ECONOMIC DEVELOPMENT

DEFINING THE DEVELOPING WORLDECONOMIC DEVELOPMENT1This is a classification of all the member countries of the World Bank and other economies with populations more than 30,000. The groups made are as follows: 2WORLD BANK CLASSIFICATION SYSTEMLIC OR LOW INCOME LMC OR LOW MIDDLE INCOMEUMC OR UPPER-MIDDLE INCOMEHIGH INCOME OECDHIGH INCOME COUNTRIES3Lower Income Economies (with $825 or less) Lower Middle Income Economies (With $826-3,255) Upper Middle Income Economies (With $3,256-10,065) and High Income Economies (With $10,066 or More)

4YET ANOTHER WAY TO CLASSIFY THE DEVELOPING WORLD IS THROUGH THE DEGREE OF THEIR INDEBTEDNESS; 5THE WORLD BANK CLASSIFIES COUNTRIES ASSEVERELY INDEBTEDMODERATELY INDEBTEDAND LESS INDEBTED6FINALLY THE UNDP CLASSIFIES COUNTRIES ACCORDING TO THEIR LEVEL OF HUMAN DEVELOPMENT (HDI), INCLUDING HEALTH AND EDUCATIONAL ATTAINMENTS. 7THE SIMPLE DIVISION OF THE WORLDDEVELOPED COUNTRY- countries that have a high level of development.

DEVELOPING COUNTRY- nation with a low level of material well being.

8HOWEVER.There is no single internationally-recognized definition of developed country, and the levels of development may vary widely within so-called developing countries, with some developing countries having high average standards of living.9

STRUCTURAL DIVERSITY OF DEVELOPING COUNTRIES1. Size and income level2. Historical background3. Physical and human resources4. Ethnic and religious composition5. Relative importance of public and private sectors6. Industrial structure7. External Dependence

101. Size and income level

The sheer size of a country, the size of its population, its level of national per capita are important determinants of its economic potential and major factors differentiating one developing nation from another.11LARGE SIZE USUALLY PRESENTS ADVANTAGES OF 1.DIVERSE RESOURCE ENDOWMENT, LARGE POTENTIAL MARKETS AND LESSER DEPENDENCE ON FOREIGN SOURCES OF MATERIALS AND PRODUCTS12FOR EXAMPLEINDIASINGAPORE1,016 MILLION- POP.$460 PER CAPITA INCOME LEVEL4 MILLION- POP.$24,740 PER CAPITA INCOME13HISTORICAL BACKGROUNDTHE ECONOMIC STRUCTURES OF SOME NATIONS, AS WELL AS THEIR EDUCATIONAL AND SOCIAL INSTITUTIONS HAVE TYPICALLY MODELED ON THOSE OF THEIR FORMER COLONIAL RULERS.14PHYSICAL AND HUMAN RESOURCESA countrys potential for economic growth is greatly influenced by its endowments of physical and human resources.15ETHNIC AND RELIGIOUS COMPOSITIONETHNICITY AND RELIGION OFTEN PLAY A MAJOR ROLE IN THE SUCCESS OOR FAILURE OF DEVELOPMENT EFFORTS.16RELATIVE IMPORTANCE OF PUBLIC AND PRIVATE SECTORSMost developing countries have mixed economic systems, featuring both public and private ownership of the use of resources.17INDUSTRIAL STRUCTUREThough rapidly urbanizing, the majority of developing countries are agrarian in economic, social, and cultural outlook.18External Dependence: Economic, Political, and CulturalThe degree to which a country is dependent on foreign economic, social, and political forces is related to its size, resource endowment, and political history.19Political Structure, Power, and Interests groupsIn the final analysis, it is often not the correctness of economic policies alone that determines the outcome of national approaches to critical development problems.20COMMON CHARACTERISTICS OF DEVELOPING NATIONS1. Low levels of living2. Low levels of productivity3. High rates of population growth and dependency burdens4. Substantial dependence on agricultural production and primary exports5. Prevalence of imperfect markets or simply missing markets.21