ECON FINALS - The developing countries have given much attention to
MODULE IV the creation of a
1. Countryside Development
- a popular approach to the problem of inadequate
employment and income for the rural population. The
process of transforming the rural areas into productive
centers
In line with this approach the following actions are taken:
________________________
advantage of retaining the population in the rural areas
1.1 Agrarian Reform
- Land Reform which is the abolition of tenancy and the
conversion of
sharecroppers to leaseholders a
-more strongly directed to equitable distribution of
wealth than to generating economic growth.
1.2 Cottage Industries
- It generate income and employment in the rural areas.
It is small enterprises
based on indigenous raw materials,
handicraft, woodcraft, embroidery, metal craft,
-to earn cash
while waiting for the harvest and planting seasons and
to give them a
subsidiary source of income
1.3 Import Substitution
- The productive capacity of a country that has suffered
trade deficits is
usually oriented to the development of a capacity to
duplicate imported goods.
This is called import substitution, which may be
designed to conserve the foreign
exchange
-hindrance to the free flow of goods between
countries
2. Cooperative Approach
- The formation of member-managed groups
- to pool resources and to generate growth and
development
through the acceleration of investment and economic
activities.
3. Pump-priming Approach
- The injection of massive government funds into the
economy purposely to spur
economic activity, to increase employment and income,
to build infrastructure and to
induce private sector investment.
3.1 Foreign Investment Attraction
favorable climate for the entry of foreign investments.
the process, the foreign investors will provide the
benefits of development
in terms of employment, income, and a better quality of
life for the people.
4. Appropriate Technology Approach
-use of machines and equipment of low
capacity, low cost and suited to small-scale production.
use of small thresher’s aid water pumps and the
construction of biogas
tanks for electricity and fuel are appropriate technology
applications that have
improved the farm enterprise
5. Non-Formal Education
induces people to use their skill for self-employment. It
has been the way to
improve income for many urban and rural poor and has
therefore done much to
mitigate poverty.
6. Non-Government Organizations
ave been a way for aid to reach the urban
and rural poor directly through people-oriented
livelihood projects.
-expected to provide facilitative services such as seed
dispersal,
operation of irrigation systems, demonstration of
technology,
7. Preferential Credit
may give preferential
status to certain projects that contribute to
development.
8. Tax Relief Approach
- Selective tax relief to some industries is an approach
that may enable
government to influence the quantum of investment
towards the desirable area.
-to let private business grow at a faster rate than they
would if taxes were to be paid in full.
- The response to tax relief however is mixed.
*Tax exempt status given to an investment area gives the
impression that this is
for attracting investment due to its low profitability.
* Tax exemption is a real advantage that should be taken as an
opportunity.
* To the government, tax relief is in anticipation of the collection of
more taxes from a fully-grown industry in the future.
9. Vocational-Technical Education
requires adequate manpower to do the
technical work, which do not call for professional
qualifications.
-- There should be enough graduates who will do the
work instead of an excess of
graduates to perform managerial and professional work.
10. Alternative Energy Sources
- Energy is a basic requirement of growth and
development. Industrialization is
stunted when the supply of energy is inadequate and
irregular. The traditional and
most widely used fuel for generating electric power has
been coal and crude oil.
- Countries with limited coal and crude resources that
are also low in purchasing
power have turned to alternative sources of energy.
- Some of the common are: hydroelectric power,
dendro-plant, and geothermal
power generation.
Labor and Consumer Protection
- One approach to development is to preserve and
enhance the gains and
benefits of laborers and consumers.
- A high wage rate causes the cost production to rise,
Deregulation
- There is advocacy that developing countries that have
installed so many
regulations on business and industry should dismantle
them to allow the market
forces to operate freely.
- Some of the objects of clamor for deregulation is
wages, energy rates, airfares,
shipping fares, fuel prices, rent and land transport fares.
Fertility Curtailment Incentives
- Rapid population growth is a deterrent to the growth
of a developing country
because the households are not able to save as the
number of dependent
increase.
‘’However, the greatest obstacle to economic
development is man himself.’’
MODULE V
Industrialization and the Third World Countries
the most important requirement for industrialization is
the restructuring the values and institutions in society.
This chapter presents: approaches to industrialization,
reasons for industrialization, big mistakes in
industrialization, problems with industrialization, and
barriers to industrialization, and early Philippine
industrialization
Approaches to industrialization
However, not a few developing countries have made
mistakes in their strategies’ or approaches to
industrialization. it is not true that almost any kind of
industrialization will help them attain their objectives. It
is likewise wrong to assume that the benefits of
industrialization will automatically flow from investments
to industrial projects.
Developing the foundation of industrialization
favorable agricultural development, it would be much
easier to promote industrialization
Industrial countries like the United States, Japan and
those in Europe started their economic development
with a strong agricultural base
Reason for Industrialization
1. To increase the national income of the country
2. To improve the stability of export earnings and
national income.
3. To provide more employment to the unemployed and
underemployed.
4. To expand markets of local raw materials.
Big Mistakes in Industrialization
Industrial Development by Murray, Bryce.
Many of these unsound projects were put up without
proper evaluation. Such mistake was a great waste of
scarce resources.
For example, long and beautiful super high ways, and
imposing buildings whose cost is several items as much
as the expensive machines they housed.
-It states that in putting up a community project, always
begin with a simple project which is a felt need of the
community.
Problems of Industrialization
Max Weber, in his Protestant Ethics claimed that the
thrift and industry of the Protestants were the causes of
progress in Europe
-foreign loans and bids are only for agricultural or rural
development – not for industrial development.
-They impose quotas, tariffs, and similar trade barriers
against products coming from the less developed
regions. They cannot immediately retaliate because
their economies are heavily dependent on the rich
countries.
Encourage foreign investments
Foreign investment should be a stepping stone for
industrial development. It should not be a substitute for
local private initiative entrepreneurship
-to imitate Western technology as a development
strategy may not be correct.
Barriers to Industrialization
-It is noted that not a few conditions in many South
Asian countries have not been favorable to
industrialization. For instance, there has been inefficient
public administration.
Myrdal gave his observations on the region’s dream of
industrialization;
 There is an unskilled labor force and a
small-inexperienced managerial
resource.
 Rapid industrialization will not generate
sufficient employment. It may even be
negative if modern industry will
compete with traditional labor-
intensive manufacturing.
 There is inadequate logistic support
such as power, transport and
communication facilities. Also, not all
raw materials for industrialization are
locally available.
 Existing social economic, cultural, and
political institutions are not favorable to
development.
 Attitudes and values are likewise not
suitable to industrialization.
Early Philippine Industrialization
The goal of the early Philippine economy has been to
increase to share of manufacturing in the GNP.
Since 1916, there were experimentation with policies
which were envisioned to promote manufacturing in the
Philippines
Professor Frank Golay of Cornell University stated that
Philippine industrialization policy included (Golay, 1961)
- Direct Participation of the State in
manufacturing and industrial activities as an
entrepreneur or partner of private firms.
- Development of financial institutions for
allocating scarce credit and foreign
exchange resources.
- Provision of government incentives to private
entrepreneurs.
- Promotion of selected foreign investments in
manufacturing.
Government Participation
President Ramon Magsaysay in 1953
selling government companies in which the private
sector was interested
“padrino system”
Philippine industrialization rose rapidly since 1950 in
terms of growth
only 8.5 percent of the national income compared with
42.3 percent in agriculture
-inefficiency, favoritism, and corruption crept into the
operations of infant industries. Many of these industries
remained in their infant stage at the expense of the
taxpayers and consumers.
Recto pointed out:
nothing more than assembling, bottling or packaging
plants or concerns which import an almost finished
product and perform the last stage of manufacturing
before selling it on the selling counter . When we refer
to these enterprises as “industries” we are deceiving
ourselves (Constatino, 1965)
MODULE VI
PEOPLE DEVELOPMENT POLICIES
Why are these countries successful despite their natural
shortage comings? The only
answer is the people.
The human resource is still the most important factor in
economic
development, and money, machines, and materials are Manpower Problems in the Developing Countries
useless. -employ thousand
- long process of education and training. seasonal farm workers, necessary skill, the small
Investment in People manufacturing sector of their
**human capital economy cannot possibly absorb all the unemployed
there is a less corruption, people since the region is
favoritism, tardiness, and other negative work attitudes. agricultural economy.
In Japan, Major Human Resource Problems
Miseducation and Wrong Values W.A. Harbinson mentioned the major human resource
THEY PREFER WHITE COLLAR JOBS problem in the
Young people always cast a social stigma on such developing counties, such as:
1. Rapid growth of population;
“low-class” courses.
2. Increasing unemployment in the modern sectors of
The Right Kind of Education the economy and
Moreover, the kind of widespread underemployment in the traditional
education that vigorously stresses the development of agriculture;
human, social and cultural 3. Shortage of persons with critical skills and knowledge
values was essential elements which make a nation which are necessary
great. for effective national development;
Strategies for Developing People 4. Insufficient and underdeveloped organizations and
Developing economies have two basic problems: one is institution for mobilizing
shortage of technical human effort;
and skilled manpower, and the other is the surplus labor 5. Lack of incentives for individuals to engage in
in all sectors of the economy productive activities which
especially in agriculture. are vitally important national development; and
W.A. Harbinson, a known resource development expert, 6. People are suffering generally from
stated the objective undernourishment.
of manpower analysis: Approaches to education
1) To identify the main critical shortages of skilled should be made available to the poor masses.
manpower in every sector . Education has been a passport to fame and wealth.
of the economy, and analyze the reasons for such Most of the school drop outs live in the rural areas or
shortages; agricultural communities.
2) To identify the surpluses, for the both skilled and n Hindu tradition, education was principally the
unskilled labor, and to privileged of the
analyze the reason for such surpluses; and
highest social class – the Brahmans.
3) To set forward targets for woman resource
development based on realistic Buddhists, they took in boys in their monasteries
expectations of growth. Islan acdg to Koran, it is a
-the purpose of manpower analysis is to provide an religious duty to educate the young.
objective picture of the Thomas Balogh in his article "Education must Come
major human resource problem of the economy. Down to Earth,"
Once the manpower problem have proposed the following:
been identified and analyzed, an appropriate strategy It must transform primitive agriculture.
must develop to solve such It must be integrated into the community life to avoid
problems. Such strategy should contain the following the emergence of
essential components: artificial and power-hungry elite who imitate the
1) Building appropriate incentives lifestyles of their former colonial
2) Effective training of employed force masters.
3) Rational development of formal education.
It must provide technical and administrative inputs of
developing the country.
Rural education should be given first priority because of
the important of agriculture
for the welfare of the masses.
Elementary Education
Philippines,
G6 60/100
Hs 70% finished
Dropped out:
Latin Ameeica 60/100
Other 70%
A system of Spanish
education was planted from the elementary down to
college level. Some of the oldest
religious schools exist like Letran College, Sta. Isabel
College, and University of
Santo Thomas.
Colonial Education
s Mohandas Gandhi was one of them. He studied law in
England. But he used his education for the good of his
people and country.
Shortcomings of Colonial Education
As a result many students are good in memory work
but poor in reasoning ability.
High School Curricula Evaluated
The Indian Secretary Education Committee evaluated
the
secondary schooling in the region:
Existing curriculum is narrowly conceived.
It is bookish and theoretical.
It is overcrowded without providing rich and significant
contents.
P a g e | 10It makes insufficient provision for practical
and other kinds of activities
developing the whole personality.
It does not cater to the various needs and capacities of
the students.
It is dominated too much by examinations.
It does not include technical and vocational subjects
which are necessary for
training students to take part in the industrial and
economic development of the
country.
Factors that Bar Educational Reforms
literacy characters of high school education have been
influenced by several factors:
- High school students are being prepared for college
and university and not
for vocational or technical jobs.
- Teachers who can handle technical or vocational
subjects are scarce. They
would rather work in the government or private
industries where salaries are high.
- Laboratories and special teaching aids in teaching
science, and technical or
vocational subjects are very expensive.
- The weight of traditions which despise manual work
has been heavy. The
educated ones who own and manage the schools feel a
lower social status if their
institutions are merely technical or vocational schools.
College Education Criticized
continue to produce an oversupply of generalists.
Poor uiv teachers, degrees are attractive to students and
parents
Education in the Philippines
-planted by the Spanish colonial
-American rule which lasted for 50 years, mass
education was encouraged.
US Brand Of Education
become productive. Dr.
Salvador Lopez, former UP President, said that, Teaching
English is wasteful
Poor Teaching Quality
Ramos stressed
we can only expect mediocre engineers,
agriculturists and technicians.
How Standard of Education
*46% finished in g6 cant read and write any language
*30% public elem school are below substndars
*1980, 1/3 of all elem school had no classrom for g5
&g6
-The PNC research
center revealed that those who take up bachelor degree
in elementary education
have the lowest IQ and mental ability followed by BSE
students.
-This is product of many factors.
Salaries of teachers are very low.
-On the other part of the students their poor
performance is related to their
poverty.
-College studs aint serious
--To improve our educational system, there is a need
first to reform the
aforementioned institution and values.
World Bank Interference Opposed
funded by the the right values. Thus, the key to development is proper
World Bank is to fit the manpower requirements of the education.
economy.
-Nationalist educators have accused the World Bank of
manipulating our
educational system for the benefits of multinational
corporations.
-real economy
development is one whose fruits go to the citizens of the

country—specially to the

orientation only make the foreign businessmen richer at

the expense of our economy
and people, then this is exploitation, pure and simple.
Education is People Development
people who are
capable of transforming available scarce resources into
economic abundance for the
benefits of all members of society.
not only workers and technicians for the projects and
factories of the
foreigners.
Health and Education
Students who has undernourishment or malnutrition
Adults with poor health are not efficient in their works.
The Poor Patronize Quack Doctors
People relied on their traditional medicine combined
with native herbs and spiritual cure.
Human Values in the Dark
For instance, crimes,
immorality, racial discriminations, labor exploitations
and the like are increasing in
great proportions. All these problems are reflections of
our human values-decaying
human values.
Thorstein Veblen mentioned the survival of barbaric
values
Rich People Destroy Themselves
richest countries in the world have the highest rates of
suicides.; denmark,sweden, and us
The list
includes too much money, too much alcohol, too many
possessions, too many drugs,
and not enough love and concern by parents.
Education, Values, and Development
The right values are
learned through education. Better and faster
development can be attained through