CONCEPTS AND INDICATORS OF DEVELOPMENT

Development refers to the sustained level of economic and social well being in a country.

CONCEPTS

Sustainable Development

Sustainable development has been described as development that meets the needs of the present
without compromising the ability of future generations to meet their own needs. This refers to the
concept of advancing the quality of life of citizens both in terms of economic criteria and human
dynamics, along with the conservation and protection of the environment. The Caribbean faces
many challenges in its efforts to achieve sustainable development, these include: lack of financial
resources, expertise, technology.

For instance in Haiti issues of poverty forces citizens to cut down trees for firewood, thus
depleting the forests and creating soil erosion. Therefore in Haiti sustainable development
measures have to be focused on poverty reduction. However, the poor are not the only group
responsible for limiting sustainable development. Big companies that overfish and dispose of
waste improperly contribute to the destruction of resources. In addition there is a conflict
between keeping up with modernity and preserving our heritage.

Economic Development

Terms used to classify countries are usually based on the economic status of that country.
Typically development is attained through economic growth. Economic growth is an increase in
the value of the goods and services produced by a country with a time period. Economic growth
would eliminate issues such as: poverty, illiteracy, technological backwardness and rural neglect.
Economic indicators have been devised to measure aspects of development that could be
compared across different countries; however these indicators seem to measure economic growth
rather than ‘development’ – these indicators include:

(i) Gross National Product [GNP] – this is the value of output/goods and services
produced by a country inclusive of income derived from overseas; including
remittances. However GNP does not consider revenue acquired from informal
economic activities; neither does it show how the income/wealth is distributed in the
country; as increased income may be in the hands of a few.
(ii) Gini Coefficient – this is the measurement of the development of a country based on
the levels of inequality in the society; taking into consideration the income allotted to
each percentage group in the population.
(iii) Gross Domestic Product [GDP] – this is the total value of the output of a country in a
given year.

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 (iv) Population Growth Rate – birth and death rates, along with migration statistics are
considered as indicators of economic growth. If a country is able to keep population
growth low then its per capita income should rise.
(v) Age dependency ratio – this is the ratio of the country’s dependents [under 15yrs.
And over 65 yrs.] to the working age population. Low dependency ratio means the
majority of the population are contributing to economic development and the
government would need to spend less on social services and more on infrastructures
for development.

Human Development

In many contemporary societies development is associated with other factors apart from
economics; instead development is measured in terms of: life expectancy, literacy, birth/death
rate and income. Raising people’s living levels [income, education, access to medicine,
consumption] prevent underdevelopment. Therefore economic development is a necessary
condition for the improvement of quality of life. Thus we know development is taking place by
looking at the quality of life of citizens. Poverty and income inequality are the major factors that
prevents improved quality of life. Ensuring citizens have continued access to freedom is
important for development; these freedoms include: personal security, rule of law, freedom of
expression, political participation and equal opportunity. Therefore to ensure development the
four pillars of HDI/HDP must be achieved [pg. 244 - 245, Mohammed]

INDICATORS OF DEVELOPMENT
Gross Domestic Product [GDP]

This is the total value of the output of a country in a given year; meaning the total value of goods
and services produced within a country.

Gross National Product [GNP]

This is the value of output/goods and services produced by a country inclusive of income derived
from overseas; including remittances.

Per Capita Income

Per capita GNP is derived by dividing the GNP by the population. This indicates the average
income of citizens in a country and is used to classify the country as: high, middle or low
income. It is important to note that the per capita calculation result is not the real earning of any
individual in the country, but it is useful for comparing countries. For example per capita income
for Trinidad in 2009 was US$23,507 while for Barbados it was US$ 17,956. By contrast Jamaica
was US$ 6079 and Haiti was US$1155. It is important to note that the number of people who
have to share the GDP will make a big difference in the availability of funds.

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Gini Coefficient

This seeks to show the disparities within a country and is therefore the measurement of the
development of a country based on the levels of inequality in the society; taking into
consideration the income allotted to each percentage group in the population. Gini Coefficient
ranges from 0 to 1; other economists multiply by 100 and thus the range will be from 0 to 100. A
low Gini Coefficient indicates a more equal distribution of wealth, with 0 corresponding to
complete equality. However, in the Caribbean the average Gini Coefficient is 0.4; indicating a
huge gap between the wealthy and the poor.

Human Development Index

The HDI measures the average achievements in a country in terms: wealth, health and education.
HDI combines life expectancy at birth, education as reflected by both literacy rate and school
enrolment; along with standard of living reflected by GDP in US$. In 2010 the HDI for selected
Caribbean countries were listed: Jamaica was ranked 100th, Haiti was ranked 149th; while
Barbados was ranked 37th and Trinidad & Tobago was ranked 64th.

Productivity

This relates to the efficiency and cost effectiveness in the production of goods and services; in
terms of developing the cheapest and most timely route to get from the raw material to the
finished product. To increase productivity domestic savings and foreign finance must be used to
generate new investment in physical capital goods and also build the human capita; through
investment in education and training.

Levels of productivity are also attributed to the quality of the human resources, the organization
of production system and measures implemented to increase their productive growth. Evidence
of production can be measured by the number of industrial action taken by workers, rise in
export facilitating more foreign exchange earnings, along with the pace of industrialization.
Additionally there needs to be a balance between inputs and outputs; therefore there should be
higher output relative to input, this is an indication of higher efficiency.

Internet Penetration

Internet allows for better global communication and international economic activity. Previously
in the Caribbean internet access was limited to data entry industries using unskilled labour force;
however, currently internet access is widely available.

Modern Technology

This refers to increased usage of capital intensive use of machinery rather than labour intensive
economic activity. Increased technology drives industrialization by the demand of machines,
which are more efficient in output.

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Good Governance

The UN defines good governance as “… [government that is] participatory, consensus

oriented…responsive, effective, efficient, equitable, and inclusive and following the ‘rule of
law’”. This means governance that is fair, transparent and accountable, along with one that
utilizes aid, loans and resources in a responsible manner. Additional good governance keeps
corruption to a minimum and caters to the needs of the present populace while securing the
future of others.

Levels of income

Income levels show the income category of a particular country as identified by the World Bank.
It also refers to the varying income that different groups in a society receive and the width of the
disparity.

Social and Economic Equalisation

This refers to the differences between social classes in terms of income earned and the quality of
life experienced. If each social group is close in terms of the kind of lifestyle they experience
there will be fewer gaps in those having higher status jobs. However historical circumstances and
political realities in the Caribbean prevent this equalization. Historically, racial and class
prejudice existed and this continues in contemporary societies, thus maintaining the status quo.

Politically the elite will withdraw their financial support from politicians if they feel they are
implementing too many policies designed to improve the conditions of the poor at their expense.
In addition redistribution of wealth is unlikely as economic and political ideologies support
capitalism and free enterprises. Internally redistribution could likely bring about civil unrest,
especially among those groups losing their privileged status. Also, even if the Caribbean wanted
to redistribute wealth it would be difficult to do that as the Caribbean is involved in exploitive
relationships with capitalist countries.

Modern language

This refers to the influence of modernizing institutions such as schools and factories, which will
promote urban industrialized societies. This knowledge stresses efficiency, cost effectiveness,
rationality, logic and organizational skills. Increase in the modern language, is usually an
indication that development is taking place; this is because increased knowledge leads to
increased productivity.

Responsible Environmental Factors

Environmental indicators refer to changes to the quality and condition of the air, water, land, and
ecological systems. To ensure this government incentives and public education should allow and
promote the principles of ‘reduce, reuse and recycle’.

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FACTORS THAT PROMOTE OR HINDER DEVELOPMENT

Development is facilitated by a number of factors and they do not all have to be economic; for
instance Cuba’s HDI ranking in 2010 was 51st, but in 2009 Cuba’s GDP per capita was US$6876.
Therefore, Cuba’s population was socially more developed than St. Kitts [62nd] and Bahamas
[52nd]. However in terms of GDP per capita St. Kitts was US$14,481 and Bahamas was
US$20,253.

Therefore it is evident that economics cannot be the only factor that measures development;
social and political factors have roles in determining the development of a country.

Gender Inequality

The Gender Inequality Index [GII] seeks to determine the place of women in the labour force,
women’s empowerment in political life and reproductive health.

Political ideologies/popular movements

Political ideologies are systems of beliefs about governance and power that reflect the
needs/aspirations of particular social groups [capitalism, communism and socialism].The
political ideology that a country follows has tremendous impact on development. Varying
political ideologies create conditions that foster fragmentation and makes countries vulnerable to
external forces interfering in their domestic affairs [Grenada, Cuba and Haiti]. Political
ideologies also limit the ability of a country to coordinate foreign policy. However, the majority
of the Caribbean has been able to acquire stable democratic governments, which allows them to
be economically stable and attractive to investors. Internationally, capitalism and free enterprise
are seen as favourable and if Caribbean countries follow the capitalist principles then they would
receive a ‘stamp of approval’ from 1st World countries.

Some countries reject the capitalist ideologies and they follow other theories such as the
dependency theory. The dependency theory shows how colonialism encourages dependency and
poverty through exploitive trading relationships. However, countries which adopt a contrary
economic/political system apart from capitalism, receive little or no support from major capitalist
countries and this limits their development. This was evident after Castro’s Revolution, resulting
in the USA enforcing an economic embargo which lasted for decades.

Cuba was able to rely heavily on aid, credit and trade from the Soviet Union; however, by the
1990’s communism was dismantled in the USSR and other eastern European nations. Thus Cuba
was left alone following political principles abandoned by others; as a result Castro had to
implement a lot of liberal policies, such as opening up Cuba to tourism etc. Thus it is evident that
Cuba could not sustain a viable economy independent of the USSR. Even while the USSR was
supporting Cuba, there were still economic hardships resulting from the USA’s economic
embargo.

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Nevertheless, no political ideologies should be pursued so vigourously at the expense of
development. That is the reason many capitalist states have ‘socialist’ policies such as: free
education, health care and other social services.

The Grenada Revolution of 1983 resulted in USA invasion. Jamaica experienced economic
alienation during Michael Manley’s attempt at democratic socialism in the 1970’s; this alienation
served to destabilize the country resulting in economic hardship for the populace. In Haiti by
1804 they won their independence from France, but they were internationally estranged and they
committed to a war indemnity. Therefore Haiti started life as an independent country isolated and
indebt; additionally the culture of ‘rule of law’ was never developed, resulting in centuries of
political instability with numerous dictators, many of whom were assassinated.

Guyana also had a turbulent political history; in 1953 the British government invaded and
suspended the constitution to prevent Dr. Jeddi Jagan from taking his role as elected premier
because they feared he would introduce communism. Then in 1964 Burnham was elected and he
had an autocratic rule until 1985. Interestingly the election of 2006 in Guyana was considered to
be the first non-violent election; even though there was still evidence of divisive racial issues.

Distribution of Wealth and Resources

Distribution of wealth and resources impacts the income generated by the members in the
society. During the 1970’s in Jamaica 1% [21 families] of the population controlled 70% of the
wealth in the economy; this is because they controlled the means of production for example the
factories and land. If wealth is unevenly distributed that will hinder development; this is because
when wealth is concentrated in the hands of a few then the results are: low levels of investment,
high unemployment, low education, high levels of unskilled labourforce and even corruption.

Unequal distribution of wealth forces governments to borrow excessively at high interest rates,
resulting in higher internal taxation and rising inflation. Distribution of wealth could be
facilitated by improving/developing infrastructures, education, minimum wages, along with
better auditing and accountability of resources.

Changing Class Boundaries

If within a society there are no avenues/scope for social mobility then this can lead to conflict;
this is because people will see themselves as inferior to those with higher social status. Avenues
for social mobility must be available to ensure people feel ‘rewarded’ when they are being
industrious, visionary and productive.

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Entrepreneurial Drive and Activity

Encouraging creativity among the population is needed for development; for this reason
Barbados has Youth Entrepreneurial Scheme, which provides seed money for young self-
employed innovators. In Trinidad and Tobago tax concessions are given to help promote small
businesses. However, the education system in the Caribbean needs to cater and empower
ambitious and innovative entrepreneurs.

Caribbean Experience and Identity

The way the Caribbean interprets its history and future impacts the way development is seen.
This also relates to the way the Caribbean assesses itself in relation to others. For instance the
colonial experience is a type of psychological conditioning that placed value on the
achievements of the western world at the expense of the potential and achievements of the
Caribbean.

Natural and man-made disasters

The Caribbean is often frequented by natural disasters; in the history of the Caribbean 8 major
earthquakes have resulted in 16,000 deaths. Hurricane is the most consistent disaster that impacts
the Caribbean and has resulted in considerable financial burden, from damage to property,
infrastructure and economic activities [agriculture and tourism]. These disasters divert resources
that could be used to contribute to development; these resources are instead spent on
reconstruction and restoration.

Size

With the exception of Belize and Guyana, the Caribbean territories are relatively small and
mountainous. This situation has created high population density and housing developments have
reduced the large areas of flat land needed for agricultural production. This has resulted in the
region becoming a large importer of food, which hinders development.

Migration

Countries such as Guyana, Haiti and Jamaica have large proportions of their population living
outside the countries and the region; thereby depriving the territories of the talents and skills
needed for development. This brain drain negatively impacts the countries; however, in the
smaller territories such as Barbados, migration eases population pressure and migrants contribute
to the economy with their remittances and many return and invest in their country.

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Quality and Relevance of Education

In general the Caribbean societies have high literacy rate, for instance Barbados is at 99%,
Jamaica 86% and Haiti 62%. Despite this there is a high percentage of unemployment and
underemployment in the Caribbean. This implies that though the Caribbean is literate, what the
populace is being taught is not relevant to their lives. The education provided in the Caribbean
seemed to have been inherited from the colonial-style education system which aims to produce
an elite class; while failing to empower the masses or prepare them for a competitive labour
market. Creative ideas and entrepreneurship are not nurtured and instead ‘conforming right
answer’ is rewarded in standardized examinations. This leads to graduates expecting to get a
salary while working for someone else, continuing the ‘culture of dependency’.

Impact of productive sector

Productivity refers to the economy of a country, and development cannot be fully achieved
without a strong economy; the productive sector has different sections:

(i) Primary/extractive industries [fishing, forestry, farming, mining]

(ii) Secondary/manufacteuring [processing of raw materials: agro-industries, bauxite
smelting, bottling and canning]
(iii) Tertiary/service industries [teaching, insurance, retailing, transport, tourism]
(iv) Quaternary [research and development activities and computer/knowledge based
industries]

There are a number of factors that impact the productive sector and by extension Caribbean
development:

1. Competitiveness – commodities produced by the Caribbean are high cost items and these
items would not be sold easily on the world market if preferential treatment was not
given to us, for example the 1973 Lome Convention.
2. Demand – items produced [beverages, clothing and handicrafts etc] by the Caribbean are
not unique as they can be acquired elsewhere, so it is imperative that the Caribbean
produce unique products that will generate demand for example jerk seasoning and
coconut milk.
3. Productivity – many Caribbean territories are still involved in labour intensive
agricultural based activities. However, productivity could be improved with more
mechanization and the availability of more post-secondary training in a wide range of
skills to ensure a well educated and technically skilled populace.
4. Infrastructure – these include fully functioning telephone systems, reliable and safe
systems of public transport, regular water and electricity supply, reliable
telecommunications along with quick turn-around at ports. In addition ensure reduction in
bureaucracy that tie up or complete transactions.
5. Investment climate –environment needs to be created to ensure both local and foreign
investments for development.

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 6. Debt – many Caribbean countries owe huge amounts to overseas creditors and this
hinders development. The payment of high interests on these debts nullifies any growth
in the economy. It is difficult to reduce the debt of the Caribbean as we import more than
we export and money is needed for social infrastructures; however these are often
mismanaged or misappropriated.

Development positively impacts the productive sector in terms of:

 Generating  Distributive sector  Standard of living

employment develops increases
 Reducing  Increased foreign
dependency on exchange earnings
imports  Increase in exports

Tourism

Contribution and Challenges

The Caribbean with its tropical marine climate is very attractive for tourists; it is also very close
to one of its major market – North America.

Tourism encourages encroachment on the knowledge, technologies, religion and culture of the
indigenous peoples of the society. Tourism creates employment but it is seasonal and fickle as
growth in this sector is dependent on what is happening in the tourism markets; thus employment
and foreign exchange earnings are not secure. Tourism is harmful to the environment as it allows
for pollution and destruction of ecosystems. In the Caribbean many of the hotels etc are owned
by foreigners and so a lot of the profits are repatriated. Tourism thus perpetuates the ‘plantation
system’ where the profits do not benefit the general public.

Caribbean Tourism Organisation

This organization was founded in 1989 and it was created to increase global recognition of the
Caribbean as a tourism destination. The CTO has 32 members from across the Caribbean and the
organization strives to promote partnership among members, so that there is more collaboration
on marketing the region and there is more cooperation and less competition among members.

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