Download Developed Country

Unit 7:
Developed and
Developing Economies
Lesson objective
You should be able to
1. differentiate between developed and
developing countries
2. describe developed and developing
countries and reasons for their different
stages of development
Key Words
1. developed
2. developing
3. Industrialised nations
4. development
Developing or Developed?
Video: Millenium Development Goals for
2015
Millennium Development Goals

In 2000, a total of 189 different nations
belonging to the United Nations agreed to
a set of millennium development goals
they hope to achieve by 2015.
Millennium Development Goals

Eradicate extreme poverty and hunger

Achieve universal primary education

Promote gender equality and empower woman

Reduce child mortality

Improve maternal health

Combat HIV/ AIDs malaria and other diseases

Ensure environmental sustainability

Develop a global partnership for development
Millennium Development Goals

Progress towards achieving all these
goals and targets is monitored using a
range of different statistical measures and
indicators
What is development?

According to World Bank, as many as half of the
world’s six billion inhabitants live on the
equivalent of less than $2 a day.

World bank is an international financial
institution that provides loans to developing
countries for capital programs.

The World Bank's official goal is the reduction of
poverty.
What is development?

Large numbers of world’s inhabitants are mired
in poverty, especially in Africa, while inhabitants
of the world’s richest countries live in both
relative and absolute luxury.

People in poor countries are getting wealthier
over time – a process link to globalisation
because poorer countries can raise their
standards of living by integrating with rich
countries.
What is development?

Development:

Economic – growth in the economic wealth of
an economy

Human – health, nutrition, education and a
clean environment
Development

Govt’s aim – continuous and sustained
economic growth

expand from developing economies to
developed economies

Development objectives – produce more output
and quality of essential goods such as food,
shelter and healthcare, reach more people in
need, raise SOL
Exercise 1:
Characteristics of DC & LDC
 The
picture depicts typical scenes from less
developed
countries
and
developed
countries.
 In pairs, discuss and list what you consider to
be the basic characteristics of
 less developed economies
 developed economies
Developed Country
is used to categorize countries with
developed economies in which the tertiary
sector of industry (R&D, pharmaceutical,
entertainment industry) dominate.
Developed economies are also sometimes
called industrialised nations.
Characteristics of DC





well-developed infrastructure
modern communication systems
a largely urban population
a healthy and educated labour force or
high levels of literacy
majority of output, income and
employment created by their service
sectors rather than manufacturing
Characteristics of DC




wide range of industries with firms of
different sizes
wide variety of goods and services
competence in high tech and science
high Human Development Index (HDI)
Less Developed Country
is used to categorize countries with
developing economies in which the
agricultural industry dominate.
LDCs
are often called developing
economies, suggesting that have low level
of economic development and their
industrial structure is developing.
Characteristics of LDC





low level of economic development
lack of sufficient or poor infrastructure
low levels of literacy due to lack of
education
Poor housing condition & lack of access
to clean water
undeveloped communication networks
Characteristics of LDCs






labor supply constraints
poor farming methods
very few firms producing other goods
and services
not enough food to feed a growing
population (overpopulation)
capital shortages
undeveloped financial markets
Characteristics of LDCs


a relatively low standard of living (live in
poor housing condition and no access to
clean water)
moderate to low Human Development
Index (HDI)
Examples of DC
Australia, Japan, Singapore, South Korea,
Taiwan, United Kingdom & United States
Examples of LDCs
Cambodia, Vietnam, Haiti, South Africa &
North Korea
Emerging economies
o
Also known as newly industrialised
countries
o
Undergoing significant growth in their
industries and infrastructure
o
but they have yet to display the full range
of characteristics of modern developed
economies
Emerging economies
oSome countries are developing rapidly,
such as India and China, and some
Eastern European countries such as
Armenia and Georgia,.
Development Indicators
1) Human Development Index (HDI)

is a composite statistic used as an index
to rank countries by level of "human
development" and separate developed
(high development), developing (middle
development), and underdeveloped (low
development) countries.

maximum possible value of 1
1) Human Development Index (HDI)

Health, diet and lifestyle, as measured
by life expectancy at birth,

Knowledge and education, as measured
by the adult literacy rate and school and
college enrolment rates,

Standard of living, as measured by gross
domestic product per capita
2) GDP per capita

or average income per person

most commonly used comparative
measure of development

Developed countries tend to have
relatively high GDP per capita
2) GDP per capita

GDP is a narrow measure of economic
development or welfare in a country

does not take into account of what
people can buy with their income,
access to health & education, the quality
of environment or level of security
against crime and violence
2) GDP per capita

Calculating average GDP per person
also tell us nothing about how incomes
are distributed between populations
3) Population on less than $1 per
day

Better measure of the level of poverty in
a country is the proportion of people
living on very low incomes, usually $1 or
$2 per day
4) Life expectancy at birth

People in DC tend to live longer than
people in LDC because they tend to
have better standards of living and
access to good food and healthcare.

In contrast, malnutrition, poor sanitation,
lack of access to healthcare, war and
famines mean that many people in LDC
do not live to old age
4) Life expectancy at birth

Other health-related indicators include
baby and mother mortality rates, the
proportion of children and adults
receiving against disease, & death rates
from various disease including HIV/Aids
5) Adult literacy rate

A good measure of education provision
in an economy is the proportion of the
adult population that is able to read and
write.

Other education-related indicators
include school and college enrollment
and completion rates among children
and young adults.
6) Access to safe water supplies
and sanitation

Clean water is a necessity and safe,
clean sanitation can help stop the
spread of diseases.

These are generally available to most
people living and working in developed
countries.

Yet, only around half of all people in LDC
had access to good sanitation.
7) Ownership to consumer goods

Low incomes and the lack of an efficient
production and distribution system for
goods and services in LDC means
ownership of consumer goods such as
washing machines, PC, telephones is
low compared to many DC.

Fast and efficient communications are a
necessary factor in the development of
an economy.
8) Proportion of workers in agriculture
compared to industry and services

High incomes in DC mean that people
have money to spend on shops, eating
out at restaurants and leisure activities.

They also want banks, insurance, public
transport, holidays and many other
services.

The large number of firms located in Dc
also requires a range of business
services.
8) Proportion of workers in agriculture
compared to industry and services

As a result, most employed people in DC
work in services while most employees
in LDC work in agriculture.

However, unemployment can be high in
LDC because there is so little work
available.

Many people instead try to self-sufficient
and produce food for their families.
8) Proportion of workers in agriculture
compared to industry and services

Any surplus can be sold at local markets
to earn some money or exchanged for
other goods and services through barter.
Reasons for low
economic development
(i) An over- dependence on agriculture
to provide jobs and incomes
 More
people in less developed economies
work in farming than in industry and
services compared to developed nations.
 Many
produce only enough food for
themselves and their families to live on
and very little surplus they can sell to earn
money.
(i) An over- dependence on agriculture
to provide jobs and incomes
 In
some areas there has been overfarming
which means the land is no longer any
good for growing crops.
 Failure
of rains to arrive in some areas
due to global climate change has also
meant crops can no longer be grown for
people to survive on.
(ii) Domination of international trade by
developed nations
 The
few natural resources less developed
countries possess, like coffee and sugar, are
bought in vast quantities by developed
countries.
 The
developed countries use their power to
pay a low price for these resources, and then
use them to make other goods and services
for their own people and for sale to less
developed countries at very high prices.
(ii) Domination of international trade by
developed nations
 Producers
in less developed countries
have not been able to compete as a result,
they have lost sales, incomes and jobs.
 Many
less developed countries feel they
are unfairly treated by the rich developed
nations.
(iii) Lack of capital
 While
incomes remain low and their
productions grow quickly, less developed
countries have found they must use all
their money on the purchase of basic
necessities, such as food and clothing,
leaving little money to invest in the making
of new machinery and building of factories.
(iii) Lack of capital
 Without
these capital goods, less
developed countries will not be able to
produce more goods and services they
need and which they could export to earn
more money from overseas trade.
 Less
developed countries will never
develop without the help of more
machines and factories, that is, without
capital goods.
(iii) Lack of capital
 To
buy goods, less developed countries
need to earn more money.
 This money can only come from the rich
and developed countries.
 So far, the developed countries have been
unwilling to help.
(iii) Lack of capital
 More
money for less developed countries
means less money for the developed
world.
 This is a prime example of scarcity and
opportunity costs.
(iv) Insufficient investment in education,
skills and healthcare
 Many
people in many less developed
countries do not have access to basic
education’ training and healthcare which
can help them become healthier, more
productive and more innovative workers.
(iv) Insufficient investment in education,
skills and healthcare
 Better
education about family planning
may also help to reduce birth rates and
improve living standards.
 If
workers are uneducated and lack of
skills then industry may be unable to
employ them.
(v) Low levels of investment in
infrastructure
 Less
developed countries have a poor
transport (road and rail) and
communications networks.
 This
makes travel and access to rural
areas, and the sharing of information, very
difficult.
(vi) Lack of an efficient production and
distribution system for goods and
services
 Many
less developed countries lack
industries and services.
 If
incomes are low, there is little incentives
for businesses to set up different shops
and retail centres.
(vi) Lack of an efficient production and
distribution system for goods and
services
 If
transport is difficult outside of cities then
people from rural areas cannot travel to
cities to shops, and it is also difficult to
take goods and services to rural
communities.
(vii) High population growth
 Less
developed countries have a large
and growing population.

This means that the available goods and
services have to be shared among more
and more people.
(viii) Other factors
 Unstable
and corrupt governments, and
wars with neighbouring nations, have often
blighted to the development of some less
developed countries.
 Money
that could have been used to
invest in economic development has in
some cases been misused by corrupt
officials or squandered on buying arms
and fighting wars.
Some important differences



Developing economics, like small industrial
countries, tend to be much more open to trade
in goods and services than are the major
industrial countries.
Developing countries typically have little
control over the prices of goods they export
and import.
Over half of the exports in developing
countries typically consist of agricultural and
primary commodities.
Poverty
 What
is poverty?
 How is poverty measured?
 What are the causes of poverty?
Poverty is
 having
little or no money, and few or
no material possessions
 associated with need
 lack of resources
 lack of education
 hunger
 little or no shelter
 powerlessness
How do you know someone is
poor?
 in
Canada, we have the poverty line.
 The
poverty line is at a certain
income per year on a chart.
 Anyone
who makes this amount of
income or less each year is
considered to be below the poverty
line, and therefore living in poverty.
How do you know someone is
poor?
 Seeing
someone lying on the street
with a sleeping bag, or carrying
around their belongings in a bag, will
be assumed that they are poor.
 If
a student continually brings no food
to school, it may be thought that they
do not have enough money for food.
How do you know someone is
poor?
 In
developing countries, poverty could
be measured by the amount of
materialistic goods one has.
 The
UN uses a human poverty
index to rank developing and
developed countries
Human Poverty Index
 Survival:
the likeliness of death at a
relatively early age and is represented by
the probability of not surviving to ages 40
(LDC) and 60 (DC)
 Knowledge:
being excluded from the world
of reading and communication and is
measured by the percentage of adults who
are illiterate.
 Decent
standard of living: In particular,
overall economic provisioning.
Human Poverty Index
Developing countries
• Probability at birth dying
before at the age of 40
• Percentage of people unable
to read or write
• Population below income
poverty line
• Population without
sustainable access to an
improved water source
• Proportion of underweight
children
Developed countries
• Probability at birth dying
before at the age of 60
• Percentage of people unable
to read or write
• Population with less than 50%
of average income
• Proportion of people
unemployed for 12 months of
more
HPI vs HDI
 only
real difference is the variables
each uses to compute the final Index.
The
 HDI
examines positive signs of
development, such as life expectancy,
while the HPI looks at negatives.
Where do we see poverty?
 On
television
 On the streets
 In our schools
 Give
a one word description about
what you were thinking while
watching the video
WANTING A MEAL
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