The Developing Countries (Chapter #14)

The Developing World:

 General Classification: The developing countries are refers the Global South, in contrast to the
Global North, the geographical location of the great majority of the developed countries. The label
Third World is still widely used. Africa is identified by their very low levels of wealth, health, and
literacy and by their economic vulnerability. This group of countries is called Fourth World.
 Regional Classification: region is the second element of classification.
o East Asia and the Pacific: Most of these countries are developing countries. However, “Asian
Tigers” have advanced to developed –county status (Singapore, Taiwan, and such NICs
(developing countries) as the “Little Dragons” (Malaysia, and Thailand).
o South Asia and Central Asia: The central Asian group is primarily composed of the “Stans”
countries, and cultures that have been dominated by Islam for hundreds of years.
o North Africa and the Middle East: this region includes (Iraq, Iran, Saudi Arabia, Algeria, Egypt,
Libya, and Morocco). Economically, most of these countries are in the middle-income group,
several of the small oil-rich states are quite wealthy (Kuwait, United Arab Emirates).
o Sub-Saharan Africa: is the poorest and least economically developed region in the world.
o Latin America: There are two subsets of countries in Latin American. One subset is countries
that are relatively advanced in both economic and social development. They are in NICs level;
such as (Argentina, Brazil, Chile, Costa Rica, Mexico, and Uruguay). Second subset is of Latin
American are less developed and less urban countries (Honduras, Nicaragua, Jamaica, and Haiti).

Goal: Prosperity:

 Obstacles to Prosperity:
o High birthrates: On average, each woman is the developing world has more than three
children. Developing countries is likely to grow from 5 billion to about 8 billion. In this way,
there is few or no surplus resource for economic expansion.
o Inefficiency and Corruption: one source of organizational inefficiency is the limited
availability and ineffective use of modern technologies. Another major source of productive
inefficiency is the absence of bureaucracies. The terms baksheesh “something given”, chai
“tea”, and mordida “the bite” describe the private pay off.
o Neocolonialism: a more informal and indirect, but still extensive, control of the resource,
the economic systems, and even the political systems of developing countries by powerful
external actors.
o Dependence on primary commodities (supplies) for export: some countries relay on the
export of few primary commodities (raw material, such as oil or minerals).
 The Quest for Prosperity- Strategic Choices: a developing country must make choices in at least five
key strategic areas in economic development in the global system:
1. The balance between state control and the market
2. The balance between import substitution and export promotion
3. The mix of manufacturing products, service, and commodities
4. The role of agriculture
5. The extents of collaboration with foreign capital
o Statism versus neoliberalism: state is less active on control/ providing economic growth.
o Producing for domestic consumption of export: a developing country should maintain a
balance of import and export.
 o The mix of manufactured goods, services, and commodities:
o The role of agriculture: There should be a state controlled agriculture, and a system where
people produce a surplus of food that can sold in a market.
o Commercial agriculture: a system where produce a raw material and import food to support
a growing urban population.
o Collaboration with foreign capital: Three types of financial capital:
1. Foreign aid: most of countries shared technology, grants, and loans with no
expectation of repayment.
2. Foreign Direct Investment (FDI): that is, they invest in the developing country’s
firms or set up their own firms within the country.
3. Loans: is to borrow funds from the international financial community, composed or
primary of major banks.
Microcredit: tiny loans to enable them to launch such business.
o Current Outcomes: government and economic leaders have generally opened their
countries’ economies to international competition and to global capital. Exp: China made
progress in Swaziland, and Bangladesh.
o The balance Sheet: The balance sheet is used to balance the number of incomes and
outcomes.
o Prognosis (prediction):

Goal: Security:

 Interstate Violence: The war among developing countries almost always happens among two
boundaries. Exp: The Iran-Iraq War, Pakistan-India war, Afghanistan-Soviet Union invasion. The
following list offer five explanations for interstate violence between adjacent developing countries:
1. Geographic boundaries:
2. Cultures: two countries different religious belief
3. Resources: attempt to gain control the resources by force
4. Internal problems: neighboring states bring violence into against states.
5. Actions of other states: in order to gain their own interest, they encourage
conflict in the state.
 Economic Security: developing countries needs their quest for security, because the state controls
its own destiny. They expect quest to control over the country’s internal affairs. International
Monetary Fund (IMF) is sets economic policy and monitors the behavior of global lenders and
debtors.

Goal: Stability:

 The Decline of Political Order:

o Political Decay: since the political economy is usually unable to deliver sufficient goods
(jobs, housing, and health care, food) to meet these expectations, citizen usually increase in
political decay, which causes the problems of instability in developing countries.
o Military: when I country cannot fill military expectation they experience military decay.
o Internal Law: when the political decay so extensive that no group, not even the military, can
maintain order, the country turns to internal war.
 Democratization: To shift away from authoritarian and military regimes toward regimes with an
elected leadership, political freedom, and pluralist polices.
 Political approaches:
o Conservative Authoritarianism: conservative authoritarian regimes attempt to preserve the
traditional socioeconomic order and culture, and have little or no commitment to
democratic participation.
o Modernizing Authoritarianism: modernizing authoritarian regime is dominated by an elite
group that desires to preserve culture and tradition, but the elite accept that some
development is inevitable and perhaps even desirable.
o Revolutionary Socialism: revolutionary socialist regimes have a strong commitment to
economic and social equality and use political power to achieve this goal.
o Constitutional Democracy: is promoting open polices in which citizens are allowed
considerable political rights and civil liberties.
Challenges:
 Globalizing world: globalizing world suggests that dealing with problems is a best
way, but not fight. Don’t stop it, but manage it.
 Grounds for optimism: the low income countries have achieved improvement:
adults’ literacy has declined from 45 percent to 37.7 percent, and the number of
free countries has increased. Perhaps it is getting better.