Title: Economic Geography
1Economic Geography
2Primary activities
- Any activity where a natural resource (raw
material) is used directly for profit. - Farming
- Fishing
- Mining
- Logging
3Secondary activities
- When raw materials are taken to produce or
manufacture a product. - Iron and Coal (extracted primary) produces
Steel - Steel produces thousands of parts for machinery
of all kinds. (automobiles) - Cotton is harvested (primary)
- Taken to a factory and made into clothes.
(textiles)
4Tertiary (Service) activities
- Anything that provides a product or service to
the public. - Largest sector of an MDC country today.
- Banking, education, medicine, retail or wholesale
sales, food service, military, insurance,
entertainment, transportation, tourism
5Quaternary Sector
- Processing and distribution of primarily
technical information. - Engineering
- Research and development
- Information technology
- Software
- Web design
- Support
6Quinary Sector
- Decision makers
- CEOs
- CFOs
- Conglomerates
- Highest levels of State
- These people will directly impact the markets and
therefore the economies from local to global
scale.
7So Whos Rich and Whos Poor?
- https//youtu.be/9-4V3HR696k
8Economic Systems
- There are 3 primary types of Economic Systems.
- Traditional or Subsistence
- Market or Demand System
- Command System
- Like activities, these systems can be found in
many places throughout the world.
9Traditional
- Generally associated with subsistence
agriculture. - Subsistence-producing only enough for you and
your family at a survival level. - Almost exclusively involved in Primary economic
activities. - LDCs of sub-Saharan Africa, parts of South Asia,
parts of Latin America.
10Market or Demand System
- Guided by the principle of free enterprise.
- People are free to decide on what they will
produce, sell, and buy. - Competition is encouraged by supply and demand
principles. - Capitalism A system based on private ownership
of property, businesses, and resources with
little government interference.
11Command System
- A system where the government makes most, if not
all decisions in regards to ownership,
production, and distribution. - Communism version requires all property to be
re-distributed by the government after commanding
what, when, and how much can be produced. - Socialism involves governments controlling,
owning or operating certain businesses within a
country.
12Mixed Economies
- An economic system that includes a mixture of
capitalism and socialism. This type of economic
system includes a combination of private economic
freedom and centralized economic planning and
government regulation. - MOST COUNTRIES ECONOMIES FALL INTO THIS CATEGORY
TODAY. - http//www.youtube.com/watch?v1efDli000Cw
13Measuring Economic Development
- GNP (Gross National Product) is the total value
of goods and services that a country produces in
a year, including all foreign investment. - GDP (Gross Domestic Product) includes only those
good and services produced within the country. - GNI (Gross National Income) is the dollar value
of all goods and services, plus the dollar value
of EXPORTS minus IMPORTS.
14Measuring Economic Development
- Gross National Income (GNI) then is
- GOODS SERVICES (EXPORTS IMPORTS)
- Per Capita Calculations
- GDP per capita
- (GOODS SERVICES) divided by POPULATION
- GNP per capita
- (GOODS SERVICES) (EXPORTS IMPORTS) divided
by POPULATION
15Purchasing Power Parity
- (GNI PPP) is an estimate that takes into account
differences in prices between countries. - If in a poor country, the cost of goods can be
cheap, and can actually raise their true GNI PPP.
In other words, they can get more for their
money. - Example
- Chinas PC-GNI is 6,560 approximately
- Chinas GNI PPP is about 12,880
16Forms of Government
- http//www.youtube.com/watch?vklm6yZxDmJc
17Big Mac Index
18Gini coefficient
- This measures the level of income disparity
between the countrys richest and poorest
population groups on a scale of 0 100. High
number means a wider gap between rich and poor. - Examples
- China 37
- South Africa 65
- U.S. 41
- Venezuela - 45
- Colombia 54
- http//databank.worldbank.org/data/views/reports/m
etadataview.aspx
19Human Development Index
- A quality of life index developed by the UN based
on - Life expectancy at birth (demographic)
- Literacy rate (social)
- Years of education (social)
- Per capita GDP (economic)
- HDI 0 1.0
- Norway 0.944 (1st)
- U.S. 0.914 (5th)
- Russia 0.778 (57th)
- India 0.586 (135th)
- D.R. Congo 0.338 (186th)
20Real World Examples
- Qatar, United States, Japan, Germany
- MDCs
- Free Market System
- Per Capita GDP - PPP
- Qatar - 143,427 1
- U.S. - 54,957 10
- Germany - 45,888 18
- Japan - 37,390 28
- PRE-DOMINANTLY TERTIARY AND SECONDARY ACTIVITIES
21Real World Examples
- Brazil Russia, India, China, South Africa (BRICS)
- Developing Countries (very uneven)
- Now referred to as NICs
- Socialists (mixed economies)
- GDP - PPP
- Brazil - 16,096 74
- Russia - 24,805 49
- China - 12,880 89
- India - 5,855 125
- South Africa - 13,046 87
- MIXED SECONDARY AND AGRICULTURAL PRE-DOMINANTLY,
AND INCREASING TERTIARY
22Real World Examples
- Haiti, Congo, Somalia
- LDCs
- Command-Traditional
- Per Capita GDPs
- Haiti - 1,100
- Afghanistan - 950
- Congo - 350
- SUBSISTENCE IN AFRICAN COUNTRIES
23Measuring Social Development
- Education and Literacy
- Health and Welfare
- MDCs vs. LDCs
- What infrastructure is necessary to insure social
development and a higher quality of life?
24Demographic Factors
- Life Expectancy
- Infant Mortality Rates
- Total Fertility Rates
- Natural Increase Rates
- Crude birth and death rates
25Rostows Development ModelWalt Rostow developed
this approach in the 1950s to examine what is
necessary for full development to take place
within any given country.
26Rostows Modernization Model
- Traditional Society
- Pre-conditions for takeoff
- The takeoff
- Drive to maturity
- Age of mass consumption
27Stage 1
- Traditional Society - Rostow uses this term to
define a country that has not yet started a
process of development. A traditional society
contains a very high percentage of people engaged
in agriculture and a high percentage of national
wealth allocated to what Rostow calls "non
productive" activities, such as the military and
religion.
28Stage 2
- Preconditions for Take-Off - According to
Rostow, the process of development begins when an
elite group initiates innovative economic
activities. Under the influence of these
well-educated leaders, the country starts to
invest in new technology and infrastructure, such
as water supplies and transportation systems.
These projects will ultimately stimulate an
increase in productivity.
29Stage 3
- Take-Off - Rapid growth is generated in a limited
number of economic activities, such as textiles
or food products. These few take-off industries
achieve technical advances and become productive,
while other sectors of the economy remain
dominated by traditional practices.
30Stage 4
- Drive to Maturity - Modern technology, previously
confined to a few take-off industries, diffuses
to a wide variety of industries, which then
experience rapid growth comparable to the
take-off industry. Workers become more skilled
and specialized.
31Stage 5
- Age of Mass Consumption - The economy shifts from
production of heavy industry, such as steel and
energy, to consumer goods, like motor vehicles
and electronic products
32International Trade Approach
- The Persian Gulf states
- Saudi Arabia
- U.A.E.
- Qatar
- Kuwait
- Bahrain
- Focus was on natural capital (oil) as a means to
economic prosperity and development. - This began in earnest in the 1970s.
33Geographic situation
- Dependency Theory
- Political and economic relationships often based
on colonialism limits the economic development of
poorer countries. - World-Systems Theory
- Wallersteins theory
- Core, semi-periphery, periphery relationships
- Would imply that the world cannot be flat
34International Trade Approach
- The original Asian Tigers
- South Korea
- Singapore
- Taiwan
- Hong Kong
- The focus was on human capital building a
manufacturing base. - Japan was the original Asian Miracle
- New to the game Malaysia, Vietnam, and of course
CHINA.
35International Trade Approach
- Chinas Market Socialist model
- Central planned economy
- Gradual approach starting with Special Economic
Zones (SEZs) - Joint partnerships have led to direct foreign
investment. - Government backed, slow privatization
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37Shenzhen, China
38Paths to Development
- Indias Self-Sufficiency Model
- Nehru chose a path that focused on internal
development without outside interference. - It was based on isolation an a system of high
tariffs and quotas. - Discouraged exports and instead focused on
producing for internal consumption.
39Paths to Development
- Indias Self-Sufficiency Model
- Government controlled prices created monopolies
and this led to inefficiency. - A complex bureaucracy led to a reduction in
entrepreneurship. - Since the early 1990s open market reforms have
led to rapid increase in development.
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42World Trade Organization
- WTO works to reduce barriers to international
trade. - Reducing tariffs, quotas and general restrictions
- Enforcing agreements and laws
- China entered the WTO in 2001
- Governments sometimes use subsidies and corporate
interest to dominate markets. - Some are also concerned about the impact of
losing sovereignty and outsourcing.
43Loan Issues
- LDCs must borrow often from the IMF or World
Bank. - Focus on building infrastructure which should
lead to further development is often
unsuccessful. - Profits are often times insufficient to provide
wealth to the nation as it must use its profits
to repay its loans. - Leads to arguments over Fair Trade
44NGOs Non-governmental organizations
- Not ran by a state or economic alliance
- Doing the work that governments cant or wont
do. - The Economist refers to at as a parallel state
- Medecins san frontier
- Red Cross
- Charities, Churches, and volunteer organizations
45- Microcredit
- Popular for of economic empowerment
- Loans to poor people, especially women
- Started in Bangladesh
- Muhammad Yunus (Grameen Bank)
- Ways to help
- www.grameen-info.org
- www.grameenfoundation.org
- www.grameenamerica.org
- www.kiva.org
- www.msf.org
- www.heifer.org
- www.redcross.org