version - flash) 2011 •
Another example: Mortality Due to Chronic Respiratory Diseases (2008) 1.2.1.2. Academic Ranking of World Universities
Update: Academic Ranking of World Universities 2013 (Top 200 - Shanghai Jiao Tong University)
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South = Australia, New-Zealand ... North = Pakistan, India, Egypt …
1.2.2. The Rich Countries Richest Country in the World – Top 10 List (GPD/capita in PPP) – 2012 According to economists Daron Acemoglu of MIT and James Robinson of Harvard University (Why Nations Fail ?, 2012): Politics makes the difference. Countries that are extending political and property rights as broadly as possible,
while
enforcing
laws
and
providing
some
public
infrastructure -- experience the greatest growth over the long run. By contrast, countries in which power is wielded by a small elite (~ oligarchiy 1) either fail to grow broadly or wither away after short bursts of economic expansion. So, good institutions (providing political stability, innovations …) are the key. (Also of use: an educated population, investments, natural resources …)
1.2.3. The Poor Countries 1.2.3.1. Most of the World is poor • •
More than 80% of world population is in poor countries. List of some of the poorest countries in the world – Top 10 of poor Nations from Africa 1.2.3.2. Why are they poor?
•
See: supra.
•
lack of political and social stability. The form of government is often authoritarian in nature.
• 1
extensive political corruption
Called "extractive" political systems by Acemoglu and Robinson.
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ongoing and widespread conflict (including civil war or ethnic clashes)
World Bank, Animation: Coalitions Against Corruption, 2011. 1.2.3.3. The BRICS: the Leading Emerging Economies •
Emerging Economies: An emerging economy [pays émergent] is a nation in the process of fast economic growth and industrialization. The seven largest emerging economies by GDP are the BRICS countries, as well as MIKT (Mexico, Indonesia, South-Korea and Turkey).
Illustration 2: Newly industrialized countries as of 2013 [src] •
BRICS is the acronym for an association of five major emerging national economies:
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(src)
16/20 Brazil, Russian Federation, India, People's Republic of China (PRC) and South Africa. •
The BRICS members are all developing countries (except Russia), but they are distinguished by their large sizes (populations, GDPs... - ex.: PRC GDP $9 trillion 2013), fast-growing economies and significant influence on regional and global affairs; all five are G-20 members. As of 2013, the five BRICS countries represent almost 3 billion people, with a combined nominal GDP of $16 trillion (~ USA GDP). 1.2.3.4. The Least Developed Countries (LDC)
[French:
Pays
les
moins
avancés
or
PMA]
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Illustration 3: World map of the least developed countries (UN, 2013) (src)
18/20 48 countries in 2011. The majority of LDCs are in Sub-Saharan Africa. 1.2.3.5. The good news: it's getting better!
Rosling, Hans, 200 Countries, 200 Years, 4 Minutes, 2010 (real GDP in PPP per capita) [4 min. 48] (BBC); PDF Chart 2012. •
In 1800, income per person was low and life expectancy was very short in all countries.
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Health is better everywhere today, even in the poorest countries.
src)
(
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Income is much higher in most, but not all, countries today.
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Most people today live in “middle income” countries
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But the income and health gaps between countries are larger today.
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2. Growing needs and sustainable development 2.1. Growing population, growing needs •
Earth Population: 7.1 billion (2013). Projection: 9 billion (circa 2050).
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More than 90% of world population growth is in the poor countries.
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They need more and more goods and services:
(src)
2.2. Sustainable development [French : Développement durable] A "development that meets the needs of the present without compromising the ability of future generations to meet their own needs" (1987).
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(src)
World Bank, The Story of Neeraj and Amit, 2011 [3 min.]
Conclusion [to be done in the classroom, by the class]
