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Economic Development and Transition

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Economic Development and Transition Chapter 18 Levels of Development Chapter 18, Section 1 Levels of Development the world lives in poverty Economic well being is ... – PowerPoint PPT presentation

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Title: Economic Development and Transition


1
Economic Development and Transition
  • Chapter 18

2
Levels of Development
  • Chapter 18, Section 1

3
Levels of Development
  • ½ the world lives in poverty
  • Economic well-being is measured in terms of
    development
  • the process by which a nation improves economic,
    political and social well-being of its people

4
Developed Nations and LDCs
  • Developed nations are nations with a higher level
    of material well being
  • LDCs (L4ss Developed Countries) or LDNs (Less
    Developed Nations) are those with low economic
    well being
  • Mexico, Nepal, Central and Southern Africa,
    Republics of the former Soviet Union

5
Measuring Development
  • Factors used in measuring development
  • Life expectancy
  • Infant mortality
  • Health care
  • Literacy
  • Labor force
  • Consumer goods
  • Infrastructure
  • Energy consumption
  • Per Capita GDP

6
Issues of Development
  • Chapter 18, Section 2

7
Issues of Development
  • Population growth
  • Countries are increasing population without
    increasing their economy or development
  • Lack Factors of Production
  • Land, Physical Capital, Human Capital
  • Brain Drainskilled people moved to more
    developed nations
  • Political Factors
  • Corrupt governments, instability, debt

8
Financing Development
  • Chapter 18, Section 3

9
Developing Countries Need to Raise Financing
  • Internal financingsavings and investing from
    within
  • LDCs dont have a lot of people who can do this.
  • Foreign investment
  • Foreign directbuilding in the nationdone by
    MNCs
  • Foreign portfolioinvesting in stocks and bonds
    of foreign countries

10
Foreign Aid
  • Some nations give aid (not loans) to LDCs for
    varied reasons
  • Political
  • Economic
  • Human compassion
  • World Bank
  • Institution that raises money to distribute to
    nations of need
  • Coordinates economic development throughout the
    world

11
International Monetary Fund (IMF)
  • Aids desperate countries through debt
    rescheduling and stabilization programs
  • Conditions are set by the IMF

12
Transitions to Free Enterprise
  • Chapter 18, Section 4

13
Moving Towards a Market Economy
  • Privatizationsale and transfer of government
    owned businesses to individuals
  • Property rights need to be protected

14
Transitions in Nations
  • Russia and Glasnost
  • Policy of political openness and reform that
    encouraged citizens to say what they wished
    without persecution
  • Perestroikaplan for transition from command to
    free economy
  • China and the Great Leap Forward
  • Plan for China to turn into an economic power
  • All land was taken over by the government
  • Huge disaster as there was no incentive
  • China now blends free markets and command ideals
    for their economic plan
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