Emerging Economies

Key Terms

developing nations, newly developed nations, welfare state, nationalization

Find Out

• How have economic choices affected the development of nations in Latin America and Africa?

• What are the important economic choices that developing and newly developed nations must make?

Emerging Economies

Understanding Concepts

Comparative Government What are the differences and similarities of socialist governments and communist governments?

Section Objective

Discuss economic problems that have challenged developing nations and attempts to solve those problems.

As many Latin American nations developed their economies, land reform turned some toward socialism. In Chile, a socialist government led by Salvador Allende began an ambitious program to break up large land holdings and redistribute land to the people. In 1973 the army overthrew Allende, established a military government, and ended land reform and socialism in Chile.

A. Developing nations are states with little or no industry.

I. Developing and Newly Developed Nations (page 772)

B. Newly developed nations are states that have had significant or rapid industrial growth in recent years.

I. Developing and Newly Developed Nations (page 772)

If you were the leader of a newly developing nation, what economic model would you want to follow? Explain.

Answers will vary. Discuss capitalism, socialism, or a mixed system.

I. Developing and Newly Developed Nations (page 772)

A. Some developing and newly developed nations rely on the free market, trade and contacts with the West to develop their economies; others rely on socialist economic models.

II. The Economic Choices (pages 722–724)

B. Under socialism the government only owns and controls some factors of production.

C. Socialists believe that wealth should be distributed as equally as possible. They try to achieve this goal by making basic goods and social services available to everyone.

D. Critics of socialism claim socialist policies create a welfare state.

II. The Economic Choices (pages 722–724)

Do you think government should have a major role in the economy? Why or why not?

Answers will vary. Discuss advantages of specific services and regulations of government.

A. Socialist governments in developing and newly developed countries use more central planning than developed socialist countries do.

III. Searching for Economic Answers(pages 724–

726)

B. Socialist governments often take control of industries by nationalization.

C. Many developing nations, especially in Latin America, have a history of foreign-owned industries.

D. Nationalization in Latin America has been both an economic policy and a symbol of anti-colonialism.

E. Until recent moves toward free enterprise, Israel had a moderate socialist economy.

F. After independence, many African nations tried to develop economies based on one cash crop or one resource for trade.

G. Economic difficulties forced African countries south of the Sahara to take on $130 billion worth of debt by the 1980s.

III. Searching for Economic Answers(pages 724–

726)

III. Searching for Economic Answers(pages 724–

726)

How do you think central planning by the government can be helpful in a developing nation?

Answers will vary. See Searching for Economic Answers on text page 724.

A. Socialist ideology remains a popular and widely held belief in the developing world.

IV.Socialism’s Practical Problems (page 726)

B. Socialism often fails to live up to its promises because capital investment is a primary need for developing economies. Failure of large-scale economic planning in Eastern Europe has raised doubts that it can work.

C. Western governments have exercised influence and pressure in favor of a combination of free markets and democracy in developing nations.

IV.Socialism’s Practical Problems (page 726)

How do you think the socialist model can be improved?

Answers will vary. See Socialism’s Practical Problems on text page 726.

1. Main Idea Create a graphic organizer like the one below. In the left box, identify the economic issues facing developing countries. In the right box, list policies some have adopted to promote economic progress.

Checking for Understanding

Answers might include: Issues—foreign ownership of industry, how to achieve rapid industrial growth, development of cash crops for export; Policies—nationalization of industry, centralized planning, agricultural communes, acceptance of foreign aid and loans

___ developing nations

___ newly developed nations

___ welfare state

___ nationalization

A. nations that have had significant or rapid industrial growth in recent years

B. the process by which a government takes control of industry

C. nations only beginning to develop industrially

D. a nation that has an economic system that provides many welfare programs

Checking for Understanding

C

A

D

B

Match the term with the correct definition.

3. Identify centralized planning, kibbutzim.

Checking for Understanding

Centralized planning is government control of the economy.

Kibbutzim are collective agricultural communes.

4. Why have many Latin American industries been foreign-owned?

Checking for Understanding

Many Latin American industries have been foreign-owned because of their colonial history or their reliance upon foreign investment.

5. What factor contributes to socialism in Africa?

Checking for Understanding

Some African leaders adopted socialism because they viewed Western capitalism as another form of colonialism.

6. Making Comparisons Analyze the economic choices that developing and newly developed nations must make in an increasingly interdependent global economy.

Critical Thinking

Developing nations may seek to industrialize as rapidly as possible, whereas newly developed nations may seek to sustain their rate of growth and influence the world economy.

Comparative Government Review the characteristics of economies under socialist governments and under communist governments. Create an organizational chart that illustrates decision making under each of these types of government.