Measures of development

The Changing Economic World

The economy is the state of a country or region in terms of the production and consumption of goods and services and the supply of money. There have been MAJOR changes to the global economy over time;

1. The growth of Newly Emerging Economies such as China and India or the BRIC economies

2. The emergence of major regional trading blocs like the European Union

3. Many High Income countries have experienced deindustrialisation – the loss of manufacturing industries

4. World trade has GROWN, increasing amounts of goods are moving around the world

5. Trade is more OPEN – there are fewer barriers to global trade

6. Some countries are stuck in poverty – these are known by the UN as the Least Developed Countries

7. Major TNCs have had an impact on the economy

8. The rise of quaternary industries and digital industries has been witnessed

Different economic and social measures of development

Development relates to “the progress of a country in terms of economic growth, the use of technology and human welfare.”

Development levels vary around the world and we can study this on a local scale, and consider with our own community how different groups of people on one estate might be wealthier and have a better quality of life than others. We could look at development a national scale, and consider how health and wealth change across the British Isles (life expectancy is lower in Scotland than it is in England for example). The last scale we can look at is globally, because there are huge differences between the quality of life between countries and continents. There are 3 very broad groups of countries;

• Low income country (LIC) – countries that have a GNI per capita of $1,035 or LESS according to the World Bank. These are poorer countries that have mainly primary jobs such as farming and mining.  Countries include Bangladesh and Mali.
• High income country (HIC) - a country that has a GNI per capita of $12,535 or above according to the World Bank. These are richer countries that have lots of industry and service jobs such as the UK and Japan.
• Newly Emerging Economies (NEE) - Countries that have begun to experience high rates of economic development, usually with rapid industrialisation. They differ from LICs in that they no longer rely primarily on agriculture, have made gains in infrastructure and industrial growth, and are experiencing increasing incomes and high levels of investment. E.g. Brazil, Russia, China and South Africa (the so-called BRICS countries).

There are a huge number of measures that can be used to measure the level of Development of a place.  These measures can be classified as;
• Social – relating to the development of the people of the place and;
• Economic, relating to the finances and wealth of the place.
Some countries may have imbalances in these measures, so a country may have very high levels of wealth and economic development, but poor levels of political freedom so poor political and social development.  It is therefore better to look at a NUMBER of different measures of development of places before coming to a judgment about its level of development.  

 

The most powerful individual number or measure is probable the Human Development Index, because it combines together economic and social measures into one figure.  However, I quite like the Happy Planet Index as an alternative! Surely if people are ranked as happy then their country or region is developed!

The Exam board expects you to know the definitions below, but there are many other Indicators of development that you could investigate;

1. GNI per head - Gross national income is a measure of the country’s wealth. GDP is part of GNI. It includes the total value of goods and services produced within a country (i.e. its Gross Domestic Product), together with its income received from other countries (such as interest and dividends), minus similar payments made to other countries. So if a British-based company such as BP sends profits back to the UK our GNI is enhanced, whilst profits flowing out of the country from a company such as Nissan to Japan will count to Japan’s GNI and not the UKs.  GNI is therefore different to GDP because it includes it!
2. Human Development Index (HDI) – This is a composite (combined) measure that considers life expectancy, GNI and an education index to give a value between 0 and 1, 1 being the most developed.  This is powerful as it includes both economic and social factors.
3. Birth Rates - How many babies are born per 1000 people in a population per year.  We tend to find that the poorest countries have high birth rates, and wealthier countries have lower births rates.  This is because poorer countries have high replacement rates to compensate for high infant mortality, poorer access to family planning and contraception, and a tradition for large family size to supplement a largely agricultural workforce.
4. Death rates - How many people die per 1000 people in a population per year. This is becoming less useful as a measure of development, as death rates fall due to imported medicine and technology in many poorer countries.  It would be better to look at CAUSE of death, as in HICs it will be wealth and age related illnesses
5. Infant mortality - How many babies die per 1,000 live births per year.  This is a useful measure as it indicates the medical systems in the country and how well the most vulnerable in society, the very young, are protected and looked after in their early years.
6. People per doctor - How many people there are for every doctor in a country or place.  Again, this indicates how much money is available in a country for the training and recruitment of doctors, which has an instant knock on effect on the well-being and quality of life of a person.
7. Literacy rate - What percentage of the country is able to read and write as adults.  This is another social measure, and helps to indicate the standard of education within a country or place.
8. Access to safe water - What percentage of people have access to sanitary and safe water that is free from bacteria and parasites.  This is something we take for granted in the UK, but according to Water.org 780 million people lack access to safe water and 3.4million die every year from a water related disease.
9. Life expectancy - The average age a person can expect to live to at birth.  This is a very useful indicator as it reveals how good food security, water quality, shelter and medical care are in a country.

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