World Economic Development: Measurement and Problems – UPSC

In this article, You will read World Economic Development: Measurement and Problems – for UPSC (Economic Geography).

Economic Geography vs Economics

  • Economics is rated to the policies and factors which would lead to a profit of a particular organizational set up such as industrial input cost, output, taxation, etc.
  • Economic geography deals with the factors which determine why a particular industry or organizational setup is located at a certain place. It deals with the spatial location of a particular industry.

Economic Geography

  • Economic geography is concerned with how man interacts with the environment for economic benefits.
  • It is a discipline which is based on the spatial pattern of the resources, man’s economic activity, and his interaction with the given environment.
  • There are three approaches in economic geography:
    • Empirical approach: it is based on direct observation of what man is doing at a particular place. It is not very much in air now a day.
    • Functional approach: In this approach interaction between natural resources and man is studied. It answers the question – who gets what, where, and how?
    • Environmental deterministic approach: It states that man’s economic activity has been determined by the natural environment and economic level is the manifestation of physical conditioning. The theory has become obsolete due to technological advancement. Man has responded to the vagaries of nature.
  • Economic geography is the branch of geography and can be divided into four major fields such as:
    • Agriculture geography
    • Industrial geography
    • Transport geography
    • Development geography
  • Economic geography in recent years has been primarily concerned with understanding uneven economic development across the globe.
  • The focus of geographers has now been shifted from exploitation of resources to geography for human welfare.

World Economic Development

  • Economic geography has its origin in the late 19th century, which emphasizes the spatial location of commodities and raw materials and related these locations to physical geography and the development of transport networks.
  • Commercial geography dominated until the mid 20th century and was mostly factually based and took place within the broader framework of Regional geography. Since the 1950s, predominantly descriptive geography has given way to one focused more on economic theory.

Quantitative Revolution Phase

  • Initially in the newly emerging economic geography, these theories were mainly derived from Neo-Classical economics and assumed that the market system was a rational and efficient distributor of resources and wealth, the political, social, and cultural aspects. And problems associated with resources and wealth distribution were ignored.
  • These models did not, however accurately reflect the complexities of the real world, and economic geographers after the 1960s began to adopt theories that allowed them to focus upon the social consequence of economic actions.
  • The theories of Karl Marx, which suggested that the shape of society was closely tied to the organization of production, were particularly influential not just in economic geography but in human geography generally, where they formed the basis of what came to be known as Radical Geography.
  • Marxist theory, which implies that geography of production and the geography of society are inextricably linked, remain important to studies of the relationships between social structure and economic activities at a variety of geographical scale.

Contemporary Development

  • Economic relationships are not static and with time it changes just like the world of Globalisation.
    • Ex. Tiger economies of Pacific rim, Shell oil company in Niger delta region in Nigeria.
  • At a regional scale, economic geographers have always been concerned to analyze the importance of the concentration of particular industries and land uses in certain regions.
  • The economies of highly industrialized countries have become largely consumer-based, and increasing attention is now being given by economic geographers to patterns of consumption as well as production.
  • Another recent theme has been the sustainability of particular economic activities.
  • Over the past 20 years, economic geography in all its form has become more critical and varied and more concerned with detailing the uneven distribution of wealth and well-being. A broad shift in concern can be identified from the geography of resource exploitation to the geography of human welfare in all parts of the world.
Economic Growth vs Development

Growth

  • Growth is the quantitative term which has a materialistic connotation
  • It is calculated on the basis of GDP, GNP, NNP, etc, and the indices are based on economic values such as production, input, output, import, export, and monetary values.
  • Leads to the capitalistic society
  • It enhances the set of disparity as after results of concentration of wealth in few hands which leads to regional disparity, interpersonal disparity, etc. The wave of growth is directed towards the capitalistic region
  • It is a temporal concept and vertical analysis of the society is the basis i.e. the sections, castes, etc

Development

  • Development is a qualitative term which has the humanistic connotation
  • It is measured by human and social indexes like per capita consumption, sex ratio, literacy rate, the standard of living, life expectancy, mortality rates, HDI, etc.
  • Leads to a socialistic and welfare society.
  • It brings equilibrium over the landscape as it is based on distributive justice. Waves of growth is directed towards the poorer region
  • It is the spatial concept and is based on historical analysis.
  • However, economic growth and development can’t be segregated- one is means while the other is the goal/end. Without economic growth, development is a misnomer. Economic impulses are required to trigger developmental fumes.
  • Economic growth is the prerequisite to the developmental process and the constant growth process can only augment the waves of development over the landscape which can mitigate the disparities.
  • Economic growth initiates the process but development is desirable.
Indexes of measurement of economic development
Indexes of measurement of economic development

Criticism of such measurements

  • Criteria are more western-oriented.
  • Data used in such measurement is not always reliable.
  • There is ignorance of nomothetic values like culture and moral values.

Spatial pattern of economic development in the world

  • It refers to the qualitative and quantitative changes in the economy.
  • It involves multiple areas including the development of Human Capital, Environment Sustainability, social inclusion, health, safety, literacy, and other initiatives.
  • Economic development includes the economic growth as well as social emancipation of people based on natural right and right to have full growth of human persona.
  • Economic development has spatial disparity across the world which are governed by geographical factors e.g. physiography, climate resource endowment, population, socio-cultural and religious traits, political organization, institutional factors, mobilization of people, advances in science and technology.
  • In general, the world has been classified into four economic regions
    • Capitalistic-Commercial economy- Belgium, Netherlands, Switzerland, Singapore, etc.
    • Industrial- Commercial economy- USA, Japan, UK, Germany, etc.
    • Industrial- Agrarian economy- South American countries, Australia, New Zealand, South East Asian countries, France
    • Agrarian Rural- African countries, Cambodia, Laos
    • Socialist countries
  • The above division can also be done on the basis of developed, developing, and least-developed countries.
  • Based on economic development world has been divided into North and South.
    • North: These are commercial economies, capitalistic, technology-based, industrialized, urbanized. They capture almost 90% of world trade (India’s share is less than 1 %)
    • South: These countries are the producer of raw materials, impoverished, and have high population density, poor GDP, per capita income, and low standard of living.
Global North and South
  • At meso level, the world economies can be divided into:
    • Developed economies
    • Quasi developed economies such as South America, Russia, China, Brazil, Asian Tigers (Singapore, Malaysia, Thailand, Indonesia)
    • Developing
    • Underdeveloped
    • Socialist
  • The UN criteria is as follows
UN criteria is as follows

At regional scale the world economies can be divided into

  • Anglo-America (USA + Canada)
    • These areas are resource rich such as iron ore coal and petroleum in USA, tin, fishing in Canada, etc.
    • These countries are characterised by high level of development, high standard of living, good economic conditions, high technology, etc.
    • They have high demographic and social indexes such as life expectancy, sex ratio, etc.
    • Since human development in these countries is high, it leads to high technological and economic development, which are compatible with each other (though there are some areas in USA where human development is high but not economic development and vice versa due to racism)
    • There are the events of environment and social hazards such as class differentiation, discrimination, etc)
  • Latin America:
    • It consists of Mexico, Central America, Caribbean islands.
    • It can be divided into two groups i.e. Quasi developed like Mexico and developing like countries of Central America and Caribbean islands.
  • South America:
    • The countries of South America is both industrialised (not as high as Anglo America) and agrarian.
    • The Per Capita Income of Brazil is $8000, Chile is $20,000
    • South American society is divided into caste system based on racial texture such as
      • Mestizos: European White+ Red Indians
      • Mullatos: European White +Black
      • Zambos: Red Indians + Black
    • Human development and economic development, both are in transitional stage. The discrimination against Mullatos and Zambos is however, in-humanitarian.
    • Concentration of wealth is in few capitalistic hands and Mestizos occupy 90% of the natural resources.
  • Sahara and Sub-Sahara Africa
    • It includes Egypt, Sudan, Tunisia and Libya which are Islamic nations.
    • Most of these countries have petroleum. Economic development is greater but human development is lacking.
    • The Per Capita Income of Tunisia is $12000, Egypt is $6000 and Libya is $6000
  • Meso Africa
    • It includes the countries of middle Africa such as Congo, DRC, Uganda, Rwanda, Chad, Malawi, etc.
    • These countries are marked by abundance of natural resources, but due to low technology their exploitation is low. There is lack of industries.
    • These are mostly the tribal economies marked by civil strife.
    • They are poor in both economic and human development.
  • Eastern Africa:
    • These include Ethiopia, Kenya and Somalia
    • These are one of the most poorest countries of the world
  • Western Africa
    • The countries of Western Africa includes Guinea Africa, Senegal, Sierra Leone, Ghana, Nigeria (developing)
    • They are full of natural resources but are tribal economies.
  • South-Central Africa
    • It includes South Africa, Zambia, Zimbabwe, Namibia
    • They are developing or quasi developed countries (South Africa)
  • Asia
    • South West Asia
      • The economic development is high but human development is low since they are dominated by religious monarchs, lack of medical facilities and traditional societies.
      • They are petro dollar economies. Per Capita Income of Saudi Arabia is $23000, Kuwait is $45000, Iraq is $8000 to 9000, etc.
    • South East Asia:
      • These countries include Asian Tigers (Singapore, Malaysia, Thailand, and Indonesia).
      • They are the multicultural region of the world.
    • South Asia:
      • The countries of South Asia include India, Pakistan, Bangladesh, Sri Lanka, etc.
      • Both human and economic development is poor in these countries.
      • Maximum number of poor is there in India, though India has more rich than USA.
    • Far East
      • It includes Japan, Korea, China, etc
      • They are both developed (Japan) developing nations (China, Korea, Taiwan, etc)
      • Per Capita Income of Japan is $35000, China is $6000.

Problems of economic development

The factors which are responsible for the economic development of a region are given below:

  • Physical factors (Geographical factor)
    • Climate, Temperature, Rainfall: Regions with extreme climate are under developed like African nations whereas regions with conducive climate are developed such as USA.
    • Relief, structure and topography: The mountainous areas are less developed than plains due to the effect of relief, structure and topography.
    • Soil, fertility, land capability and productivity: Regions with fertile soil and high land capability will be more developed than the regions lacking them. E.g. Prairies are more developed than sub Saharan Africa,
    • Drainage and hydrology: Areas with high water availability will be more developed such as Uttarakhand is less developed due to poor hydrology. Nile valley is developed due to high water availability.
    • Accessibility and Location: Port areas are usually developed due to high accessibility. E.g. Singapore, Mumbai, Rotterdam, etc.
    • Natural resources: Area with high natural resources is developed provided they have efficient technological systems to harness them. E.g. USA
  • Demographic factors
    • It includes factors like Mortality Rate, Sex ratio, dependency ratio, wage rate, employment etc.
  • Environmental factors (Geographical factor)
    • It includes factors like flood, drought, climate change, ozone depletion, etc. e.g. Orissa is less developed than Mumbai due to more events of Environmental hazards.
  • Technological factors:
    • It is very important factor in the development of a nation. For example Japan, even after having low natural resources is a developed country due high level of technology. Brazil, though highly endowed with natural resources lacks technology is a developing nation.
  • Dynamic factors: it includes factors such as industrialisation, urbanisation, government policies, import-export, role of international institutions.
  • Economic factors: It includes factors such as distribution of resources, availability of financial institutions, availability of credit facilities, etc.
  • Cultural and religious factors: It includes factors like superstitions, centripetal outlook of societies etc.
  • Social factors – it Includes:
    • Various social taboos (cow is holy animal), customs, traditions (e.g. women will not work in fields)
    • Castism, regionalism
    • Literacy and education
    • Food crisis
    • Poverty and gender bias
    • Attitude of people and their work ethos (e.g. enterprising nature of Gujaratis, Jains and Marwaris results in development of their area)
  • Historical factors:
    • Early centre of development has become underdeveloped now due to saturation of development in those regions.
    • Some regions are developed due to their historical inertia of development. E.g. Chennai was developed by British.
  • Vidal de La Blache says that river basins have functional homogeneity and are gravity centres of civilizations where nature is protective and supportive to man.
    • Plains invite civilizations, mountains push them away, and desert denies them coast augment.
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Sam

Thanks sir, it helps me a lot

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