GROWTH & DEVELOPMENT: SOME BASIC FACTS

Increase in Human
Occurrence GDP/GNP Development & Process
Quality of life

Natural & Deliberate &

Reversible Irreversible

Discontinuous & Continuous &

Spontaneous & gradual &
sometimes unplanned planned Process

Uni- Multi-
Dimensional dimensional

Can occur without Pre-requisite for

development LDCs & development
Developed
country problem Developing
Investment, Saving, K country problem Non-economic factors-
formation health care &
Education
 World
Alaska Greenland
Norway
Sweden Bank
Russia Statistics)
UK
Canada Finland Kazakhstan
France Switzerland Kyrgyzstan Mongolia
Luxembourg
Spain Turkey Uzbekistan
United States China Japan
Iran Afghanistan
Algeria Qatar
Mexico Libya Egypt Saudi Arabia Pakistan Bangladesh Myanmar
Hong Kong
Morocco India
Ethiopia Niger Oman
Chad Sudan Yemen Thailand
Venezuela Cambodia
Liberia Nigeria Cameroon Brunei
Somalia Malaysia Indonesia
Congo Burundi Singapore Timor Leste
Brazil Indonesia
Malawi
Bolivia Angola Mozambique Australia
Madagascar
Chile South Africa
Uruguay

New Zealand

Low Middle
Income
Income High Income Economies
Developing

Developed, Developing Countries & LDCs of the World

(World Bank, GDP Per Capita, PPP adjusted)

Jan 2023
 LDC Map
Low Economic Low level of
growth Education &
Health care
VICIOUS CIRCLE OF POVERTY

Low Income Low levels of

Low
Investment capital

Low
Low Savings
Productivity
Why is US a rich country?
The Great Divergence

Great Depression

Industrial Revolution
GROWTH MIRACLES & DISASTERS

Why Does Higher GDP Matter?

• More goods available

• Greater Income & More leisure
• Better Standard of living
• Better health facilities
• Infrastructure
• Life expectancy
• Democracy
• Stronger property rights
Korean • Greater women rights & freedom
WW II
War
• Better Institutions
• Lesser Crime
GROWTH MIRACLE: JAPAN’S RISE
GROWTH DISASTER: ARGENTINA’S COLLAPSE
GUNS, GERMS, AND STEEL: THE FATES OF HUMAN
SOCIETIES BY JARED DIAMOND (1997)
LIST OF RICH COUNTRIES FACTORS AFFECTING GROWTH

• United Arab Emirates • Historical Evolution

• Egypt • Location & Geography
• Qatar
• Natural Resources
• Saudi Arabia
• India • Population & Demographics

• China • Industrial & Agricultural Development

• Thailand
• Trade & Transport
• Japan
• Brazil • Health & well being

• Singapore • Cultural factors

• Germany
• Form of Government & Political Stability
• US •
• Economic & political Institutions
• UK
• Canada • Public Policy for Development
 REASONS WHY RICH COUNTRIES ARE RICH?
• Physical Factors
• Climate
• Natural Hazards
• Mozambique has suffered serious flooding in recent years.
• The Philippines has been devastated by Typhoon Haiyan.
• Pakistan and Haiti have been affected by massive earthquakes.
• Ethiopia is currently affected by drought.
• Other factors
• Areas lacking in mineral resources (eg coal, diamonds, oil) and areas with poor soils or poor drainage will remain less
developed. Countries like Saudi Arabia and Kuwait have vast oil reserves to export.
• Oil is in great demand, so can be sold for a huge profit giving them a high GDP. Factors such as war, however, can prevent
a country from developing. Iraq is not allowed to reap the benefits of its oil reserves due to conflict.
• Areas that are naturally linked to endemic disease will also struggle to develop. Many countries in Africa have suffered a
development setback due to Aids and malaria.
• Human factors
• Population
• High population growth will generally limit development, since resources such as food, space, and water will have to be
spread more thinly. There will not be enough jobs, houses, schools or health clinics to serve the population.
• Economy
• There may be a low level of industrialisation with few factories and offices. Some people believe that it is commerce and
industry that generate the wealth for development. Jobs in these areas tend to be well paid and provide security.
• Developing countries tend to have more jobs in the primary sector, with low levels of trade and often under the influence of
multinational companies. The resulting profits often go abroad and tend not to be reinvested in the country.
• Many developing countries are burdened with debt repayments. They may suffer from barriers to trade, such as tariffs and
quotas imposed by developed countries.
• China is an Newly Industrialised Country (NIC), with rapidly developing industry. Many multinational companies are
investing there.
• Singapore has the advantage of a natural harbour in a strategic position. This enables trading links to many other countries
to be established.
• Cheap labour and imported raw materials have also enabled it to develop its textile and shipbuilding industries. Singapore
is a ‘tiger economy’. This means it has experienced rapid economic growth, becoming successful very quickly.
• The original four Asian Tigers, or Asian Dragons, were Hong Kong, Singapore, South Korea and Taiwan. These regions
were the first NICs.
• They are known because they had very high growth rates (they become rich very fast) and fast industrialisation between the
early 1960s and 1990s.
• Other factors
• Political systems can affect development. For instance, some countries are ruled by dictators, such as Robert Mugabe in
Zimbabwe. Africa has more dictators than any other continent.
• Many African countries, such as Liberia, Sudan and Somalia have been plagued by civil war and this has impeded
development. Many of the civil wars in Africa have been caused by dictators, such as the conflict in Ethiopia, Sudan and
Ethopia
•few natural resources
•caught in the vicious circle of poverty
•based on subsistence agriculture with land degradation
•government lacking money and in debt ($10 billion)
•civil war and an unstable, corrupt government
•poor health with endemic disease - Aids/HIV holding back development
•low standards of housing, sanitation and education
•lack of industrial development
•suffers from flooding and drought

South Korea
•a government that is politically secure, stable and supportive
•naturally occurring resources
•wealth is based on industrial growth
•wealth is reinvested in housing, health, sanitation, and food
•large, flexible, low cost workforce. Labour force also well-educated and resourceful
•has powerful allies (USA)
•well located to export to the economically-strong Pacific Rim countries (USA, Japan, China)
•foreign investment attracted and multinationals keen to be involved
•population growth under contro
Similarities and Differences across Developing countries &
LDCs
Differences……. Similarities…….
Demography- High
Resource Endowment birth and low death
rates
Occupational &
Per capita Income
Production
levels
Structure
Structure of
Industry Primary goods exporters
Historical
Backgrounds Technology
Geographic and Dualism
Demographic Low levels of
backgrounds Physical and
Ethnic & Religious Human K
Break downs Formation
Political Structure- And………
totalitarianism, authoritarianism
& Democracy
 Strengths Weakness

Brazil

Opportunities Challenges
 Strengths Weakness

China

Opportunities Challenges
 Strengths Weakness

Russia

Opportunities Challenges
 Strengths Weakness

UK

Opportunities Challenges
 Strengths Weakness

Japan

Opportunities Challenges
 Strengths Weakness

USA

Opportunities Challenges
 Strengths Weakness

Germany

Opportunities Challenges
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