FINAL TERM COVERAGE

IN ECONOMICS
DEVELOPMENT

Prepared by
Moamar Ismula
Gerome Centeno
Keen John Mata
 
INDUSTRIALIZATION
AND THE THIRD
WORLD
COUNTRIES
 INDUSTRIALIZATION
It is the period
 of social
and economic change that
transforms a human
group from an agrarian
society into an industrial
one.
INDUSTRIALIZATION
It is a partof a wider
modernisation process,
where social change and
economic development
are closely related with
technological innovation.
THIRD WORLD COUNTRIES
Third World is a term
originally used to
distinguish those
nations that neither
aligned with the West
nor with the East during
the Cold War.
 THIRD WORLD COUNTRIES
These countries are also

known as the Global
South, developing
countries, and least
developed countries in
academic circles.
THIRD WORLD COUNTRIES

Development

workers also call
them the two-thirds
world and The
South.
 Starting

the
Process of Modern
Growth
Industrialization
 Prior to their
industrialization,they
experienced changes
 such as;
Economic, Social and
Political institutions
were restricted to pave
the way towards
industrialization.
Prior to their industrialization,
they experienced changes such
as;

There was a rapid
technological
improvement.
 Prior to their industrialization,
they experienced changes such
as;

Factors of production like
capital, labor and
entrepreneurial scheme
were made to be more
responsive to
industrialization.
 Prior to their industrialization,
they experienced changes such
as;

Substantial improvement
in transportation,
communication and
electrification were
undertaken.
 Prior to their industrialization,
they experienced changes such
as;

Social facilities and
services were
increased.
 Prior to their industrialization,
they experienced changes such
as;

Agricultural and
commercial
industries became
viable.
 
THE ENGLISH
EXPERIENCE
 
Feudalism and the
Manorial system
 Feudalism describes

the relationship
between the king and
his nobles in
mediaeval Europe.
 Manorialism
describes
 the
relationship between
a noble and his
peasants in mediaeval
Europe.
 

Mercantilism
 Mercantilism is an
economic practice by
which governments
used their economies to
augment state power at
the expense of other
countries.
 
Renaissance and
Reformation
Renaissance - rebirth or

revival --- historical
period of approximately
300 years marked by a
revival in art, literature,
and learning.
 The Reformation was a
movement within Western

Christianity in the 16th-
century Europe that posed
a religious and political
challenge to the Roman
Catholic Church and papal
authority in particular.
 
Industrial
Revolution
 The Industrial Revolution,
now also known as the First

Industrial Revolution, was
the transition to new
manufacturing processes in
Europe and the United
States, in the period from
about 1760 to sometime
between 1820 and 1840.
 Approaches of Industrialization

Developing the
Foundation of
Industrialization
 
AGRICULTURE
Agriculture is the art
and science of
cultivating the soil,
growing crops and
raising livestock.
 AGRICULTURE

Raw Materials
Food
Labor and Market
 
Reasons for
Industrialization
 
To increases the
National Income
of the country.
 National income is
value a
the total
country’s final output
of all new goods and
services produced in
one year.
National Income = C
(household

consumption) + G
(government
expenditure) + I
(investment expense)
+ NX (net exports).

 To improve
 the
stability of export
earnings and
national income.
 Economic stability
enables other
 macro-
economic objectives to
be achieved, such as
stable prices and
stable and sustainable
growth.
To provide more

employment to
the unemployed
and
underemployed.
 
To expand
Markets of Local
Raw materials.
 Raw material prices are
increasingly controlled by
 groups of
ever smaller
global companies which
price raw materials not on
costs but on their market
objectives while restricting
the flow of materials
between markets.
 
Big Mistakes of
Industrialization
 Many of the

unsound projects
were put out
without proper
evaluation.
Many pet government

projects have been
inspired by a political
leader who has no
training in industrial
economics.
Some useless

projects were
organized for
political
expediency.
 
Criteria for
Sound Industrial
projects
 
Economically
Sound and
Feasible
 
Stresses labor-
intensive
Industries
 
It benefits seep
down to the level
of the masses
 
Easily makes
profit
 
There is a ready
Market
Fits to 
the total
economic
development
program
 
Problems of
Industrialization
 They need

massive capital to
push vigorously
their bid for
industrialization
 Leaders of the 3rd

world countries think
that foreign loans are
too small to fund their
development
programs
High interest
 rates
of international
financial
institutions
 The very keen

competition in the
world market for
industrial
products
 South Asian
Clamor
 for
Industrialization
Industrialization
and the Third
World Countries
 The industrial
Revolution
 paved
the way for the
industrialization
of Western
Countries.
 The rapid

industrialization
of the Soviet
Union through
central planning
The decline in the
demandfor raw
materials and
other agricultural
products in the
world markets
 The fast
population

growth and an
increasing rate of
human
unemployment
 
Barriers to
Industrialization
 Unskilled
 labor
force and a small
inexperienced
managerial force
 Rapid

Industrialization
will not generate
sufficient
unemployment
 
Inadequate
logistic support
 Existing social,
economic,

cultural, political
Institutions are
not favorable to
development
 Attitudes
 and
Values are not
suitable to
Industrialization
 
Early Philippine
Industrialization
Direct participation of
the state
 in
manufacturing
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 investment in
manufacturing
 
Government
Participation
In the early 1950's, the

government owned
and managed
railroads, hotels,
electric power, gas
and water works
 It directly

produced coal,
textile, cement,
steel, pulp and
paper
 
It also operated
shipyard and
engineering shops
Moreover, the government
 investments
had substantial
in firms manufacturing
incandescent bulbs,
fluorescent tubes, domestic
and foreign airlines, and
owned three ocean vessels
 However, with the
election ofPresident
Ramon Magsaysay in
1953, there was a
radical change in
industrial policy the
following year
Not a few government
corporations
 had been
inefficient and became
bankrupt. Corruption,
nepotism,
mismanagement were
rampant.
 
Industrialization
Evaluated
 Philippine
Industrialization rose

rapidly since 1950 in
terms of growth,
number of firms,
number of plants or
extent of Filipino
participation.
 In the1950's
economic
nationalism has
become stronger
 
The Social Cost
of
Industrialization
 
The poor are
exploited
 Revolutions may have
largely involved those

living below the poverty
line and human
progress may indeed
have involved some key
revolutions broadly in
this Marxist manner.
 
The Case of
Affluent Societies
 A society in which
scarcity of resources is

not the predominant
condition, and a general
level of economic well-
being has been achieved
by most members of
society.
 

QUESTIONS?
 
THANK YOU
VERY MUCH
FOR LISTENING