Countries may "graduate" out of the LDC classification when indicators exceed these criteria in two consecutive triennial reviews. The first country to graduate from LDC status was Botswana in
The Rich and the Poor pp. Industrially advanced countries IACs include the U. They have developed market economies based on large stocks of capital goods, advanced technologies, and a well-educated labor force.
They have a high per capita output, as seen in Figure Developing countries DVCs are unindustrialized nations heavily committed to agriculture. They have low rates of literacy, high unemployment, rapid population growth, and their exports are largely agricultural or raw materials.
Capital equipment is scarce, production technologies are primitive, and productivity is low. Dominating this group are India, China, and the sub-Saharan African nations.
Comparisons highlight income disparities. I find this information amazing!! General Motors had sales greater than the output value of all but 22 lower-income nations of the world.
The assets of the three wealthiest people in the world exceeded the combined GDPs of the 48 poorest nations. Growth, Decline, and Income Gaps 1. The absolute income gap between rich and poor nations has been widening. Human realities are difficult. Table highlights other socioeconomic differences.
Obstacles to Economic Development pp.
Natural resources must be used more efficiently and their supplies expanded. Resource distribution is very uneven as is evidenced by the wealth of the OPEC countries. Often ownership of natural resources is an issue if they belong to corporations in industrially advanced countries.
However, weak resource bases are not necessarily impossible to overcome, as Switzerland, Israel, and Japan have shown. Human resources in DVCs have three characteristics 1. Overpopulation is the rule. An annual population growth of approximately 1.
This compares to an average 0. It means that economic growth must be very rapid to make any gain on population; DVC per capita incomes are lagging behind the IACs see Table a.
Population growth accelerates with economic growth as better living conditions extend life. Birth rates remain high as medical care and sanitation cut infant mortality. Population growth hinders development because large families create obstacles to development.
They reduce the ability of households to save, more investment is required to keep up with increases in the labor force, an overuse of agricultural land may occur, and massive urban problems are generated.
Other reasons exist in explaining why expansion hinders development. Three additional points are worth noting. The relationship between population and economic growth is not as clear as it seems. Japan and Hong Kong are densely populated, but wealthy.
Did the wealth come before or after population growth rates declined? Population growth rates for the DVCs in general have declined in recent decades. The traditional view is that reduction in population growth leads to economic development.
But the "demographic transition" theory maintains that rising incomes lead to slower population growth. Children are viewed more as economic liabilities as the wealth of a country becomes greater.
Key Question 6 4.
High unemployment and underemployment are characteristics of DVCs with rates in the vicinity of 15 to 20 percent. This may become worse as rural populations migrate to cities in the hope of finding jobs that are not there.
Underemployment occurs when workers are employed less time than desired or at jobs that do not fully utilize their skills.ECONOMICS 1 ECONOMICS OF LESS DEVELOPED COUNTRIES John Strauss Spring A Kaprielian Hall Department of Economics Phone: University of Southern California.
Least developed countries (LDCs) are low-income countries confronting severe structural impediments to sustainable development.
They are highly vulnerable to economic and environmental shocks and. The least developed countries (LDCs) are a group of countries that have been classified by the UN as "least developed" in terms of their low gross national income (GNI), their weak human assets and their high degree of economic vulnerability.
The problems facing less developed countries are among the greatest challenges facing the world today.
This module will focus on the diverse structures and common characteristics of less developed countries and will offer an evaluation of policies being pursued. Economic development: Economic development, the process whereby simple, low-income national economies are transformed into modern industrial economies.
Although the term is sometimes used as a synonym for economic growth, generally it is employed to describe a change in a country’s economy involving qualitative as well.
Groups List of economies Economy Code Region Income group Lending category Other Afghanistan AFG South Asia Low income IDA HIPC Albania ALB Europe & Central Asia.