XMind

Reasons for Underdevelopment

1. Economic

   1. Adverse impact of IMF and World Bank

      1. Inability to act could plunge economy into underdevelopment

         1. Potential worst case scenario of Euro crisis could leave economies that default in serious depression without IMF and World Bank assistance

      2. South East Asia Crisis arguably caused by force from IMF and World Bank to remove regulation on short-term capital flows

   2. Weak underlying infrastructure

      1. Could be hard to be improve particulary if tax collecting infrastructure is poor

         1. Potential that this characteristic has reversed considering China has more network coverage than the U.S.

   3. Adverse impact of aid

      1. Of the $280bn that the Nigerian government has received in aid, most of which has failed to reach indigenous population

      2. Dead Aid - claims that aid fostered dependency, encouraged corruption, perpetuated poor governance and poverty

2. Political

   1. Foreign Policy

      1. Political tension could arise and could lead to conflict

         1. Iranian government's controversy of involvement in murder of Saudi Arabian ambassador to the US could lead to sanctions

   2. Groupings

      1. Social

         1. Lack of pressure to develop democratically and respect human rights

            1. However, even most Commonwealth nations have homosexuality as a criminal offence

         2. Lack of attribution to social grouping could lead to isolation in trade

            1. Considering most of African nations belong either to Commonwealth or its French equivalent, countries left out are really a minority

      2. Economic

         1. On developed countries (as in potential to become underdeveloped)

            1. Could have domestic manufacturing and most secondary industry wages depressed through shift of focus to cheaper locations

         2. On developing countries

            1. Could have economic prosperity undermined if excluded from trade

               1. Feel of threat to China through exclusion from Asean

            2. If exposed in economic groupings could have labour exploited through free trade

               1. Impact on Mexican rural farmers of NAFTA as 19,000 have become unemployed since signing of NAFTA

               2. 24% decline in wages in Nike sweatshops in Thailand over last three years

            3. Creates 'race to bottom' in environmental standards

               1. East Asia and Indian subcontinent have undertaken drastic measures to allow excessive pollution to attract TNCs

   3. Colonial legacy

      1. Possibly inhibts democratic potential

         1. Consider Belgian and Dutch legacy on most of Sub-Saharan Africa

3. Geographical

   1. Landlocked

      1. Sudan as example of being limited to trade with neighbours

   2. Natural resources

      1. Lack of essential factors of production/exportable commodities

         1. South Africa cited lack of resources as explanation for lack of growth

      2. Curse of the natural resources

         1. Dutch Disease

            1. Idea came from Holland's discovery of mass natural gas supplies in the North Sea

               1. Best example is the Democratic Republic of Congo's issue with diamonds

         2. 'Paradox of Plenty'

            1. Venezuelan politician that helped found OPEC warned that oil could bring about fall of Venezuela

         3. Revenue volatility

            1. Oil and diamonds accounted for 99.3% of Angolan exports

               1. What happens when prices of these commodities fall?

      3. Food security

         1. Between 2006 and 2008, price of rise rose by 216%, price of wheat by 136% and price of corn by 125%

            1. Impact on people that already struggle to afford food

               1. Maybe governments can't afford to subsidize food

      4. Corruption potential

         1. Nigerian issue in the Ogoniland with Royal Dutch Shell

   3. Transport/shipping accessibility

      1. Countries like Mongolia have a lack of trade due to sheer distance from trading ports

   4. Natural hazard frequency and severity

      1. More than 500,000 were displaced in 2004 tsunami in Indonesia

4. Cultural

   1. Work ethic

   2. Valuation of education

      1. Quality of intellegentisia

         1. Impact on policy making, leadership and brinksmanship

            1. Nigeria, for example, has failed to effectively and efficiently utilize aid

      2. Labour quality

         1. Has forced many of the South East Asian countries to over-rely on manufacturing which doesn't require many skills

5. Demographic

   1. Values and attitudes towards death rates

      1. Sierra Leone has a death rate of 22.1

         1. Youthful population

            1. Assymetric labour force

               1. Excessive competition in jobs for younger people (mining and other physically demanding tasks)

               2. Insufficient jobs in tertiary sector as skilled labour die young

   2. Values and attitudes towards birth rates

      1. The Democratic Republic of Congo has a birth rate of 49.6

         1. Overpopulation can lead to overcrowding and form slums

         2. Puts pressure on scarce resources (education, oil etc.)

6. Social

   1. Disease

      1. Malaria as impediment to development

         1. Over 25,000 per 100,000 Liberians suffer from Malaria

      2. HIV as impediment to development

         1. 26.7% of adults between 15-49 in Swaziland have HIV