1 diverse structures and common characteristics study of developing nations
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Diverse Structures and Diverse Structures and Common Characteristics Common Characteristics
Study of Developing NationsStudy of Developing Nations
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Classification of EconomiesClassification of Economies World Bank classifies 208 economies World Bank classifies 208 economies
(population=/> 30,000) based on (population=/> 30,000) based on gross national income per capita, 2000gross national income per capita, 2000
LICLIC =/< $755=/< $755 LMCLMC =$756-$2995=$756-$2995 UMCUMC =$2996-$9265=$2996-$9265 High- income OECDHigh- income OECD =/>$9226=/>$9226 Other high-income countriesOther high-income countries Different classification of other-high Different classification of other-high
income countries income countries
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Classification of EconomiesClassification of Economies Gross National Income is the total
final output of goods and services produced by the economy, plus net factor income from the rest of the world, minus sales taxes
Gross domestic product (GDP) + net factor payments = Gross national product (GNP)
GNP- sales taxes = Gross national income
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Classification of EconomiesClassification of Economies
East Asia and the East Asia and the Pacific:Pacific:
Korea, RepKorea, Rep
ChinaChina
IndonesiaIndonesia
UMCUMC
LMCLMC
LICLIC
Europe and Central Europe and Central Asia:Asia:
Czech RepublicCzech Republic
LithuaniaLithuania
ArmeniaArmenia
UMCUMC
LMCLMC
LICLIC
Latin America and the Latin America and the Caribbean: Caribbean:
BrazilBrazil
CubaCuba
NicaraguaNicaragua
UMCUMC
LMCLMC
LICLIC
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Classification of EconomiesClassification of Economies
Middle East and North Middle East and North Africa:Africa:
BahrainBahrain
IraqIraq
Yemen, RepYemen, Rep
UMCUMC
LMCLMC
LICLIC
South Asia:South Asia:
Sri LankaSri Lanka
IndiaIndiaLMCLMC
LICLIC
Sub-Saharan Africa: Sub-Saharan Africa:
South AfricaSouth Africa
NamibiaNamibia
EthiopiaEthiopia
UMCUMC
LMCLMC
LICLIC
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Classification of EconomiesClassification of Economies
High Income OECD:High Income OECD:
AustraliaAustralia
CanadaCanada
USAUSA
JapanJapan
DenmarkDenmark
FranceFrance
SwitzerlandSwitzerland
UKUK
Other high income countries:Other high income countries:
The BahamasThe Bahamas
KuwaitKuwait
Hong Kong, ChinaHong Kong, China
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Structural Diversity of Developing Structural Diversity of Developing EconomiesEconomies
Size (geographical, population) and income of Size (geographical, population) and income of the country the country
Historical and colonial backgroundHistorical and colonial background Physical and HR endowmentsPhysical and HR endowments Ethnic and religious compositionEthnic and religious composition Relative importance of public and private Relative importance of public and private
sectorssectors Nature of its industrial structureNature of its industrial structure Degree of dependence on external economic Degree of dependence on external economic
and political forcesand political forces Distribution of power, institutional and Distribution of power, institutional and
political structurespolitical structures
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Structural Diversity of Developing Structural Diversity of Developing Economies: Population and Income Economies: Population and Income
Population Population (mill)(mill)
GNP per GNP per capita (USD)capita (USD)
Most PopulousMost Populous
1. China1. China
2. India2. India
3. USA3. USA
10. Japan10. Japan
1,2611,261
1,0161,016
282282
127127
840840
460460
34,26034,260
34,21034,210
Least PopulousLeast Populous
1. St Kitts-Nevis1. St Kitts-Nevis
2. Antigua and Barbuda2. Antigua and Barbuda
3. Dominica3. Dominica
4141
6868
7373
6,6606,660
9,1909,190
3,2603,260
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Structural Diversity of Developing Structural Diversity of Developing Economies: Industrial structureEconomies: Industrial structure
CountryCountry % of L Force% of L Force % of GDP% of GDP
AgricultuAgriculturere
IndustrIndustryy
AgriculturAgriculturee
IndustrIndustryy
NigeriaNigeria 5454 55 4343 2525
BangladeBangladeshsh
6464 1414 3030 1818
BrazilBrazil 3131 2727 1414 3636
All All DevelopinDevelopingg
6060 1717 2020 3838
USAUSA 22 2525 22 2929
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Structural Diversity of Developing Structural Diversity of Developing Economies: Important observationsEconomies: Important observations
There is no necessary relation among a There is no necessary relation among a country’s size, per capita income, and country’s size, per capita income, and degree of equality/ inequalitydegree of equality/ inequality
Colonialism exposed African and Asian Colonialism exposed African and Asian countries to new forms of potential countries to new forms of potential exploitation and have resulted in exploitation and have resulted in different institutional and social patternsdifferent institutional and social patterns
Except for the Persian Gulf oil states, Except for the Persian Gulf oil states, most developing countries have minimal most developing countries have minimal endowments of raw materials and endowments of raw materials and mineralsminerals
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Structural Diversity of Developing Structural Diversity of Developing Economies: Important observationsEconomies: Important observations
Ethnic and religious conflicts have become Ethnic and religious conflicts have become frequent post cold war. Indigenous frequent post cold war. Indigenous populations continue to be discriminated populations continue to be discriminated against in Latin American countries. against in Latin American countries. Malaysia and Mauritius are exceptionsMalaysia and Mauritius are exceptions
Most developing economies have mixed Most developing economies have mixed economic systems and the degree of economic systems and the degree of corruption differs widely across countriescorruption differs widely across countries
Majority of developing countries are Majority of developing countries are agrarian and agriculture is a way of life for agrarian and agriculture is a way of life for the people. the people.
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Structural Diversity of Developing Structural Diversity of Developing Economies: Important observationsEconomies: Important observations
The various interest and power groups The various interest and power groups among different segments of the among different segments of the populations in a developing country is a populations in a developing country is a result of their economic, social, and result of their economic, social, and political historypolitical history
Case Study of Brazil and Costa RicaCase Study of Brazil and Costa Rica
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Common Characteristics of Developing Common Characteristics of Developing Nations:Nations:
Low levels of living and income inequalityLow levels of living and income inequality Extent of PovertyExtent of Poverty Health characterized by high IMRs and Health characterized by high IMRs and
malnutritionmalnutrition Low levels of education and literacyLow levels of education and literacy Low levels of labor productivityLow levels of labor productivity High rates of population growth and dependency High rates of population growth and dependency
burdensburdens Substantial dependence on agricultural production Substantial dependence on agricultural production
and primary product exportsand primary product exports Prevalence of Imperfect markets and incomplete Prevalence of Imperfect markets and incomplete
informationinformation Dominance, dependence, and vulnerability in Dominance, dependence, and vulnerability in
international relationsinternational relations
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Income inequality:Income inequality: Per Capita Gross National Per Capita Gross National Product in Selected Countries, 1997 (in U.S. dollars Product in Selected Countries, 1997 (in U.S. dollars at official exchange rates)at official exchange rates)
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Income:Income: Comparison of GNP Per Capita Comparison of GNP Per Capita GNP Per Capita (US $)GNP Per Capita (US $)
CountryCountry Exchange rateExchange rate PPPPPP
UKUK 24,50024,500 23,55023,550
USAUSA 34,26034,260 34,26034,260
ZimbabweZimbabwe 480480 2,5902,590
BangladeshBangladesh 380380 1,6501,650
ChinaChina 840840 3,9403,940
IndiaIndia 460460 2,3902,390
Sri LankaSri Lanka 870870 3,4703,470
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Income gapsIncome gaps: growth rates of real : growth rates of real GNP per capita GNP per capita (avg annual growth) (avg annual growth)
CountryCountry 1980-901980-90 1990-20001990-2000
Africa:Africa:
KenyaKenya
NigeriaNigeria0.30.3
-3.0-3.0-0.3-0.3
-0.4-0.4
Asia:Asia:
IndiaIndia
South KoreaSouth Korea3.23.2
8.98.94.24.2
4.74.7
Latin America:Latin America:
BrazilBrazil
MexicoMexico0.60.6
-0.9-0.91.51.5
1.51.5
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Distribution of IncomeDistribution of Income
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PovertyPoverty: Share of population living on < $1/ day: Share of population living on < $1/ day
RegionRegion 19901990 19981998
East Asia and PacificEast Asia and Pacific 27.627.6 15.315.3
Europe and Central Europe and Central AsiaAsia
1.61.6 5.15.1
Latin America and the Latin America and the Caribbean*Caribbean*
16.816.8 15.615.6
Middle East and N. Middle East and N. AfricaAfrica
2.42.4 1.91.9
South Asia*South Asia* 4444 4040
Sub-Saharan Africa*Sub-Saharan Africa* 47.747.7 46.346.3
TotalTotal 2929 2424* Increase in absolute number of people
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Health:Health: Infant Mortality Rates in Selected Infant Mortality Rates in Selected Countries, 1998 (per 1,00 live births)Countries, 1998 (per 1,00 live births)
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Health and Education: Health and Education: IndicatorsIndicators
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HDI and GDP RanksHDI and GDP Ranks
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HDI variations for similar incomes, HDI variations for similar incomes, 19991999
CountryCountry HDIHDI HDI rankHDI rank
GNP per cap~ PPP GNP per cap~ PPP $1000$1000
KenyaKenya
UgandaUganda
0.5140.514
0.4350.435123123
141141
GNP per cap~ PPP GNP per cap~ PPP $2000$2000
VietnamVietnam
PakistanPakistan
0.6820.682
0.4980.498101101
127127
GNP per cap~ PPP GNP per cap~ PPP $3000$3000
Sri LankaSri Lanka
IndonesiaIndonesia
0.7350.735
0.6770.6778181
102102
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Population and Labor ForcePopulation and Labor Force
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Composition of World Exports (percentages Composition of World Exports (percentages of primary and manufactured products)of primary and manufactured products)
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Composition of World Exports (percentages Composition of World Exports (percentages of primary and manufactured products)of primary and manufactured products)
Markets are imperfect in developing countries due to: Economies of scale Thin markets for many products due to
limited
demand Widespread externalities (good and bad) Prevalence of common property resources Incomplete information Information is costly to obtain