Rostow s Five Stages of Development

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2 A few facts According to UNICEF, 22,000 children die every day from povertyrelated causes (starvation, lack of access to potable water, curable diseases) Approximately 27-28% of all children in developing countries are estimated to be underweight and malnourished (more than 1 in 4) Around 72 million children of primary school age in the developing world are not in school Approximately 1.1 billion people in developing countries lack access to clean water and 2.6 billion lack basic sanitation 2 out of 3 people in developing countries live on less than $2/day and 1 out of every 3 lives on less than $1/day An estimated 40 million people are living with HIV/Aids As of 2005, there were million cases of malaria, with 1 million fatalities (Africa accounts for 90% of the deaths) Some 1.8 million children die from diarrhea/dehydration each year

3 Rostow s Five Stages of Development

4 Criticisms Western-centric Assumes linear development, where the end result is known and will/should mirror development of the West Fails to acknowledge that countries may get locked in to exporting raw goods Economic growth=economic development (distribution does not matter) Assumes low savings and investment rates, domestically, are to blame for lack of development (which could be remedied with foreign aid or investment)

5 Jeffrey Sach s Poverty Trap Countries lack the financial resources to make the necessary investments in the following areas to lift themselves out of poverty: Infrastructure improvement Education Health Care Environmental degradation Which lead to Rampant tropical diseases Lack of human capital Flight of capital that does exist (financial and human - brain drain ) Decreasing inability to produce food and procure potable water

6 Sachs: prescription Clinical economics Technology, such as bed nets to control mosquitoes, indoor pesticides, and better medications Improvements to transportation infrastructure (roads, airports, fiberoptic cables) How to accomplish this? Increase foreign aid (double the current contributions of rich countries) Targeted towards specific development goals, in countries with decent degree of governance and transparency Millennium Project created with this in mind

7 United Nations Millennium Goals (target date of 2015) Cut in half (from 1990) the proportion of people living on $1 or less/day and the number suffering from hunger Reduce by half the number of people lacking access to potable water and basic sanitation Achieve full employment and decent work for everyone Achieve universal primary education and eliminate gender disparity Reduce by 2/3 the under five mortality rate & by 3/4 the maternal mortality rate Achieve universal access to reproductive health Reverse the spread of HIV/AIDS & provide universal access to HIV/AIDS treatment Reverse the incidence of malaria and other major diseases Integrate the principles of sustainable development into country policies and programs to reverse the loss of environmental resources Reduce biodiversity loss Develop open, rule-based, predictable non-discriminatory trading and financial system Deal comprehensively with the debt problems of developing countries In cooperation with pharma companies, provide access to affordable essential drugs

8 How effective? Goal: Cut in half the number of people living on $1 or less/day Results: From, UN Millennium Goals -indicators - from UN Millennium Project website ( Percentage of population living below $1 (PPP)/day Northern Africa Sub-Saharan Africa Latin America Caribbean Eastern Asia Southern Asia Southern Asia, excluding India South Eastern Asia Western Asia Transition countries in SE Europe

9 Prevalence of underweight/malnourished children under the age of 5 (%) (Millennium goal: reduce % hungry in half by 2015)» Northern Africa 11 7 Sub-Saharan Africa Latin America & Caribbean 11 6 Eastern Asia 17 7 Eastern Asia, excluding China 12 6 Southern Asia Southern Asia, excluding India Southeastern Asia Western Asia 14 14

10 Critiques of top-down scientific development No one-size-fits-all solution to development, applicable across all countries Countries are dynamic; Conditions are different from when developed countries industrialized (the real world is messy) Failure of Shock therapy and Washington Consensus policies Destructive nature of structural adjustments imposed by IMF/World Bank Development judged in linear terms (one trajectory, ending with one uniform stage of development) Countries following their own path (China & East Asian Tigers) have largely fared better Development from above has led to backlash in many regions Countries should be free to try different strategies and decide for themselves what works (and what does not)

11 Role of International Institutions in all of this? Bretton Woods System - created in 1944 WTO, International Monetary Fund (IMF), and World Bank; also multilateral and bilateral trade agreements (such as NAFTA) Doha Round of development

12 Impediments to poverty eradication? Agricultural subsidies to producers in rich countries As % of OECD countries GDP Absolute $ value (in billion US$)

13 Corn Subsidies (US)

14 Corn Farmers in Mexico NAFTA required Mexico to remove tariffs on corn US corn from large agribusiness farms sold at 30% of the production cost Small Mexican farmers cannot compete and many have gone out of business More than 2 million farm workers have lost their jobs

15 Escalating Tariffs Tariff barriers (as a %) imposed by rich countries on goods produced by developing countries: Agricultural goods Developing countries LDCs Textiles Developing Countries LDCs Clothing Developing countries LDCs

16 WTO s Trade Related Aspects of Intellectual Property Rights (TRIPS) Sets the rules for countries to obtain less expensive generic pharmaceuticals Issue of food sovereignty/gmo seeds

17 How to best address global poverty? Allow countries to develop on their own terms? Eliminate unfair trade rules? Increase foreign aid? Require corporations to behave more responsibly? Make informed consumer decisions/ Purchase fair trade products? All of the above?