GLOBAL ECONOMY

Introduction

Innovations in transportation, communications and business organization during the last half of the twentieth century have helped bring about major changes in the world’s economic geography. Where unrelieved poverty was once nearly universal in areas outside of Europe and North America, we now find evidence of more widespread economic development. However, not all countries have benefited equally from these improvements. In fact, it is not uncommon to find sharply different levels of economic development within individual geographic regions. This activity will help you gain a basic understanding of these emerging patterns of economic development and economic inequality.

Learning Objectives

This activity is designed to help you understand the following:

Setup

In your browser, open the mapping program URL: http://geogserver1.fullerton.edu/webmaps/economyjava_2/economy.html
If the map fails to appear, try the alternate site http://geography.fullerton.edu/webmaps/economyjava_1/economy.html
When the map appears, resize the browser window to make the scroll bars disappear. Note: your browser must be Java-enabled for the program to work properly.

Global Economic Development

One widely used measure of economic development is Annual Per Capita Gross Domestic Product (GDP). Per capita GDP measures the total value of all goods and services produced in a country during a given year divided by the size of the country's population. Based on data for 1999, a country with a per capita GDP over $15,000 ranked among the world's wealthiest; a country with a per capita GDP under $1000 fell among the world's poorest.

Let's use the world map to summarize the differences in per capita GDP among the various geographic regions.

On the map, identify the three regions that contain most of the areas with very high levels of economic development. If you are not sure about the region names, click on any country within the region and look at the information in lower right of the screen.

It is unusual for all the countries in a region to share the same level of development. Instead, the countries of most regions represent a range of development, such as Very Low and Low, Low and Medium, etc. Some even have a wider range of levels of development, with very poor countries located close to much wealthier ones. Use the Zoom button to take a closer look at per capita GDP in the different regions. You can also Click the mouse on individual countries within a region to learn more details. As you move from region to region, answer the following:

Mexico, the wealthiest and most populous country in Middle America, has a mid-range GDP of about $8,000. Honduras, the poorest country in the region, has a much lower GDP of just over $2,000.

North Africa and Southwest Asia is a region of dramatic contrasts in the level of economic activity. Some countries have very high per capita GDP thanks to the huge quantities of petroleum they are able to produce. Others, with little or no oil production, are among the world's poorest countries.

With few exceptions, Subsaharan Africa is a broad region marked by poverty and lack of economic opportunity.

The former Soviet Union was once considered a super power because of its large population, abundant resources, and powerful armed forces. Economically, however, it more closely resembled a developing country than an industrial power. The poor performance of the Russian economy since the collapse of the USSR reconfirms that view.

The level of wealth of South Asia area remains low because the region's huge population consists primarily of subsistence farmers. Subsistence farmers produce crops for their own immediate consumption. They have little surplus to sell in markets and little cash with which to purchase the goods and services produced by others.

East Asia is a region of contrasting levels of economic development, ranging from the very high per capita GDP in Japan and Taiwan, to the very low levels in North Korea. China, the largest country in East Asia, has a low per capita GDP of about $3,600.

Europe is generally thought of as one of the world's wealthiest regions. Indeed, no country of Europe is among the world's poorest. However, the economies of Eastern Europe do not reach the high levels of wealth found in Western and Northern Europe.

Economic Indicators: Energy Production

In recent decades, a number of countries have been able to improve their level of economic development through the production and export of the crude oil. This path toward economic development depends on two factors: the uneven global distribution of petroleum reserves and the insatiable appetite for energy in the wealthiest countries. Let’s look at the map:

Nature has favored many though not all of the countries of North Africa & Southwest Asia with abundant petroleum reserves.

Major oil producers in North Africa/Southwest Asia include countries such as Saudi Arabia and Kuwait with whom the United States has friendly relations, as well as others such as Iraq, Libya, and Iran where relations are generally poor.

Elsewhere across the globe, only a handful of individual countries are major energy exporters. Click on major oil producers in regions other than North Africa/Southwest Asia to identify them:

Some of these countries remain poor despite having substantial oil exports. This is especially true for oil exporters with large populations.

In countries such as Indonesia and Nigeria, GDP levels remain lower in part because the benefits of the petroleum dollars are spread across a very large population.

Economic Indicators: Manufacturing and Services

For a small group of other countries, the path toward economic development has involved a major transformation of the economy. In those countries, manufacturing, and to a lesser extent services, are replacing agriculture as the dominant forms of economic activity. The goal of these countries is to expand their economies by manufacturing goods such as clothing or electronics for export to the world’s wealthier countries.

Let’s look at a few examples of these industrializing countries:

Now zoom in on Southeast Asia:

Foreign investment in manufacturing during the late 1980s and early 1990s helped the economies of several countries in Southeast Asia to expand very rapidly. However, problems with high debts and weak currencies during the late-1990s caused a portion of that capital to be taken out of Southeast Asia and reinvested in safer markets elsewhere. The result was an economic crisis that threatened the growing prosperity of Southeast Asia.

Economic Development in China

As we enter the 21st century, there is considerable speculation about the enormous economic potential of China. Let’s see what the current reality is like:

China does have a large economy and China is industrializing very rapidly, but does that mean it is a wealthy country?

Although China's per capita GDP is still relatively low, it represents an enormous potential both as a market and as an industrial giant because it combines a rapidly growing economy with the world's largest population.

Where Rich and Poor Meet: The Geography of Uneven Development

One thing we learn in geography is that neighbors matter. For example, wherever we find poorer countries located adjacent to richer ones, we are also likely to find pressure for economically motivated migration. Let’s explore the world map looking only at neighboring countries with sharply different levels of economic development.

 Review Questions:

Try to answer the following review questions without looking back at your answers or at the computer. If you don't remember, then look back to find the answers.

 Exit the GIS Program

When you are finished:

Be sure to put you name on the completed Scantron form and hand it in to the lab instructor. Keep the activity questions.