As people throughout the world awake each morning to face a new day, they do so under very different circumstances. Some live in comfortable homes with many rooms. They have more than encugh to eat, are well clothed and healthy, and have a reasonable degree of financial security. Others, and these constitute more than three-fourths of the earth's 6 billion people, are much less fortunate. They may have little or no shelter and an inadequate food supply. Their health is poor, they often cannot read or write, they are often unemployed, and their prospects for a better life are uncertain at best. An examination of these global differences in living standards is revealing.
If, for example, we looked first at an average family in North America, we would probably find a "nuclear" family of four with an annual incone of approximately $48,000. They would live in a comfortable suburban house with a small garden and two cars. The dwelling would have many comfortable features, including a separate bedroom for each of the two children. It would be filled with numerous consumer goods and electrical appliances, many of which were manufactured outside North America in countries as far away as South Korea, Argentina, and Taiwan. Examples might include computer hard disks made in Malaysia, DVD players manufactured in Thailand, garments assembled in Guatemala mountain bikes made in China. There would always be three meals a day plenty of processed snack foods, and many of the food products would also be ported from overseas: coffee from Brazil, Kenya, or Colombia; canned fish fruit from Peru and Australia: and bananas and other tropical fruits from Central America. Both children would be healthy and attending school. They could expect to complete their secondary education and probably go to a university, choose from a variety of careers to which they are attracted, and live to an average 77 years.
On the surface, this family, which is typical of families in many rich nations, apears to have a reasonably good life. The parents have the opportunity and the necessary education or training to secure regular employment; to shelter, clothe, feed and educate their children; and to save some money for later life. But against these "economic" benefits, there are always "noneconomic" costs. The competitive pressures to succeed financially are very strong, and during inflationary or recession any times, the mental strain and physical pressure of trying to provide for a family at levels that the community regards as desirable can take its toll on the health of both parents. Their ability to relax, to enjoy the simple pleasures of a country stroll, to breathe clean air and drink pure water, and to see a crimson sunset is constantly at risk with the onslaught of economic progress and environmental decay. But on the whole, theirs is an economic status and lifestyle toward which many millions of less fortunate people throughout the world seem to be aspiring.
Now let us examine a typical "extended" family in rural Asia. The Asian household is likely to comprise 10 or more people, including parents, five to seven children, wo grandparents, and some aunts and uncles. They have a combined per capita annual income, in money and in "kind" (e.g., they consume a share of the food they grow), of $250 to $300. Together they live in a poorly constructed one. room house as tenant farmers on a large agricultural estate owned by an absentee landlord who lives in the nearby city. The father, mother, uncle, and older children must work all day on the land. None of the adults can read or write of the live school-age children, only two attend school regularly, and they cannot expect to proceed beyond a basic primary education. All too often, the teacher is absent There is often only one meal a day; it rarely changes, and it is rarely sufficient to alleviate the children's persistent hunger pains. The house has no electricity sanitation, or fresh water supply. There is much sickness, but qualified doctors and medical practitioners are far away in the cities, attending to the needs of wealthier families. The work is hard, the sun is hot, and aspirations for a better life are continually being snuffed out. In this part of the world, the only relief from the daily struggle for physical survival lies in the spiritual traditions of the people.
Shifting to another part of the world, suppose that we were now to visit a large city situated along the coast of South America. We would immediately be struck by the sharp contrasts in living conditions from one section of this sprawling metropolis to another. There is a modern stretch of tall buildings and wide tree-lined boulevards along the edge of a gleaming white beach; just a few hundred meters back and up the side of a steep hill, squalid shanties are pressed together in precarious balance.
If we were to examine two representative families—one a wealthy family from the local ruling class and the other of peasant background—we would no doubt also be struck by the wide disparities in their individual living conditions. The wealthy family lives in a multiroom complex on the top floor of a modern building overlooking the sea, while the peasant family is cramped tightly into a small makeshift shack in a shantytown, or favela (a squatters' slum) on the hill behind that seafront building.
For illustrative purposes, let us assume that it is a typical Saturday evening at an hour when the families should be preparing for dinner. In the penthouse apartment of the wealthy family, a servant is setting the table with expensive imported china high-quality silverware, and fine linen. Russian caviar, French hors d'oeuvres, and Italian wine will constitute the first of several courses. The family's eldest son is home from his university in North America, and the other two children are on vacation from their boarding schools in France and Switzerland. The father is a prominent surgeon trained in the United States. His clientele consists of wealthy local and foreign dignitaries and business people. In addition to his practice, he owns a considerable amount of land in the countryside. Annual vacations abroad, imported luxury automobiles, and the finest food and clothing are commonplace amenities for this fortunate family in the penthouse apartment.
And what about the poor family living in the dirt-floored shack on the side of the hill? They too can view the sea, but somehow it seems neither scenic nor relaxing. The stench of open sewers makes such enjoyment rather remote. There is no dinner table being set; in fact, there is no dinner—only a few scraps of stale bread. Most of the four children spend their time out on the streets begging for money, shining shoes, or occasionally even trying to steal purses from unsuspecting people who stroll along the boulevard. The father migrated to the city from the rural hinterland a few years ago, and the rest of the family recently followed. He has had part-time jobs over the years, but nothing permanent. The family income is less than $800 per year. The children have been in and out of school many times, as they have to help out financially in any way they can. Occasionally the eldest teenage daughter, who lives with friends across town, seems to have some extra money—but no one ever asks where it comes from or how it is obtained.
One could easily be disturbed by the sharp contrast between these two ways of life. However, had we looked at almost any other major city in Latin America, Asia, and Africa, we would have seen much the same contrast (although the extent of inequality might have been less pronounced).
As a final aspect of this brief view of living conditions around the world, imagine that you are in the eastern part of Africa, where many small clusters of tiny huts dot a dry and barren land. Each cluster contains a group of extended families, all participating in and sharing the work. There is no money income here because all food, clothing, shelter, and worldly goods are made and consumed by the people themselves—theirs is a subsistence economy. There are no roads, schools, hospitals, electric wires, or water supplies, and life here seems to be much as it must have been thousands of years ago. In many respects it is as stark and difficult an existence as that of the people in that Latin American favela across the ocean. Yet perhaps it is not as psychologically troubling because there is no luxurious penthouse by the sea to emphasize the relative deprivation of longer. the very poor. Life here seems to be eternal and unchanging-but not for much longer.
One hundred kilometers away, a road is being built that will pass near this village. No doubt it will bring with it the means for prolonging life through improved medical care. But it will also bring information about the world outside, along with the gadgets of modern civilization. The possibilities of a "better" life will be promoted, and the opportunities for such a life will become feasible. Aspirations will set in motion. be raised, but so will frustrations. In short, the development process will have been set in motion.
Before long, exportable tropical fruits and vegetables will probably be grown in this now sparsely settled region. They may even end up on the dinner table of the rich South American family in the seaside penthouse. Meanwhile, transistor radios made in Southeast Asia and playing music recorded in northern Europe will become prized possessions in this African village. Throughout the world, remote subsistence villages such as this one are inexorably being linked up with modern civilization in an increasing number of ways. The process is now well under way and will become even more intensified in the coming years.
Listening to the poor explain what poverty is like in their own words is, if anything, even more harrowing than reading descriptions of it. Listen to some of the voices of the poor about the experience of poverty in Box 1.1.
This first fleeting glimpse at life in different parts of our planet is sufficient to raise various questions. Why does affluence coexist with dire poverty not only across different continents but also within the same country or even the same city? Can traditional, low-productivity, subsistence societies be transformed into modern, high-productivity, high-income nations? To what extent are the development aspirations of poor nations helped or hindered by the economic activities of rich nations? By what process and under what conditions do rural subsistence farmers in the remote regions of Nigeria, Brazil, or the Philippines evolve into successful commercial farmers? These and many other questions concerning international and national differences in standards of living, in areas including health and nutrition, education, employment, population growth, and life expectancies, might be posed on the basis of even this very superficial look at life around the world.
This book is designed to help students obtain a better understanding of the major problems and prospects for economic development by focusing specifically on the plight of the three-quarters of the world's population for whom low levels of living are a fact of life. However, as we shall soon discover, the development process in developing nations cannot be analyzed realistically without also considering the role of economically developed nations in directly or indirectly promoting or retarding that development. Perhaps even more important to students in the developed nations is that as our earth shrinks with the spread of modern transport and communications, the futures of all peoples on this small planet are becoming increasingly interdependent. What happens to the health and economic welfare of the poor rural family and many others in Southeast Asia, Africa, the Middle East, or Latin America will in one way or another, directly or indirectly, affect the health and economic welfare of families in Europe and North America, and vice versa. The steady loss of tropical forests contributes to global warming new disease spread much rapidly; economic interdependence steadily grows. The hows and whys of this global economic interdependence will unfold in the remaining chapters. But it is within this context of a common future for all humankind in the rapidly shrinking world of the twenty-first century that we now commence our study of economic development.
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