April 23, 2015, Opatija

RETHINKINGTERRITORY DEVELOPMENT

AND INTEGRATIONIN THE GLOBAL WORLD

Vera Boronenko, Vladimirs Mensikovs, Alina OhotinaDaugavpils University, Latvia

The presentation is worked out with support of the Marie Curie FP7-PEOPLE-2011-COFUND program - NEWFELPRO (The new International Fellowship Mobility Programme for Experienced Researchers in Croatia) within the project «Rethinking Territory Development in Global Comparative Researches (Rethink Development)», Grant Agreement No. 10 (scientist in charge – Dr. Sasa Drezgic)

Main feature of modern integration in the global world

• ON THE ONE HAND: the simultaneous functioning of many growth poles in the global economic space

• ON THE OTHER HAND: the enhancement of the interconnection of this space notwithstanding the existing dramatic gap in the socio-economic development of the territories

Source: Human Development Report 2013. The Rise of the South: Human Progress in a Diverse World

“Interconnection of differences”

Scientific problem

• In the scientific literature on economics it is possible to find the suggestions on “the global economic order” or “global economic system” as opposed to the views that the modern world is a set of “world-economies” according to F.Braudel

World’s economy vs. “World-economy”

• World’s economy – economic system of the whole world and of the whole mankind, “the market of the whole world” (Zh.Sismondi)

• “World-economy” – economically independent part of the globe, which in general is able to be self-sufficient; those one, which organic unity is based on its internal linkages and interchanges

3 characteristicsof a “world-economy”

1) a “world-economy” covers definite geographic space with natural, economic, cultural or mental borders

2) a “world-economy” has some center – capitalist city or country; this center is not stable in long-term period

3) a “world-economy” has horizontal (spatial) and vertical (social) hierarchy

Essence of relations between“worlds-economies”

• It is the trade with jewels, not with goods, which are vitally necessary for related “worlds-economies”

• So, economic self-sufficiency is the main characteristics of a “world-economy”

• Nowadays it would be useful to deal with “worlds-economies” on mezo-level (regional level) as sub-units of the capitalist “world-economy”

Northern-atlantic “world-economy”

• Iceland, USA, Canada, Netherlands, United Kingdom, Sweden, Finland, Denmark, Norway

• All these countries belong to the cluster of “leaders without growth capacity”

• It looks like senior, who is rich, experienced and still very capable, but old enough and with low development capacity (vice versa to his grandchildren)

ICELAND (average GCI growth 2005-14=-0,06)

CANADA (average GCI growth 2005-14=-0,01)

UNITED STATES (average GCI growth 2005-14=-0,03)

UNITED KINGDOM (average GCI growth 2005-14=-0,01)

NETHERLANDS(average GCI growth 2005-14=+0,01)

DENMARK (average GCI growth 2005-14=-0,04)

NORWAY (average GCI growth 2005-14=0)

SWEDEN (average GCI growth 2005-14=-0,01)

FINLAND (average GCI growth 2005-14=-0,02)

South-eastern asian“world-economy”

• Cambodia, Thailand, Malaysia, Singapore, Laos, Vietnam, China, Qatar

• All these countries (excl. Singapor) belong to the clusters with high growth capacity

• One of the reason of its development success could be close interconnection with another growing “world-economy” – “oil-muslim world-economy”

CAMBODIA (average GCI growth 2005-14=+0,07)

THAILAND(average GCI growth 2005-14=+0,01)

SINGAPORE(average GCI growth 2005-14=0)

MALAYSIA(average GCI growth 2005-14=+0,01)

CHINA(average GCI growth 2005-14=+0,06)

VIETNAM(average GCI growth 2005-14=+0,03)

QATAR(average GCI growth 2005-14=+0,09)

“Cultural” explanation

• It seems that modern “world-economies” on mezo-level have in general religious/mental determinative framework, it means – more or less common “culture of production and economic activity”

• Northern-atlantic “world-economy” has more or less common mental background of Lutheranism

• South-eastern asian “world-economy” has more or less common mental background of Buddhism

Explanation for “world-economies” by social infrastructure

• The primary, fundamental determinant of a country’s long-run economic performance is its social infrastructure, i.e. institutions and government policies

• Social infrastructure gives incentives for productive activities or predatory behavior

• Workers choose between production and diversionHall R.E., Jones Ch.I. (1998) Why Do Some Countries

Produce So Much More Output per Worker than Others? Quarterly Journal of Economics, 114, 83-116.

Pluralistic paradigm of territory development vs. evolutionary one

• Pluralistic (qualitative) paradigm argues that there are many types (qualities) of territory development in the global world, many self-reliant “developments”, not a single quantitative path of development as it is within evolutionary (quantitative) paradigm

GDP per capita and life expectancy at birth, 114 countries

Adults aged >20 years who are obese, %, 2008 (WHO Statistics)

2,6

4,7

19,5

21,8

5,1

8,4

28,9

21,6

0 10 20 30 40

Low income countries

Lower middle incomecountries

Upper middle incomecountries

High income countries

FemaleMale

Questions arising...• Is it possible to consider high economic

development of a country, if people there have no more health, education, satisfaction with life in comparison with so called “developing” or “underdeveloped” countries?

• Is it time to shift the focus from how much the economy produces, to what it produces, for whom and why (corporatism), that is, to replace the evolutionary (quantitative) paradigm of territory development by pluralistic (qualitative) one?

Conclusion-hypothesisof this research

• Following Human Development Report 2013 which argues that “the South needs the North, and increasingly the North needs the South” it could be suggested that one of the best source of further development for every country is interconnection with other “worlds-economies, i.e. diversity of development paths”

Development paths

• To increase resource consumption for improving material living standard

• To reclaim and recycle discarded materials• To develop new designs for increasing

durability of products made from scarce resources

• To encourage social and economic patterns that would satisfy the needs of a person minimizing irreplaceable substances he possesses and disperses

How to measurea state of territory development?

Questions for discussion

• How Croatian, Latvian and other economies use the potential of the global diversity of development paths? Do they interconnect with other “worlds-economies”?

• Why do Croatia, Latvia and other countries need economic growth? May be, they need more human development and integration based on other values?