7
GEOGRAPHIES
OF ECONOMIC
DEVELOPMENT
Learning Outcomes
• Scrutinize the nature and
deg ree of unevenness
in pattern s of economic
d evelopment at national
and internationa l scales.
• Analyze how
g eo graphical divisions
of labor have evolved
with the growth of the
world-system and the
accompanying variat ions
in economic structure.
• Interpret how regional
cores of economic
d evelopment are creat ed
th rough th e operat ion of
several basic principles of
spatial organization.
• Explain how sp ira ls of
econom ic development
can be arrest ed in various
ways, including t he onset
of disinvest ment and
deindustria lization.
• Demonstrate how
globa lization has resu lt ed
in patterns and processes
of local and regiona l
econom ic development
that are op en to externa l
influences.
M igrant workers q ueue to get o n a specially arranged t rain from Be ijing
to Chongqing t o go back home for the Spring Festival.
A trip in China on National Highway 321 east from Chengdu in Sichuan p rovince to Shenzhen in G uangd ong is a j ou rney through economic develop ment. Migrating
workers who travel these highways often leave their families behind. But they also help their
families escape poverty and propel China upward through the ranks of middle-income countries. As they travel eastward, they leave an agrarian realm with few j obs and miserable wages
and enter the realm of”agglomeration economies,” in which a big labor market attracts manufacturers who offer better wages.
Shenzhen attracts young workers-90 percent of its 8 million residents are of working age,
between 16 and 65 years old. Cao Bin, aged 20, from Chengdu in Sichuan left for Shenzhen
in 2008 and hasn’t been back. Chengdu is consid ered one of the most livable cities in China,
bu t Cao Bin thought it was boring. “That town is too lazy,” he says. “I wanted to go somewhere where life is faster.” Peng Chunxia, 21, migrated from Hunan at 17, following her elder
sister. ” Where we are from, most people leave fo r work . . . I was young, and I thought .it’d
be fu n to come here. ” Li Chunying, 34, started working at a toy factory when she was 16.
She now works as a line manager fo r an LED maker and looks forward to her day off, when
she can spend time shopping with friends or eating in restauran ts that serve food from their
native Hunan. “When was I happiest? I don’t know. There were so many times here that I’ve
been happy,” she says. Still, she longs fo r home, and would go back with her husband and
two daughters if she could only be assured of finding a j ob.
With a ready supply of skilled and semiskilled young workers, Shenzhen is investing in better
education and research facilities to ensure that the city supp lies what industries need. The
area specializes in electronic good s and it makes them in enormous quan tities. In 2006, its
exports exceed ed India’s, maki ng the Shenzhen seaport the fou rth busiest in the world. T he
port ships in in termediate inputs and ships out final products. I t boasts expensive facilities,
such as top-notch container ports and convention centers, and matches workers to the growing number ofjobs as firms rapidly expand their operations. Proximity to Hong Kong p ro vides access to finance, though Shenzhen is also home to a rapidly expanding financial sector
of its own. And competition fo r customers among the multiple suppliers of inputs p roduces
cost savings. In many ways, what is happening in Shenzhen is a direct reflection of the local,
regional, and international processes of economic change that we analyze in this chapter.
Based on World Deve/qpment Report 2009, T he World Bank, Washington, D.C., 2009, p. 13;
and A. Ramzy and ] .Jiang, “Person of the Year 2009: T he Chinese Worker,” Time Magazine,
174, December 28, 2009, p. 8 •
215
216
HUMAN GEOGRAPHY
Places and Regions in Global Context
PATTERNS OF ECONOMIC
DEVELOPMENT
W e often discuss eco nomic d evelopment in terms of levels and
rates of change in prosp erity, as reflected in bottom-line statistical
measures of produ ctivity, incomes, purchasing power, and consump tion. Increased p rosp erity is only one asp ect of economic
d evelopment, however. Fo r human geographers and other social
scientists, the te rm econom ic development refe rs to processes of
change involving the nature and composition of the economy of a
particular region as well as to increases in the overall prosp erity of a
regi on. These processes can involve three types of changes:
• changes in the structure of the region’s economy (for example,
a shift from agriculture to manufacturing);
• changes in forms of economic organization within the region
(fo r examp le, a shift from socialism to free-market capitalism);
• c hanges in th e availability and use of technology within the
region (see Box 7. 1, “Visualizing Geography: T echnological
C hange and Economic Development”).
Economic development is also expected to bring with it some
broad er changes in the economic well-being of a region. The most
important of these are changes in the capacity of the region to imp rove the b asic conditions oflife (through b etter h ousing, health
care, and social welfare systems) and to improve the physical framework, or infrastructure, on which the economy rests.
The Unevenness of Economic Development
Geographically, th e single most importan t fea ture of economic
development is th at it is uneven. At the global scale, this unevenness takes the form of core-p eriphery contrasts within the evolving
world-system (see Chapter 2). These global co re-p eriphery contrasts are the result of a competitive economic system that is heavily
influenced by cultural and p olitical factors. T he core regions within
the world-system-North America, Europe, and j apan- have the
most diversified economies, the mos t advanced tech nologies, the
highest levels of prod uctivity, and the highest levels of prosperity.
T h ey are co mmonly referred to as developed regions (though p rocesses of economic development are, of course, continuous, and no
region can ever be regarded as fully developed).
Other co untries and regions-the periphery and semiperiphery of the world-system-are often referred to as developing or less
developed. Indeed , the nations of the p eriphery are often referred
to as LDCs (less developed co untries). An oth er popular term for
the global perip hery, developed as a political label but now synonymous with econo mic developmen t in popular usage, is the Third
World. T his term had its origi ns in the early Cold War era of the
1950s and 1960s, when the newly independent countries of the periphery positioned themselves as a distinctive political bloc, aligned
with neither the First World of develop ed , capitalist countries nor
the Second World of the Soviet Union and its satellite countries.
At the global scale, levels of economic development are usually
measured by economic indicators such as gross domestic product and
gross national income. Gross domestic product (GDP) is an estimate
of the total value of all materials, foodstuffs, goods, and services that are
produced by a country in a particular year. To standardize for countries’ varying sizes, total GDP is nmmally divided by total population,
which gives an indicator, per capita GDP, that is a good yardstick of
relative levels of economic develop ment. Gross national income
(GNI) is a measure of the income that flows to a country from production wherever in the world that production occurs. For example, if a
U.S.-owned company operating in another country sends some of its
income (profits) back to the United States, this adds to the U.S. GNI.
In making international comp arisons, GDP and GNI can be problematic because they are based on each nation’s currency. As a result, it
is now common to compare national currencies based on p urchasing
power parity (PPP). In effect, PPP measures how much of a common
“market basket” of goods and services each cmTency can purchase locally, including goods and services that are not traded internationally.
When we use PPP-based currency values to compare levels of economic prosperity, we usually see lower GNI figures in wealthy countries (because of the generally higher cost of living) and higher GNI
figures in poorer nations (because of the generally lower cost ofliving).
Nevertheless, even with this comp ression between rich and poor,
economic prosp erity is very unevenly distributed across nations.
As Figure 7.1 shows, most of the highest levels of economic development are to b e found in northern latitudes (very roughly, north
of 30° N), which has given rise to an other pop ular shorthand for the
world’s economic geography: the “North” (the core) and the “South”
(the p eriphery). Viewed in more detail, the global pattern of per capita
GNI (measured in the “international dollars” of PPP) in 2009 is a direct reflection of the core-semip eriphery-p eriphery structure of the
world-system. In many of the core countries of North America, northwestern Europe, and jap an, annual p er capita GNI (in PPP) exceeds
$30,000. The only other countries that match these levels are Australia and Singap ore, where annual per capita GNI in 2009 was $38,210
and $49,850, respectively. Semiperipheral countries such as Brazil,
Russia, and Thailand have an annual per capita GNI ranging between
$7 ,000 and $9,000. In the rest of the world- the periphery-annual
per capita GNI (in PPP) is typically less than $5,000.
The gap between the highest per capita GNis ($5 7 ,640 in Luxembourg and $56,050 in No1way) and the lowest ($290 in Liberia,
$300 in the D emocratic Republic of the Congo) is huge. The gap
between the world’s rich and poor is also getting wider. In 1970,
the average GNI p er capita of the ten mos t prosperous countries
in the world was 50 times greater than the average GNI per capita of
the ten p oorest countries. By 2009, the relative gap had increased to
a factor of 67. Overall, more than 80 percent of the world’s population lives in countries where income differentials are widening.
APPLY YOUR KNOWLEDGE W hat kind of statistics
besides gross national income provide an indication
of int ernational disparities in economic development?
Find dat a on one such indicator and p rop ose two possible reasons why the variations exist in the data you
found. (H int: Good sources are the World Bank, http://
d ata.worldbank.org/, and the United Nations Development Programme, http://hdr.undp.org/ en/ statistics/.) •
Resources and Development
C urrent p atterns of economic develop ment are the result of many
different facto rs. One of the most imp ortant is the availability of key
reso urces such as cultivable land, energy, and valuable minerals.
CHAPTER 7
Geographies of Economic Development
217
)
PACIFIC
OCEAN
IND/AN
OCEAN
0
0
– 500′
3-Cf10 Mieo
1.500 3.000 Kilomoters
Gross national income
per capita, 2009
–
$25,000 and above
$10,000-24,999
$2,500-$9,999
Less than $2,500
🙂 No data available
FIGU RE 7 .1 Gross national income (GN I) per cap it a GN I per capita is one of the best sing le measures of economic development. This map , based on 2009 dat a, shows t he tremendous gulf in affluence between the core count ries of the world economy- like the United St ates, Norway, and Switzerland, wit h annua l per capita GN I (in PPP ” international dollars”) of more than
$25,000-and peripheral countri es like Angola, Hait i, and Mali, where annual per cap ita GN I was less t han $2,500. In semiperipheral countries like South Korea, Brazil, and Mexico, per capita GN I ra nged between $5,000 and $10,000 (Source: The Fulle r Projection'” Map
design is a trademark of the Buckminster Fuller Institute. C 1938, 1967 & 1992. All rights reserved. www.bfi.org. Updated with data from World Bank, International Comparison Program da tabase.).
Unevenly distribu ted across the world are bo th key reso urces
and-equally importan t- the combinations of energy and minerals
crucial to economic development. A lack of natural resources can,
of course, be remedied through international trade Qapan ‘s success
is a prime examp le o f this). For most countries, however, the resource base remains an impor tant determinant of d evelopment.
Energy
One particularly important resource in terms of the world’s economic
geography is energy. T he major sources of commercial energy- oil,
natural gas, and coal-are unevenl y distributed across the globe.
Most of the world’s core economies are reasonably well off in terms
of energy production, the maj or exceptions beingj apan and parts of
Europe. Most p e1ipheral countries, on the other hand, are energy
poor. The major exceptions are Algeria, Ecuador, Gabon, Indonesia,
Libya, Nigeria, Venezuela, and the Gulfstates-all major oil producers.
Beca us e of this unevenn ess, energy has co me to be a n
important component of world trade. As more of the world becomes industrialized and developed, d emand for oil continues to
increase. Yet, as we saw in Chapter 4, it is ge nerally agreed that
the p eak of oil discovery was p assed in the 1960s and that the
World started using more oil than was contai ned in new fields in
1981 (Figure 7 .2). Oil p rices h ave risen sharply: more than 300
percent between 2005 and 2010. Oil is now the most important
single com modity in wo rld trade, making up more than 20 percent of the to tal by value in 2010 .
FIGURE 7 .2 Offshore o il d rilling An o il exploration rig working in a shallow estuary off the coast of Sumatra in the Malacca
Straits, Indonesia.
7.1 VlSUALlZlNG GEOGRAPHY
• Technological Change and Economic Development
Edmund
Cartwright
invents the
power loom
Events
Napoleon
Bonaparte’s
fleet defeated
by Nelson
at Trafalgar
First crossing of
Atlantic under
steam
by Dutch ship
Political
Curacao
resettlement of
Europe follows
defeat of French
army by
Wellington
at Waterloo
Darwin p ublishes
the Origin
of Species;
construction of
Suez Canal begins
First successful
undersea telegraph
links Dover, England,
and Calais, France
General
revolutionary
movement
throughout
Europe
Great
Eastern
launched
I
I
I
I
I
I
I
I
I
I
1800
1810
1820
1830
1840
1850
1860
1870
1880
Isaac Singer
devises
the sewing
Singapore
Morse develops a
machine “software,” his code,
founded
by Stanford to make telegraphy the first major
home
appliance
easier
Raffles
Slave trade
abolished in
British Empire
and USA
Napoleonic Wars
in Europe
British hegemony
Water power
Steam engines
Cotton textiles
lronworking
Canals
Turnpike roads
Arkwright’s factory system
Turnpike
roads
Berlin conference
defines rights of
European powers
in Africa; British engineer
American engineer Charles Parsons invents the
multistage steam turbine,
Elisha G. Otis
revolutionizing marine
installs the first
propulsion
passenger elevators
in New York City
_ _ _ _ _ flllllllllllllllllll II~
Railway boom
opens interiors
I
I
I
1900
1910
1920
Guglielmo M arconi,
Italian physicist,
perfects
Albert Einstein
wireless
publishes the
telegraphy Theory of Relati vity
im
+
Islamic
revolution
in Iran
Chernobyl nuclear power
p lant explosion
Global
Financial
World Trade Organization Crisis
established
1960
1950
1940
I
I
I
I
I
1970
1980
1990
2000
2010
Neil Armstrong walks
on the moon
Socialist revolution
in Russia
Mao Tse-Tung
establishes Communist
government in China;
NATO established
European common market
established; Soviet Union
launches Sputnik 1, first
man-made satellite
Team led by Enrico Fermi produces
first controlled self-sustaining fission
reaction, leading to the development
of atomic bomb in 194S
lww
II
American Express
introduces first
plastic charge card
_ _ _ _ _ _ Cold
Working draft of human
genome sequence completed
Break-up of Soviet Union
Iran-Iraq war
Telstar Intercontinental
communications satellite
launched
Wa~
r —–~–.,,,
—-~~~—- American hegemony –~——~~——-~~_.1111111•·
Internal combustion
engine
Oil and plastics
Electrical
engineering
Radio
Telecommunications
Scient ific management
+
Streetcar boom triggers
suburbanization in
indust rial countries
+
World shipping routes,
deep-sea ports developed
1930
ialism
……….._ Telegraph and cable
…,……s ystems link distant places
Canal
networks link
manufacturing
centers
I
Henry Ford introduces
conveyor-belt mass production
techniques in his automobile plants
European
Coal-powered steam
engines
Steel
Railroads
World shipping
Machine tools
+
+
1890
Homestead Act
grants free public
land to frontier settlers
in the United States
II
Geopolitical
eras
Thomas Edison
p erfects
the d up lex
telegraph
1SO million people
suffer famine
or near famine in
sub-Saharan Africa
crisis
British engineer Henry Bessemer
develops his ” converter” process
that leads to the development
of the steel industry
lnfrMtructln
deNloprnenb
M eiji revolution In
Japan begins period of
rapid industrialization
1790
French
Revolution
+
First permanent
transatlantic cable
Decolonization:
Political independence for
former colonies of Cameroon,
Central African Republic, Chad,
Congo, Cyprus, Dahomey,
Ghana, Ivory Coast, Madagascar,
Mauritania, Niger, Nigeria,
Somalia, Togo, and
Up per Volta
OPEC oil
Peary reaches
United Nations created
North Pole;
Model T enters
Wall Street
production
U.S. census
crash
Launch
of
the
declares
Panama Canal,
British battleship
joining
Atlantic
and
HMS Dreadnaught
Bretton Woods
Pacific Oceans, opens
revolutionizes naval
currency
war1are
agreement
Information
technology
Microelectronics
Biotechnology
Advanced materials
Robotics
Solar energy
Just -in-t ime marketing
Television
Computers
Aerospace indust ries
Electronics
Petrochemicals
Nuclear power
Just-in-time production
+
Radio communications
increase spatial
diffusion of ideas
and information
Cars, trucks, and road
building: metropolitan sprawl
and filling out of interior regions
+
Regional air
services
+
+
Global “information
highway”:
telematic s, Internet
+.:
Interstate
highways
Global air network,
major airports
+
Global parcel services
~ntern at i o nal ,
+
Television networks
…,…….
satellite
TV systems
FIGURE 7.A Technolog ica l change and economic development Th e Ind ustrial Revol utio n , w hich beg an
is t hat so far t hey have come along at about SO-year intervals. Since
A f ifth tech nology system, still incomplete, began to take
~te a m engines, cotton t extiles, ironworking, river t ransp ort systems, and canals. It eventually resulted not on ly
the beginning of the Industrial Revolution, we can identify four of
shape in the 1980s with a series of innovations t hat are now being
the complete reo rganization of the geo g rap hy of t he original European core of t he world -syst em b ut also in
an extension of t he world-system core to t he United States and Japan . Since t hen there have been several more
technology syst ems, each opening new geographic frontiers and rewriting the geography of economic d evelopm ent while shifting t he ba lance of ad vantages b etween regions. Overall, the opportunities for development
created by each new technology system have been associated with distinctive econo mic epochs and long-term
fluctuations in the overall rate of change of p rices in the economy.
them:
1790-1840: early mechanization based on wat e r power and
steam engines; development of cotton textiles and ironworking;
com mercially exploited:
1990 onward: exploitation of solar energy, robotics, micro-
in England at t he end of th e eighteenth century, was driven by a technol ogy system based o n water power and
in
Beginning in the late eighteenth century, a series of technological
innovations in power and energy, tra nsportation, and manufacturing processes resu lted in crucia l changes in patterns of economic
development. Each o f these major clust ers of technological innovations created new demands for natural resou rces as we ll as new
labor forces and m arkets. The result was that each maj or cluster of
218
development of river t ransport syst ems, canals, and turnpike roads.
1840-1890: exploitation of coal-powered steam engines; steel
elect ronics, biotechnology, nanotechnology, advanced materials
(f ine chemicals and thermoplastics, for example), and information
technology (digital telecommunications and geographic informa-
and plastics; electrical and heavy eng ineering; aircraft; radio and
t ion systems, for example).
Each of these technology systems has rewritten the geography
of economic development as it has shifted the balance of advan-
systems are clust ers of interrelated energy, transportation, and prod uction technologies that dominat e economic activity for several
decades at a time-until a new cluster of improved technologies
teleco mmunications.
1950-1990: explo itation of nuclear power, aerospace, e lectronics, and pet rochemica ls; d eve lopment of limit ed-access high-
tages between regions (Figure 7 .A). From the m id-1800s, indust rial
development spread to new regions. The growth of those regions
then became int e rdependent with t he fortunes o f other regions
evolves. What is especial ly remarkab le about technology syst ems
ways and global air routes.
t hroug h a complex web of production and t rade.
technological innovations-called technology systems-tended to
favor different regions and different kinds of places. Technology
products; railroads; world shipping; and machine tools.
1890-1950: exploitation of t he internal combustion engine; oil
220
HU MAN GEOG RAP HY
Places and Regions in Global Context
For many peripheral countries the cost of importing energy is a
heavy burden. Consider, for example, the predicament of countries
like India, Ghana, Paraguay, Egypt, and Armenia, where in 20 I 0
the cost of energy imports amounted to more than one-quarter of
the total value of exported merchandise. Few peripheral countries
can afford to consume energy on the scale of the developed economies, so patterns of commercial energy consumption mirror the fundamental core-periphery cleavage of the world economy. In 2008,
energy consumption per capita in North America was 14 times that
ofindia, 18 times that of Mozambique, and nearly 50 times that of
Bangladesh. The world’s high-income countries, with 15 percent
of the world’s population, use half its commercial energy and
10 times as much per capita as low-income countries.
It should be noted that these figures do not reflect the use of
firewood and other traditional fuels for cooking, lighting, heating
and, sometimes, industrial needs. In total, such forms probably account for around 20 percent of total world energy consumption. In
parts of Africa and Asia, they account for up to 80 percent of energy consumption. This points to yet another core-periphery contrast. Whereas massive investments in exploration and exploitation
are enabling more of the developed, energy-consuming countries
to become self-sufficient through various combinations of coal,
oil, natural gas, hydroelectric power, and nuclear power, 1.5 billion people in peripheral countries depend on collecting fuelwood
as their principal so urce of energy. The collection of wood fuel
causes considerable deforestation. The problem is most serious in
densely populated locations, arid and semiarid regions, and cooler
mo untainous areas, where the regeneration of shrubs, woodlands,
and fores ts is particularly slow. Nearly 100 million people in
22 countries ( 16 of them in Africa) cannot meet their minimum
energy needs even by overcutting remaining forests (Figure 7.3).
Cultivable Land
The distribution of cultivable land is another important factor in international economic development. Much more than half of Earth’s
land surface is unsuitable for any productive form of arable fann.
ing, as shown in Figure 7.4. Poor soils, short growing seasons, arid
climates, mountainous terrain, forests, and conservation limit the
extent of agiicultural land across much of the globe. As a result, the
distribution of the world’s cultivable land is highly uneven, being
concentrated in Europe, west-central Russia, eastern North America, the Australian littoral, Latin America, India, eastern China, and
parts of sub-Saharan Africa. Some of these regions may be marginal
for arable farming because of marshy soils or other adverse conditions, while irrigation or other factors sometimes extends the local
frontier of productive agriculture. We also have to bear in mind
that not all cultivable land is of the same quality. This leads to the
concept of the carrying capacity of agricultural land: the maximum
population that can be maintained in a place at rates of resource use
and waste production that are sustainable in the long term without
damaging the overall productivity of that or other places.
Industrial Resources
A high proportion of the world’s key industrial resources-basic
raw mate1ials-are concentrated in Russia, the United States, Canada, South Africa, and Australia. The United States, for example,
in addition to having 42 percent of the world’s known resources
of hydrocarbons (oil, natural gas, and oil shales) and 38 percent
of the lignite (“brown coal,” used mainly in power stations), has
38 percent of the molybdenum (used in metal alloys), 21 percent
of the lead (used for batteries, gasoline, and construction), 19 percent of the copper (used for electrical wiring and components and
for coinage), 18 percent of the bituminous coal (used for fuel in
power stations and in the chemical industry), and 15 percent of
the zinc. Russia has 68 percent of the vanadium (used in metal alloys), 50 percent of the lignite, 38 percent of the bituminous coal,
35 percent of the manganese, 25 percent of the iron, and 19 percent of the hydrocarbons (Figure 7.5).
The concentration of known resources in just a few countries is largely a result of geology, but it is also partly a func tion
CHAPTER 7
PACIFIC
OCEAN
Geographies of Economic Development
221
ATLANTIC
OCEAN
Agricultural land cover
=
0
Primarily forest
)
–
o
1.500
3.000 Miles
I
1,;;J 3.0oo Kiklmeters
Primarily grasslands
Primarily wetlands
“) Sparsely vegetated
ANTARCTICA
FIG URE 7 .4 Agricultural land cover Some countries, like the United States, are fortunate in having a broad
range of cultivable land, which allows for many options in agricultura l development. Many.countries, though,
have a much narrower base of cu ltivable land and must rely on the explo1tat1on of one maior resource as a means
tO economic development. (Adapted from W orld Resources 2000-2001: Peop le and Ecosystems. Washington. DC: World Resources Institute, 2000, p. 57.
Originally from Wood et al., 2000. The map is based on Global Land Cove r Characteristics Database Version 1.2 (Love land e t al. 120001) and USGS/EDC (1999a). The figure
is based on FAOSTAT (1999).
FIGURE 7.5 M ineral exports Ra reearth being
loaded at Lianyungang dock, Jiangsu p rovince,
China.
FIGURE 7. 3 Deforestation Rainforest
logging operation in southeast Cameroon .
of countries’ political and economic development. Political instability in much of postcolonial A&ica, Asia, and Latin America has
seriously hindered their exploration and exploitation of resources.
In contrast, th e relative affiuence and great political stability of
the United States have led to a much more intensive exploration
of resou rces. We should also bear in mind that th e significance of
particular resources is often tied to particular technologies. As technologies change, so do reso urce requirements, and the geography
of economic development is “rewritten.” One important example
of this was the switch in the manufacture of mass-produced textiles
from natural fibers like wool and cotton to synthetic fibers in the
1950s and 1960s. When this happened, many farmers in tl1e U.S.
South had to switch from cotton to other crops.
Regions and countries that are heavily dependent on one ~ar­
ticular resource are vulnerable to the consequences of technological
change. They are also vulnerable to fluctuations in the price set for
222
HU MAN GE 0 GRAPH Y
CHAPTER 7
Places and Regions in Global Context
their product on the world market. These vulnerabilities are particularly important for countries whose economies are dependent on
nonfuel minerals, such as the Democratic Republic of the Congo
(copper), Mauritania (iron ore), Namibia (diamonds), Niger (uranium), Sierra Leone (diamonds), Togo (phosphates), and Zambia
(copper).
Resources and Sustainability
The ideal of sustainable development is one that achieves a balance among economic growth, the environmental impacts of that
growth, and the fairness, or social equity, of the distribution of the
costs and benefits of that growth. The importance of sustainability is cogently illustrated by tl1e concept of an ecological footprint,
which is a measure of the human pressures on the natural environment from the consumption of renewable resources and the
production of pollution. It represents a quantitative assessment of
the biologically productive area required to produce the resources
(food, energy, and materials) and to absorb the wastes of an individual, city, region, or country. The ecological footprint of a cow1try or region changes in proportion to population size, average
consumption per person, and the resource intensity of the technology being used.
Humanity’s foo tprint first grew larger than global biocapacity in the 1980s, and this ove rshoot has been increasing every
year since. In 2006, demand exceeded supply by about 40 percent.
This means that it took almost a year and five months for Earth
to produce the ecological reso urc es we used in that yea r. At
9.0 hectares (23.6 acres) per person, the United States currently has
tlle sixth-largest per capita ecological footprint on the planet, just
behind the United Arab Emirates, Quatar, Bal1rain, Denmark, and
Belgium. Other coWltries with extremely large ecological footprints
include Australia, Canada, the Netherlands, Finland, and Sweden.
Countries with tl1e smallest ecological footprints, between 0.5 and
0. 75 hectares (1.2 to 1.9 acres) per person, include Afghanistan,
Bangladesh, Haiti, and Malawi.
Sustainable development means using renewable natural resources in a manner that does not eliminate or degrade them- by
making greater use, for example, of solar and geothermal energy
and recycled materials. It means managing economic systems so
that all reso urces- physical and human-are used optimally. It
means regulating economic systems so that the benefits of development are distributed more equitably (if only to prevent poverty
from causing environmental degradation). It also means organizing
societies so that improved education, healtl1 care, and social welfare
can contribute to environmental awareness and sensitivity and an
improved quality of life. A final and more radical aspect of sustain~le development involves moving away from wholesale globalizatJon toward increased “localization”: a return to more locally based
econo.mies where production, consumption, and decision making
are oriented to local needs and conditions (Figure 7.6).
Defined this way, sustainable development sounds eminently
sensible yet impossibly utopian. A succession of international summit meetings on the topic has revealed deep conflicts of interest
between core countries and peripheral countries. O ne of the most
s_e rious obstacles to prospects for sustainable development is contmued heavy reliance on fossil fuels as the fundamental so urce of
energy for economic development. T his not only perpetuates international inequalities but also leads to transnational problems such
anizations, while better placed to integrate policy across these
org
.
d
.
1
ctors and better able to address economic an env1ronmenta
~:pillovers” from one country _to another, h~ve (with t~e notable
exception of the European Union) not acquired sufficient power
to promote integrated, harmonized p olicies. Without radical and
widespread changes in value systems and unprecedented changes
in political will, “sustainable development” is likely to remain an
embarrassing contradiction in terms.
APPLY YOUR KNOWLEDGE Use t he Internet to
find three different examples of renewable energy
projects in the United Stat es. List three ways t hey
can change the nation’s ecological footprint. Also
consider a reason that their growth may be impeded.
(Hint: You might want to consider what their fund ing
source is and whether it is adequate.) •
TH E ECONOMIC STRUCTURE
OF COUNTRIES AND REGIONS
FIGURE 7 .6 Promoting local economies Increasing awareness of the benefits of locally produced foods has encouraged
many supermarkets, like this one in Luga no, Switzerland, to feature local products.
as acid rain, global warming, climatic changes, deforestation, health
hazards, and, many would argue, war. T he sustainable alternativerenewable energy gene rated from the sun, tides, waves, winds,
rivers, and geothermal features- has been pursued half-heartedly
because of the commercial interests of the powerful corporations
and governments that control fossil-fuel resources.
A second important challenge to the possihility of sustainable
development is the rate of demographic growth in peripheral countries. Sustainable development is feasible only if population size
and growth are in harmony with the changing productive capacity of the ecosystem. It is estimated that 1.2 billion of the world’s
6.9 billion people are undernourished and unde1weight.
But the greatest single obstacle to sustainable development is
the inadequacy of institutional frameworks. Sustainable development requires economic, financial, and fiscal decisions to be fully
integrated with environmental and ecological decisions. National
and local gove rnm ents everywhere have evolved institutional
structures tllat tend to separate decisions about what is economically rational and what is environmentally desirable. International
The relative share of primary, secondary, tertiary, and quaternary
economic activities determines the economic structure of a country
or region. Primary activities are those concerned directly with
natural resources of any kind; they include agriculture, mining,
fishing, and forestry. Secondary activities are those that process,
transform, fab ricate, or assemble the raw materials derived from
primary activities or that reassemble, refinish, or package manufactured goods. Secondary activities include steelmaking, food
processing, furniture production, textile manufacturing, automobile assembly, and garment manufacturing. Tertiary activities are
those involving the sale and exchange of goods and services; they
include warehousing, retail stores, personal services such as hairdressing, and commercial services such as accounting, advertising,
and entertainment. Q uaternary activities are those dealing with
the handling and processing of knowledge and information. Examples include data processing, information retrieval, education, and
research and development (R&D).
Geographical Divisions of Labor
Variations in economic structure-acco rding to primary, secondary, tertiary, or quaternary activities- reflect geographical
divisions of labor. Geographical d ivisions of labor are national,
regional, and locally based economic specializations that have
evolved with tlle growth of the world-system of trade and politics
and with the locational needs of successive technology systems.
They rep resent one of the most important dimensions of economic development. For instance, countries whose economies are
dominated by primary-sector activities tend to have a relatively
low per capita GDP. T he exceptions are oil-rich countries such
as Saudi Arabia, Qatar, and Venezuela. Where the international
division oflahor (tl1e specialization, by countries, in particular
products for export) has produced national eco nomies with a
large secondary sector, per capita GDP is much higher (as, for
example, in Argentina and South Korea). The highest levels of
per capita GDP, however, are associa ted with economies that
are postindustrial: economies where the tertiary and quaternary
Geographies of Economic Development
223
sectors have grown to dominate the workforce, with smaller but
highly productive secondary sectors.
As Figure 7. 7 shows, the economic structure of much of the
world is dominated by the primary sector. In much of Africa and
Asia, between 50 and 75 percent of the labor force is engaged
in primary-sector activities such as agriculture, mining, fishing,
and forestry. In contrast, the primary sector of the world’s core
regions is typically small, occupying only 5 to 10 percent of the
labor fo rce.
The secondary sector is much larger in the core countries and
in semiperipheral countries, where the world’s specialized manufacturing regions are located. In 2010, core countries accounted for
almost three-quarters of world manufacturing value added (MVA).
MVA is the net output of secondary industries; it is determined by
adding up the value of all outputs and subtracting the value of all intermediate inputs. This share has been slowly decreasing, however.
The core countries had an average annual growth rate for MVA of
around 2 percent during 1990-2010, while the growth rate in the
rest of the world was closer to 7 percent.
This growth has been concentrated in semiperipheral, newly
industrializing countries (NI Cs). Newly industrializing coun tries are countries, formerly peripheral within the world-system,
that have acquired a significant industrial sector, usually th rough
foreign direct investment. O f the 20 biggest manufacturing countries in 2010, 7 were NICs: China, South Korea, Mexico, Brazil,
India, Indonesia, and T hailand (listed here in order of importance) . Indeed, China is now the world’s second-largest exporter
of manufactured goods; India and Brazil ranked ninth and tenth,
respectively, in 20 10. The vast majority of p eripheral countries
have a very small manufacturing output. For example, the share of
world MVA fo r Africa has changed little over the last two decades,
remaining at about 1 percent.
In terms of individual countries, the United States remains
the most important source of manufactured goods, accoun ting
for just over 22 per cent of global MVA in 20 10. Just five countries-the United States, Japan, Germany, China, and the U nited
Kingdom-together produced over 60 percent of the world total
MVA. Another important aspect of secondary activities concerns
productivi ty. In general, the highly capitalized manufacturing
industries of the developed countries have been able to maintain high levels of worker productivity, with the result that the
contribution of manufacturing to their GD P has remained relatively high even as the size of their manufacturing labor forces has
decreased.
Within the framework of this continuing dominance of the advanced industrial economies there are several important trends. Although the United States has retained its leadership as the world’s
major prod ucer of manufactured goods, its dominance has been
significantly reduced. In the 1960s, its share of world manufacturing output was 40 percent, compared to its current share of aroWld
22 percent. Meanwhile, Japan increased its share from less than
6 percent in the 1960s to about 18 percent by 20 I 0. The emergence
of a dozen or so NI Cs as settings for manufacturing is particularly
striking. Several of these are in Latin America (Brazil, Mexico, and
Argentina), but when it comes to the rate of manufacturing growth,
the Asian NI Cs are most impressive.
China has experienced a dramatic increase in manufacturing production, achieving annual average growth rates during the
224
HUMAN GE 0 GRAPH Y
CHAPTER 7
Places and Regions in Global Context
Geographies of Economic Development
225
FIGURE 7. 8 Manufacturing in South Korea
Employees work on an assembly line in a
Samsung semicond uct or plant in Suwon, south
of Seoul.
PACIFIC
OCEAN
IND/AN
OCEAN
0
0A
1.500
1,500
3.ip> –
I
3.000KJlomollWI
Percent economic activity
in agriculture, forestry,
and fishing
e
e
over70%
soto70%
regions in core economies, where new knowledge is constantly generated and rapic!Jy and effectively disseminated.
30to49%
)
10to29%
)
No data availab le
Less than
10%
FIGURE 7. 7 The geogr aphy of primary economic activit ies Primary economic activities are t ho se that Lire
concerned d irectly with natural resources of any kind. They include agriculture, mining , forestry, and fishing . Th e
vast majority of the world’s pop ulation, concent rated in China, India, Southeast Asia, and Africa, is engaged in
primary economic activit ies. This map shows the percentag e of t he labor force in each country th at w as engaged
in primary employment in 2002. In some countries, including China, primary activities account for more than
70 percent of the workforce. In cont rast, primary activit ies always account for less than 10 percent of t he labo r
force in t he world ‘s core count ries, and often for less than 5 percent .
1970s, 1980s, 1990s, and 2000s of about 8 p ercent, 11 p ercent,
14 p ercent, and 9 p ercent, respectively (see Box 7.2, “Window on
the World: China’s Economic D evelop ment” ). Of the fo ur Asian
“Tigers”- South Korea, H ong Kong, T aiwa n, and SingaporeSouth Korea enjoyed th e most sp ectacular increase in manufacturing production (Figure 7.8), achieving annual average growth
rates o f almost 18 p ercent in the 1960s, 17 p ercent in the 1970s,
12 p ercent in the 1980s, and over 7 percent in the 1990 s and
around 6 p ercent in the 2000s. More recently, other Pacific Rim
NICs, such as Malaysia and Thailand, have exp erienced rapid
growth in manufac turing production.
T hese shifts are p art o f a glo balization of economic activity that has emerged as the overarching component of the world’s
economic geography. As we shall see, it has been corporate strategy, particularly the strategies o f large transnational co rporatio ns
(TN Cs), th at has created this globaliza ti on of economic activity.
Transnational corporations are co mpanies that participate not only
in international trade but also in p roduction, manufacturing, and/or
sales operations in several countries.
T he tertiary and quaternary sectors are significant only in the
most affluent countries of the core. In the Un ited States, fo r example, the p rimary sector in 20 10 accounted for less than 2 percen t
of the lab or force, the secondary sector for about 22 p ercent, the
tertiary sector fo r just over 50 p ercent, and th e quaternary sector
fo r 25 percent. In every core country, the tertiary sector has grown
significantly in the past several decades as consu mption and marketing became the hallmarks of p ostindustri al eco nomies. More
recently, globalization has meant that knowledge-based activities
h ave become a critical asp ect of economic development, resulting
in the rapid growth of quaternary industries.
For the world ‘s core economies, knowledge has become more
important than p hysical and human resources in determining levels
of economic well-being . More than half of the GDP of major core
co untries is based on the production and d istribution ofknowl·
edge. In the United States, more workers are engaged in producing
and distributing knowled ge than in making physical goods.
For the wo rld’s perip heral economies, lack o f knowledgealo ng w ith a limited cap acity to a bso rb a nd comm uni cate
knowledge-is an increasingly important ban;er to economic devel·
opment. Poor countries have fewer resources to devote to research,
development, and the acquisition of info rmation technology. T.hey
also have fewer institutions for providing high-quality educauon,
fewe r bodies that can enfo rce standards and perfo1mance, and only
weakly developed organizations fo r gathering and disseminating ~
information needed for business transactions. As a result, econo~
p roductivity tends to fall relative to the performance of places
APPLY YOUR KNOWLEDGE Consider a product that
you own, such as a T-shirt, a pair of shoes, or your
smart p hone or mp3 player, and map out t he prod uct’s development through the primary, secondary,
and tertiary activities. •
International Trade
The geographical d ivision oflabor on a world scale means that the
geograp hy of international trade is very complex. One significant
reflection of th e increased economi c integra tion of the worldsystem is that global trade has grown much more rapidly over the
past few decades than global p roduction. Between 1985 and 2008,
the average annual growth rate of the value of world exports was
twice that o f the growth of wo rld productio n and several times
greater than that of world population growth.
The fundamental structure of international trade is based on
a few trading blocs-groups o f countries witl1 formalized systems
of trading agreements. Most of the world’s trade takes place within
four trading blocs:
• Western Europ e, together with some fo rm er European colonies in Africa, South Asia, the Caribbean, and Australasia;
• North America, together witl1 some Latin Ame1;can states;
• the countries of the fo rmer Soviet world-empire; and
• J apan, togeth er with o the r Eas t Asian s ta tes an d the oilexporting states of Saudi Arabia and Bahrain.
Nevertheless, a significant number o f countries exhibit a high
degree of autarky from the world eco nomy. That is, they d o not
contribute significantly to the flows of imports and exports that
co .
n~t1tu te th e geography of trad e. T yp ically, these are smalle r,
~enp~eral coun tri es, su ch as Bolivia, Burkina Faso, G ha na,
lalawi, Samoa, and Tanzania.
Patterns of world trade have been shifting rapidly, however, in
resp onse to several factors. In general, the trend has been toward an
intensification of the long-standing domination of trade within and
b etween core regions at the exp ense of trade betwee n core countries and peripheral count1~es-witb the major exception of trade in
oil. Innovations in transp ort, communications, and manufacturi ng
technology have diminished the importance of the distance.
Shifts in global p oli tics have also affected the geography o f
trade. One important shift was the breakup of the fo rmer Soviet
Union. O ther significant geopolitical changes include th e trend
toward th e political as well as economic integra ti on of Eu rope
and the increasing participati on of China in the world economy.
But p erhaps the most important shift in global politics in relation
to world trad e has been the shift toward op en markets and free
trade th rough neo liberal p olicies propagated by core countries
(Figure 7 .9). Neoliberal p olicies are economic p olicies predicated o n a minimalist role for the state that assume th e desirability of free ma rkets no t only for eco nomic organization but also
fo r p oli tical and social life.
T he globalization of economic activity has created new flows
of materials, components, info rmation, and finished products. As
a global system of manufacturing bas emerged , significant quantities of manufactured goods are now imported and exported across
much of the world tluough complex conunodity chains (as we saw
in the case of bluejeans in Box 2.2. ” Visualizing Geography: Commodity Chains”); no longer do developed economies export manufactures and p eripheral countries import them. African countries
are an important exception, witl1 many of them barely participating
in world trade in manufactures.
T he most striking asp ect of contemporary patterns of trad e is
tl1e p ersistence of the dependence of peripheral countries on trade
with core countries that are geographically or geopolitically close.
For example, the United States is the central focus fo r the exp orts
and tl1 e origin of the bulk of the imports of mos t Central American countries, while France is the foc us fo r co mmodity flows to
and from Fren ch ex-colonies such as Algeria, Cambodia, Benin,
and the Ivory Coast. T hese flows, however, represent only part
WlNDOW ON THE WORLD
China’s Economic Development
Under the leadership of Deng Xiaoping (1978-1997), China
embarked on a thorough reorientation of its economy, dismantling
Communist-style central planning in favor of private entrepreneurship and market mechanisms and integrating itself into the world
economy. Saying that he did not care whether the cat was black
or white as long as it caught mice, Deng Xiaoping established a
program of “Four Modernizations” (industry, agriculture, science,
and defense) and an “open-door policy” that allowed China to be
plugged in to the interdependent circuits of the global economy.
As a result, China has completely reorganized and revitalized its
economy. Agriculture has been decollectivized, with Communist collective farms modified to allow a degree of private profittaking. State-owned industries have been closed or privatized, and
centralized state planning has been dism antled in order to foster
private entrepreneurship.
In the 1980s and early 1990s, when the world economy was
sluggish, China’s manufacturing sector grew by almost 15 percent each year. For example, almost all of the shoes once made in
South Korea or Taiwan are now made in China. More than 60 percent of the toys in the world, accounting for more than $10 billion
in trade, are also made in China. Since 1992, China has extended
its open-door policy, permitted foreign investment aimed at Chinese domestic markets, and normalized trading relationships with
the United States and the European Union. In 2001, China was admitted to the World Trade Organization, allowing China to trade
more freely than ever before with the rest of the world.
China’s increased participation in world trade has created an
entirely new situation within the world economy. Chinese manufacturers, operating with low wages, have imposed a deflationary
trend on world prices for manufacturers. The Chinese economy’s
size makes it a major producer, and its labor costs stay flat year
after year because there is an endless supply of people who will
work for 60 cents an hour. Meanwhile, the rapid expansion of consumer demand in China has begun to drive up commod ity prices
in the world market. Overall, China’s economy is already the third
largest in the world after those of the United States and Japan.
Nowhere have China’s “open-door” policies had more impact
than in South China, where the Chinese government has deliberately built upon the prosperity of Hong Kong, the forme r British
colony that was returned to China in 1997. The coastline of South
China provides many protected bays suitable for harbors and a series of ports, including Ouanzhou, Shantou, Xia men, and, on either
side of the mouth of the Zhu Jiang (Pearl River), Macao and Hong
Kong. These ports made possible South China’s emergence as a
core manufacturing region by providing an interface w ith the world
economy. The established trade and manufacturing of Macao-a
Portuguese colony that was returned to Ch ina in 1999- and Hong
Kong provided another precondition for success.
When Deng Xiaoping established his “open-door” policy, a
third factor kicked in: capita l invest ment from Hong Kong, Taiwan,
and the Ch inese diaspora. By 1993, more than 15,000 manufacturers from Hong Kong alone had set up businesses in neighboring
Guangdong Province, and a similar number established subcontracting relationships, contracting out processing work to Chinese
companies. Today, the cities and special economic zones of South
China’s “Gold Coast” provide a thrivi ng export-processing platform
that has driven double-digit annual economic growth for much of
the past two decades. The population of Shenzhen (Figure 7.8)
FIGURE 7 . B Shenzhe n The city of Shenzhen, just across the border from the Special Administrative Reg ion
of Hong Kong.
FIGU RE 7 .C New affluence A saleswoman waits for customers at an outlet of the French fashion brand Hermes in Shanghai.
China’s economic boom has led to a rapid increase in the size of
the country’s middle class, up nearly 25 percent since 2008, from
65 to 80 million people.
has grown from just 19,000 in 1975 to 8 .5 millio n in 2007, with an
additional 2 million in the surrounding municipalities. Such growth
has generated a substantial middle class with significant spending
power (Figure 7 .C); it has also created significant infl at ion, especially in real estate values (Figure 7 .D).
Much of China’s manufacturing g rowth has been based on a
strategy of import substitution (see page 230) . In spite of China’s
membership in the World Trade O rganizat ion (w hich has strict
rules about intellectua l property), a significant amount of China’s
industry is based on counterfeiting and reverse engineering (making products that are copied and then sold under d ifferent o r altered brand names) and piracy (making look-alike products passed
off as the real thing). Copies of everything from DVDs, movies, designer clothes and footwear, d rugs, motorcycles, and automobiles
to high-speed magnetic levitat ion (maglev) cross-country tra ins
save Chinese industry enormous sums in research and development and licensing fees, whi le saving the country even greater
sums in imports.
Foreign investors, meanwh ile, have been keen to develop a
share of China’s rapidly expanding and increasingly affluent m arket. The automobile market is particularly attractive to Western
manufacturers. Volkswagen was the first to establish a p resence in
China, in 1985. By 2003, Volkswagen had claimed around 40 percent of China’s annual production of almost 4 million cars and light
trucks. General Motors, in partnership w ith Shanghai Automotive
Industry Corporation, has a 10 percent market share. Other foreign
FIGURE 7 . D Real estate boom In the rapidly growing reg ions of coastal China, house price inflation has risen as hig h as
9.5 percent a month. Shown here is a small fishing village near
Sanya Harbor in Hainan province, where new luxury b uildings are
displacing the older homes and their inhabitant s.
manufacturers operating in China include Honda, Toyota, N issan,
and, most recently, BMW and Mercedes.
Overal l, m ost foreign investment in Ch ina co mes fro m e lsew here with in East As ia. Japan, Taiwan, and Sout h Ko rea, having
developed manufacturing industries that undercut th ose of the
United States, now face deindustrial ization th emselves t hrough
the inexorable process of ” creative destruction ” (see page 237).
More than 10,000 Taiwanese firms have established operations in
China, investing an estimated $150 billion. Pusan, t he center of the
South Korean foot wear industry that in 1990 exported $4.3 b illion
worth of shoes, is fu ll of deserted factories. South Korean foot wear
exports are down to less t han $700 million, while China’s footwear
exports have increased from $2. 1 b illion in 1990 to $29 billio n in
2010. Severa I Japanese electronics giants, incl udi ng Tos hib a
Corp. , Sony Corp., Matsushita Electric Industrial Co ., and Canon,
Inc., have expanded operations in China even as th ey have shed
tens of thousands of workers at home. Olympus m anufactures its
digital cameras in Shenzhen and Guangzhou . Pioneer has moved
its manufacture of DVD recorders to Shanghai and Dongguan .
Tosh iba’s factory in Dalian illust rates the logic. Toshiba is o ne
of about 40 Japanese companies that built large-scale p roductio n
facilit ies in a special export-processing zone estab lished by Dalian
in the early 1990s with generous financial support from the Japanese gove rnm ent and majo r Japanese f irms . By shifting p ro duct ion of d ig ital televisions from its plant in Saitama, Jap an, in 2001,
Toshiba cut labor costs per worker by 90 percent.
227
228
HUMAN GEOGRAPHY
CHAPTER 7
PlacesandRegionsinGlobalContext
resources, as is the case in Angola, Chad, the Dominican Republic,
Iran, Iraq, Libya, and Nigeria, for example.
FIGURE 7 . 9 World Economic Forum
China’s Commerce minister Chen Deming
looks o n prio r to an informal meeting of
Ministers from count ries in the Wo rld Trade
O rg anization during a meeti ng in Davos,
Switzerland, in 2011 .
patterns of International Debt
In many peripheral countries, debt service- the annual interest on
international debts- is a significant handicap to economic development. For every $1 that developing countries receive in aid, they
end up having to return $5 in debt service payments to core countries. In many countries, 20 percent or more of all export earnings
are swallowed up by debt service (Figure 7 .11 ).
At the root of the international debt problem is the structured
inequality of the world economy. The role inherited by most peripheral co untries within the international division of labor has
been one of producing primary good s and commodities for which
both the elasticity of demand and price elasticity are l ow. The
elasticity of demand is the degree to which levels of demand for a
product or service change in response to changes in price. Where a
relatively small change in price induces a significant change in d emand, elasticity is high; where levels of demand remain fairly stable
Geographies of Economic Developme nt
in spite of price changes, demand is said to be inelastic. Demand for
the products of peripheral countries in their principal markets (the
more developed countries) has a low elasticity: It tends to increase
by relatively small amounts in response to significant increases in
the incomes of their customers. Similarly, significant reductions in
the p rice of their products tend to result in only a relatively small
increase in demand.
Consider, for example, the cocoa-producing regions of W est
Africa (Figure 7.12). No matter how they improve productivity in
order to keep prices low, and no matter how much more affiuent
their customers in core countries become, there is a limi t to the d emand fo r cocoa products. In contrast, the elasticity of demand and
price elasticity of high-tech manu factured good s and high-order
services (the specialties of core economies within the international
division of labor) are both high. As a result, the terms of trade are
stacked against the producers of primary good s.
The terms of trade are determined by the ratio of the prices at
which exports and imports ar e exchanged. When the price of exports rises relative to the price of imports, the terms of trade reflect
PACIFIC
OCEAN
PACIFIC
~)
OCEAN
PACIFIC
OCEAN
‘·”.i..
IND/AN
OCEAN
0
0
2500
3.!pl Mileo
1.500 3.000KilomooOB
Debt service, as a
percent of exports
of goods and services
Less than 0.20
–
No data available
–
Greater than 30%
20% to30%
~ 10% to 19.9%
‘ ) Less than 10%
FIGURE 7 .10 Index of commodity concentration of exports, 2002.
of the actio n for the core economies, whose trading patterns are
dominated by flows to and from other core countries.
One implication o f this situation is that the smaller, p eripheral partners in these trading relationships are highly d ependent
on developed economies. An aspect of d ependency, in this context, is the degree to which a country’s export base lacks diversity.
Dependency involves a high level of reliance by a country on fo reign enterp rises, investment, or technology. External dependence
for a coun try means that it is highly reliant on levels of demand and
the overall economic climate of other countries. Dependency fo r a
peripheral country can result in a narrow economic base in which
the balancing of national accounts and the generation of foreign exchange depend on the export of one or two agricultural or mineral
resources.
Figure 7.10 shows one reflection of dependency: the index of
commodity concentration of exports. Countries with low scores on
this index have diversified export bases. They include Argentina.
Brazil, China, Ind ia, and North and South Korea, as well as most
of the core countries. At the other extreme are peripheral countries where the manu fac turing sector is p oorly developed and the
balancing o f national acco un ts and the generation of foreign exchange depend on the export of one or two agricultural or mineral
229
“) No d ata
FIGURE 7 .11 The debt crisis in 2008 In some countries, the annua l interest on international debts {their
“debt service”) accounts fo r more than 20 percent of the annual value of th eir exports of good s and services. Many
countries first got into d ebt trou ble in t he mid -1970s, when Western banks, faced with recession at home, offered
low-interest loans to the governments of peripheral countries rather than being stuck with idle capital. When the
World economy heated up ag ain, interest rates rose and many count ries fo und themselves facing a debt crisis. The
World Bank and the International Mo netary Fund (IM F), in tande m with Western g overnments, worked to p revent a
global fina ncial crisis by organizing and g uaranteeing programs that eased poor countries’ debt b urd ens. Western
ba nks were encourag ed to swap debt for equity stakes in nationalized industries, while debtor governments were
persuaded to impose austere economic policies. These policies have helped ease t he debt crisis, but often at t he
expense of severe hardship for ordi nary people. In dark humor, among radica l d evelopment theorists IMF came to
Stand fo r “imposing misery and famin e .” (So urce: World Bank, G lobal Development Finance.)
230
HUMAN GEOGRAPHY
Places and Regions in Global Context
CHAPTER 7
FIGURE 7 .12 Cocoa production Workers
spread cocoa to dry in a Ghana hamlet.
Geographies of Economic Development
231
~O percent ~f the retail market. In the United States, it is coffee that
is the most important certified Fair Trade product, accounting for
up to $600 million in sales in 2009.
There are also Fair Trade organizations that are focused on
labor practices, s~ch as the Ethical Trading Initiative (ETI), which
e.volved fro’.n Fair T rade c~mpaigns run by British aid organizatwns. ETI mvolves a multiagency grouping of companies nongovernmental organizations (NGOs), and trades unions tha’t have
together devised a basic code oflabor practices covering the right
to collective bargaining, safe and hygienic working conditions liv.
‘
mg wages, and a standard working week of no more than 48 hours.
Interpretations of International
Patterns of Development
an improvement for the exporting country. No matter how efficient
primary producers may become, or how affluent their customers,
the balance of trade is tilted against them. Quite simply, they must
run in order to stand still.
An obvious counterstrategy for peripheral countries is to attempt to establish a new role in the international
Purchase answer to see full
attachment