Common Characteristics of Developing Countries

Some of the characteristics of developing countries are manifested in the form of low income, inadequate housing, poor health and inadequate or non existent public services. Developing countries also have low labor productivity because of the lack of complementary factors, such as capital and experienced management, to raise it. Most developing countries have very high population rates too, with high birth rates and declining death rates. They also have a shorter life expectancy than developed countries, which translates to a smaller percentage of the population being available for labor.

There exists a lot of diversity amongst the developing nations. Perhaps, it will be difficult to generalize such differentiated countries. However, we try to elaborate the common features of these poor nations. For the sake of convenience, we classify them into six main categories.

1. LOW LEVELS OF LIVING ACCOMPANIED BY LOW INCOMES, HIGH INEQUALITY, POOR HEALTH AND INADEQUATE EDUCATION

The developing countries are characterised with low living levels. Not only the majority of the population of UDCs is poorer as compared with their western counter-parts, but they are also wretched financially in comparison with their own small elites living in big towns and cities etc. These low levels of living can be observed both quantitatively as well as qualitatively in the form of low incomes, inadequate housing facilities, poor healtIi, limited or no education, high infant mortality rates (IMR), low life and work expectancy, and a general sense of malaise and hopelessness. Now we discuss certain statistics regarding GNP per capita, growth of GNP and GNP per capita, extent of poverty, state of health and education services both in tile poor and the rich countries.

(1) Per Capita GNP. The GNP and GNP per capita criteria are employed to measure the economic well being of the nations. The GNP and GNP per capita are employed to make

a comparison between state of richness or state of poverty of the nations. In 2000, the total world production was estimated at more than $ 31 trillion, out of it $ 25 trillion came from DCs while $ 6 trillion came from UDCs. It means that 80 % of World’s income had been

produced by the rich countries of the World where 15 % of World’s population resides. Whereas 85% of World’s population is producing just 20 A of World’s output.

According to World Development Report 2000 the per capita GNP of Switzerland was $ 44320 (using official exchange rate), while it was $ 37850 in case of Japan and it was $ 29340 in case of US. On the other side, in case of India it was $ 430, in case of Pakistan it was $ 480, in case of Bangla Desh it was $ 200 and it was $ 100 in case of Ethiopia. It is obvious that Switzerland’s per capita income is 400 time more than per capita income of Ethiopia, and is 95 times more than that of India. In the year 2006-07, the GNP per capita income of Pakistan was $ 925, while it was $1025 in the year 2007-08.

Above all, it has also been estimated that collective per capita incomes of UDCs average less than one—twentieth the per capita incomes of rich nations. Now-a-days, the conversion of purchasing power parity (PPP) method is followed to represent per capita GNP rather conversion into exchange rates ( $ ). It means, here it is compared the value of a good in Rs. in Pakistan and the value of the same good in $ in US. Thus the ratio of rupee value and dollar value is given the name of purchasing power parity. Thus according to WDR ( 2002) in the year 2000, on the basis of PPP the per capita GNP of US was $ 34260 of India it was $2310, of Pakistan it was $490 on official exchange rate while it was $1590 on PPP. On the basis of PPP the difference between US and Ethiopia GNP per capita was 56 times while it was 400 times on official exchange rate.

(2) Relative Growth Rates Of GNP And GNP Per Capita. In case of Third World countries not only the levels of per capita income are lower, but their growth rates of GNP and GNP per capita are also slower as compared with the DCs. It has been observed by World Bank that the growth rate of all UDCs slowed down considerably during 1980′s. Accordingly, real per capita GDP actually declined by 0.2 % in 1990 and again in 1991. Though the Asian countries continued growing at a slower rate during 1980s, but the growth rate in Latin American and the Caribbean countries was negative. As in India the growth rate of real GNP per capita was 3.2 % and it was 2.4 % in Sri Lanka. While it was — 3% in Nigeria and —2 % in Venezuela. Thus 1980s was a ‘Lost Decade’ for development of ,UDCs. During 1980s, there was a marvellous growth in East Asian countries, but it decreased in 1990s due to financial crisis. In this way, during 1980s and in early 1990s the ‘Income Gap’ between the rich and poor nations widened at the fastest pace as compared with the three last decades. Again, if a comparison is made between the richest 20 % of World’s population with the poorest 40 % we find that this ratio 30 to 1 in 1960. But at the end of 1980s the richest were receiving almost 70 times the income of the poor. In 2009-09 the growth rate of Pakistan was 3.5%.

(3) Distribution Of National Income. Not only the gap between the incomes of the poor and the rich countries is increasing, but the gap is also growing between the rich and the poor within the individual LDCs.

All the nations of the World show some degree of income inequality. There are large disparities between incomes of the rich and poor in both DCs and UDCs. However, the gap between rich and poor is greater in UDCs than DCs. The share of the richest 20 % was

 DEVELOPING COUNTRIES AND THEIR FEATURES

70.2 % in 1960 which went to 82.7 % in 1989. While the share of the poorest 20 % of the World was 2.3 % in 1960 which decreased to 1.4 % in 1989.

As far as inequalities at individual countries are concerned following statistic is given. In Jamica the poorest 20 % of the population obtain only 2.2 % of national income whereas the highest 20 % obtain about 62 % of such income. In Iraq, Gabon and Columbia, the share of the poorest 20% and the richest 20% in GNP is 2% and 68%, 2% and 71%, 2.2% and 68.1 % respectively. Such heavy inequalities have also been observed in case of Columbia, Mexico, Venezuela, Kenya, Sierra Leone, South Africa and Guatemala. While in case of India, Tanzania, Chile, Malaysia, Cost Rica and Libya have moderate inequality. Whereas the countries like Taiwan, South Korea, Sri Lanka and Indonesia have relatively lesser inequalities in over all income distribution. As According to WB report, 1998 Gini-Co efficients were stood at 0.28, 0.58 and 0.59 and 0.60 respectively for Bangla Desh, Kenya, Paraguay and Brazil in 1990s.

Moreover, there exists no correlation between levels of per capita income and degree of income inequality. Kenya has as low income as compared to India, but the disparity between top 20 % and bottom 40 % is greater in Kenya as compared with India. Again the per capita GNP of Kuwait is as higher as of Belgium, but a lower percentage of its income is being distributed to bottom 40 % of its population. All this shows that economic development cannot be just measured on the basis of growth of overall income or income per capita, the distribution of income among the population must also be considered —that is who has benefited from development.

(4) Extent Of Poverty. During the 1970s the problem of poverty got a lot of attention, i.e., how the extent of the poverty should be measured within and across the countries. Accordingly, in this respect, the concept of ‘Absolute Poverty’ is used. It is meant to represent a specific minimum level of income needed to satisfy the basic needs of foods, clothing, and shelter in order to ensure continued survival. (Though they may change from country to country). In this respect, ‘International Poverty Line” has been established, say at $ 370 (on the value of the 1985 dollar) and then the “Purchasing Power Equivalent” of that sum of money in terms of a developing country’s own currency.

The extent of absolute poverty (the proportion of a country’s population with real income below international poverty line) in 1998 was as: Almost 1.2 billion people or 24 % of the World population was living in absolute poverty, out of them 800 million were from Asia, 290, million from Sub-Saharan Africa, 78 million in Latin America and 5.5 million in North Africa and Middle East. In Pakistan (according to HDR 1999) 40 million people lived below poverty, while in India they were 509 million and in Bangla Desh they were 95 million, while according to WB report 1998, 509 million people were poor in India, out of 970 million in 1997. The poverty ratio was 30% in Pakistan in the year 2005 and 25% in 2006. While it was 24 % in 2007, it was 23.9% in 2008 and it was 23 % in 2009.

(5) Health. The Third World countries not only have low per capita incomes but they also have to fight a battle against malnutrition, diseases and ill-health etc. The life expectancy in LLDCs was averaged at only 48 years, while it was 63 years in case of other Third World countries, and 75 years in developed nations. ‘Infant Mortality Rates’ (the number of children who die before their first birthday out of every 1000 live births) averaged about 96 in least developed countries and it was 11 in developed countries. According to World Development Report 2003, IMR was 150 in Afghanistan, it was 95.3 in

 DEVELOPMENT ECONOMICS

Pakistan, it was 72.5 in India, it was 62 in Kenya it was 21 in Venezuela, it was 4 in Japan and it was 7 in US. In the mid-1970s more than 1 billion people (1/2 population of UDCs) were living on diets deficient in essential calories. 1/3 of them were children under 2 years of age. In the 1980s and early 1990s, the situation worsened very much in Sub-Saharan Africa due to deep declines in consumption and wide spread famine. Both in Asia and Africa, over 60 % of the population barely met the minimum caloric requirements necessary to maintain adequate health. Moreover, it has been estimated that this calorie deficit amounted to less than 2 % of the World cereal production. This contradicts this view that the malnutrition is the inevitable result of an imbalance between World population and World food supplies. Rather, it can be attributed to imbalance in World income distribution. Thus the malnutrition and poor health in UDCs are due to poverty, than due to food production. Again the World Development Report (WDR) 2001 gives the following information. In UDCs, 776 million people were without access to health services, 968 million did not have access to safe drinking water, 2.4 billion lived without sanitation facilities, the 14 million children before the age of 5 and 163 million children under age 5 were malnourished. The malnutrition can also be measured by per capita daily protein consumption which was 97 grams in US and just 43 grams in India. In DCs the average annual consumption per person was about 670 Kg while it was 185 Kg in UDCs. The life expectancy in Pakistan in 2005 was 64 years, in India 63 and in Sri Lanka it was 71.2 years. The unsafe drinking water has led to promote the typhoid fever, cholera, Jaundice and diarrheal diseases which are responsible for more than 35 % of the death of young children in Africa, Asia and Latin America. In 1998, the infant mortality rate in Zambia was 109 per 1000, while in Srilanka it was just 17 and in Bangla Desh it was 82 per 10000.

The situation of medical carer is extremely poor. As in 1995, the number of doctors per 100000 people averaged only 4.4 in the LLDCs, compared with 217 in DCs. Again, most of medical facilities in UDCs are concentrated in urban areas where only 25 % population resides. As in India 80 % of doctors practice in urban areas where just 20 % of population resides. In Kenya, the population — to physician ratio is 672 to 1 for the capital city Nairobi, arid 20,000 to 1 in the rural areas where there lives 87 % of Kenyan population.

(6) Education.  The low levels of living in UDCs are also attributed to the poor educational facilities in UDCs. Despite heavy expenditures on education and quantitative advances in school enrolments, literacy levels remain strikingly low in UDCs as compared with DCs. For example, in the LLDCs the literacy rates average only 45 % of the population. \ However, the corresponding rates for other Third World Nation and DCs are approximately 64 % and 99 % respectively. While in case of Pakistan, the literacy rate was 54% while our opulation was above 162 million in 2008. On the other hand, in case of India the literacy rate was 49.8 % while its population was more than 1000 million. This shows very poor performance of our economy in the field of literacy. According to WDR 1994, the enrolment ratios for the levels (6-23 years) was 24 % in Pakistan, 50 % in India, 32 % in Bangla Desh and 68 % in Sri Lanka. It had been estimated that more than 325 million children had dropped out of primary and secondarl school, and of the estimated 854 million illiterate adults more than 60 % were women-. The education of children who do attend school regularly is often ill-suited and irrelevant to the development needs-of the nation. According to WDR (2007) Pakistan spent 1.6% of GDP on education. While DCs including China spent

6% of GDP on education.

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