Download Answers: Development profile

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Volume 34, Number 2, November 2016
Answers
Development profile: Country S
Peter Smith
Did you work out the identity of Country S in this issue’s Development profile (back cover)?
This resource provides answers to the questions that were posed there, together with some
commentary.
Country S is one of the poorest countries in the world, with gross national income per capita (Atlas
method) of only $650 in 2014, placing it in the lowest 15 countries in the world. It is in the bottom 10
countries if we look at its human development index. About 50% of the population live below the
UNDP poverty line. Life expectancy is below 60, and the average years of schooling received by the
adult population is just 2 years.
If this were not enough, Country S has been subject to political instability and military coups, with
intervention from French troops in recent years to help bring about an agreement between the
government and rebel coalitions.
You probably identified this as a country in sub-Saharan Africa, but may have found it more difficult to
settle on a specific country. In fact, it is Mali, a land-locked country in West Africa. In area, it is the
eighth-largest country in Africa, but something like two-thirds of this is desert, and the country is
subject to drought. Mali was formerly a French colony.
Population growth
Figure 2 in the profile showed birth and death rates for Mali since 1970. If you look back at this figure,
you will see that the death rate has declined steadily throughout the period, from more than 30 per
1,000 to just over 10. However, the birth rate remained persistently high for most of the period, only
beginning to dip in the last years on the graph.
Think about what this means. If more are being born than are dying, the population will grow. For
example, in the last year of the data (2013), the birth rate was 44.1 per 1,000, whereas the death rate
was 10.8. This implies a natural population growth rate (ignoring migration) of 3.33%. This is unlikely
to be sustainable for a country like Mali, given the need to provide education and healthcare for
growing numbers of children. Indeed, in 2015, 47.5% of the population were aged 14 and below.
Demographic transition
Looking at other countries, many have followed a consistent pattern as development has taken place,
according to the model of the demographic transition. This argues that a society will go through a
period of falling death rates as real income increases, as this process brings with it improvements in
health and nutrition. In addition, as the educational level of the population improves, there comes a
better understanding of the importance of healthcare and good nutrition.
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As time goes by, social norms begin to change, and the need and desire to have large families
diminishes. Birth rates then begin to fall, reducing the rate of natural growth of the population. As
infant mortality falls, fewer children are seen as essential. As women begin to see income-earning
opportunities improve, the opportunity cost of having children increases. Social security systems make
it less important to have lots of children in order to provide for the adults when they reach retirement.
All these factors (and others) bring about a slowing of population growth. This pattern has been seen
across many countries — for example the UK as it went through and emerged from the Industrial
Revolution.
For some countries in Africa (including Mali), the decrease in death rates has yet to result in a change
in social mores, and the population continues to increase rapidly. The average rate of population
growth in Mali over the recent past has been 3% per year. If the growth rate were to persist at this
level, the size of population would double in only 25 years.
Economic growth is projected to increase at around 5% per year in the next few years, but with the
population growing at 3%, the net growth in per-capita incomes is likely to be relatively modest.
An undiversified economy
As a country that relies heavily on primary production, Mali faces vulnerability. Its main exports are
gold and cotton, but if prices are volatile, then export revenues will also be volatile, making it difficult to
introduce a long-term development strategy. If commodity prices are trending down over time, then
this reinforces the problems caused by volatility. Mali’s terms of trade have fallen by 23% since 2011.
Having an economy that depends on a narrow range of goods creates problems. However, for a poor
country such as Mali, the challenge of diversifying the economy is huge. Lacking good infrastructure,
physical and human capital, with high levels of poverty and volatile export earnings, it is difficult to see
how to meet the challenge. Political instability only adds to the problems.
The prospects for the future depend crucially at maintaining stability in the political environment, and
hoping that global cotton and gold prices do not fall in the future.
This resource is part of ECONOMIC REVIEW, a magazine written for A-level students by subject experts.
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