Chapter 3
Understanding development
Development
• Development is a process that creates growth,
progress, positive change or the addition of
physical, economic, environmental, social and
demographic components.
• The purpose of development is a rise in the level
and quality of life of the population, and the
creation or expansion of local regional income
and employment opportunities, without
damaging the resources of the environment.
• Development is visible and useful, not necessarily
immediately.
Approaches to development
• We are thinking in general terms here but it is
worth remembering key geographical concepts of
scale and place.
– “Top down” “trickle down” Approach
– Growth Pole Approach
– “Bottom up” “Grass roots” development
– Fair Trade
– Regional development
– Export led growth
– Foreign Direct Investment
“Top down” “trickle down” Approach
• Proponents of the “trickle down” approach would argue
that richer individuals and larger companies are the
driving force behind economic growth.
• The wealth created by the more successful parts of the
economy and more successful people will naturally trickle
down and benefit everyone.
• Therefore the country should focus on ensuring the right
environment for the rich and the larger companies to
thrive.
• Low taxation and lack of regulation. “Top down” approach
tends to centralize decision making and is often linked to
development through large scale “prestige” projects.
Growth Pole Approach
• Development of a core region or growth pole.
• Leading to spread effects benefiting the country as
a whole.
• Growth Pole – Could be planned or unplanned.
Development of a specific location through
agglomeration. (Special Enterprise Zones in China)
• Propulsive Industry – Industries which can
stimulate growth. Ship building, Automobile, Hi
tech.
“Bottom up” “Grass roots” development
• The aim is to lift people out of poverty by helping them directly.
• Helping them to help themselves. Local involvement in the
decision making process.
• Identifying their needs and deciding on the most effective
solution.
• Use of appropriate technology. Generally long term aims of
sustainability.
• Sanitation and water supply, improved farming through use of
appropriate technology, education, health care improvements and
family planning, development of local industries and businesses
through micro loans and the reduction in bureaucracy, improved
marketing and access to markets, land and property rights, access
to enabling technologies such as the Internet and mobile phones.
• Countless examples of this approach throughout the world.
Fair Trade
• An approach which joins consumers in richer
countries with producers in poorer countries and
creates a fair trading relationship.
• Started in the late 1980s Max Havelaar.
• The basic component is producers are paid a “fair
price” for what they produce.
• But also there is a long term trading agreement
and rules relating to worker conditions and
environmental impact.
Regional development
• Focus on developing the peripheral regions of the
country.
• Attempting to reduce the regional disparities which
develop from an uneven development of the core and
periphery.
• Linked to attempting to reduce rural to urban migration.
• Often investment in improving infrastructure particularly
transport and communications to link the region more
with the core.
• This approach has been very popular in Europe and is a
major part of the EU budget. Particularly in regions which
have suffered from industrial decline or countries such as
Ireland, Portugal and Greece.
Export led growth
• Economic growth through the production and
export of products which the country has a
comparative advantage at producing.
• Approach adopted by many East and South-East
Asian countries particularly successful in Taiwan
where most of the enterprises were Taiwanese not
foreign owned.
Foreign Direct Investment
• Encourage foreign companies to locate in the
country to stimulate economic growth.
• The foreign companies would provide the
investment the economy needs.
• Policy encouraged by the World Bank.
Indicators of development
• There are hundreds of economic, political and
social indicators of development, ranging from
‘Hard’ economic indicators such as Gross National
Income (and all its variations), to various poverty
and economic inequality indicators, to the
Sustainable Development Goals, which focus much
more on social indicators of development such as
education and health, all the way down to much
more subjective development indicators such as
happiness.
Indicators of development
• Nominal Gross National Income
– Nominal Gross National Income is the total
economic value of domestic and foreign output by
residents of a country.
– It roughly works out like this: Gross National
Income = (gross domestic product) + (factor
incomes earned by foreign residents) – (income
earned in the domestic economy by
nonresidents).
• Nepal’s Gross National Product was reported at
31.066 USD in Dec 2019. This records an increase
from the previous number of 29.257 USD for Dec
2018.
Indicators of development
• Gross National Income Per Capita
– Gross National Income Per Capita – is GNI divided
by the population of a country, so it’s GNI per
person.
– (PPP) stands for Purchasing Power Parity – which
alters the raw GNI per capita data to control for
the different costs of living in a country, thus
modifying the GNI figure in U.S. dollars to reflect
what those dollars would actually buy given the
different costs of living in different countries.
• The latest value for GNI per capita, Atlas method
(current US$) in Nepal was 970.00 as of 2018. Over
the past 56 years, the value for this indicator has
fluctuated between 970.00 in 2018 and 50.00 in
1962.
Indicators of development
• The Human Development Index
– The Human Development Index is compiled annually
by the United Nations and gives countries a score
based on GNI per capita, number of years of actual and
expected schooling and life expectancy, or in the words
of the UN itself – the HDI is ‘A composite index
measuring average achievement in three basic
dimensions of human development—
• a long and healthy life,
• knowledge and
• a decent standard of living.’
Indicators of development
• Nepal’s HDI value for 2018 is 0.579— which put the
country in the medium human development
category— positioning it at 147 out of 189 countries
and territories. The rank is shared with Kenya.
Features of Developing Countries
• Developing nations are those with low, lower
middle, or middle incomes relative to other
countries.
• Common characteristics of developing countries are
low levels of living characterized by low income,
inequality, poor health and inadequate education.
Also they are countries with low Human
Development Index.
Features of Developing Countries
• Low per capita real income
• High population growth rate/size
• High rates of unemployment
• Excessive Dependence on Agriculture
• Underutilization of Natural Resources
• Lower level of human development index (HDI)
Development Planning
Development Planning
Development Planning
Assignment
• Study the Roles of National and International
Community and State in development.