Economic Development
Definition of development
This refers to the improvements in people’s quality of life.
Indices of the Measure of Development
a) GNP (Gross National Product)
This is the total value of goods and services produced by a country in a year, plus income
earned by the country’s residents from foreign investments.
9The country’s total GNP can be divided by the country’s total population to give us what is
called Per Capita GNP.
NB: Per capita means per person.
Example
Qatar = $88 046 GNP
Zimbabwe = $2500
Unfortunately, GNP figures are just averaging, they don’t tell us how the government
spends that money.
b) Literacy Rate
Literacy is the process of acquiring knowledge through training and skills.
Adult literacy is critical because adults are the ones that drive a country’s economy;
therefore, a country with a low adult literacy rate is unable to develop well.
Female literacy is even more critical for a country because when girls are educated, the
world becomes educated.
c) Life Expectancy
This is viewed as a very important measure of development as it is to a large extent the result of
all the factors contributing to the quality of life in a country.
It is important for international and national government agencies to know about variations in
life expectancy as this is a key measure of inequality.
It helps development programmes to target those most in need. The main influences on life
expectancy are:
i) The incidence of disease (for example malaria).
ii) Physical environment condition (for example rainfall).
iii) Human environmental conditions (for example pollution).
iv) Personal lifestyle (for example smoking).
Rates of life expectancy have converged significantly between rich and poor countries during
the 50 years, despite a widening wealth gap.
d) Infant Mortality
The infant mortality rate is one of the most sensitive indicators of socio-economic development
progress.
Infant mortality rates have fallen sharply in more developing countries over the last 20 years.
The infant mortality rate of Africa is more than thirteen times than that of Europe.
Other Indicators of Development
e) School Enrolment- The number of students enrolled in schools, primary, secondary, and tertiary
institutions that determine a country's development level.
f) Doctor per 100 000 people – if the doctors are more it means the country is developed and if less it
means it is developing.
g) Food Intake – if they take more food, it means the country is developed but if a population fails to
reach the required intakes per day then the country is developing.
h) Energy Consumption per capita – means more energy is consumed per capita. There is more
advanced machinery and technology, making it developed, but if the consumption is low, it means
the country is developing.
i) The percentage of the population living in rural areas also determines the level of development; the
higher the percentage of urbanisation, the higher the level of development.
j) Number of motor vehicles per 1000 people. If the number of motor vehicles per 1000 people is
high, the country is developed as most people can afford cars, but if the number is low, the country
is developing as few people can afford cars.
k) Human Development Index
The Human Development Index (HDI) is a statistical composite index of life
expectancy, education (literacy rate, gross enrolment ratio at different levels and net attendance
ratio), and per capita income indicators, which are used to rank countries into four tiers of human
development. A country scores a higher HDI when the lifespan is higher, the education level is
higher, and the gross national income GNI (PPP) per capita is higher
Stages of Development in a country
Least Developed à Developing à Newly Industrialised à Developed.
a) Least Developed Countries
Characteristics of the Least developed countries
These are the poorest countries in the world.
They face major economic problems throughout their history such as huge debts.
They also have major human resource problems in as far as skills levels, both in terms of
quality and quantity.
They also have several physical geographic problems which limit development e.g.:
Poor rainfall which makes it difficult to practise agriculture to provide enough food
for the country.
Very mountainous which makes it difficult to construct infrastructure and develop
roads.
Very high rainfall (tropical) which limits work and hence development due to the
difficulties of clearing land and laying of infrastructure.
They are vulnerable to natural hazards such as earthquakes, hurricanes, volcanoes,
and drought.
Examples of such countries include Somalia, Haiti, Niger, and Gambia.
b) Developing Countries
Characteristics
Their economies are mainly dominated by the primary sector i.e., farming, mining, fishing
and lumbering.
Their secondary activities are based on low value (lack of value addition and/or
improvement) i.e., textile industries and simple mineral processes.
Fewer numbers of their people have the requisite skills and technology to power the
development.
Religious beliefs, cultural practices and political problems of the countries tend to affect the
economic development.
They have poor infrastructure in terms damaged roads, non-functional rail systems or their
rail system is still powered by diesel engines.
Relatively low levels of urbanisation with most of the people living in the rural areas where
services are poor.
High unemployment rates because the number of jobs available is lower than the number of
job seekers.
Examples of such countries include Zimbabwe, Zambia
c) Newly Industrialised Countries
Characteristics
These countries have undergone rapid industrialisation since the 1960s due to:
Well-developed infrastructure in terms well tarred roads, two to three ways, and a well-
developed and reliable rail system.
The labour is highly skilled but cheaper and has a strong desire for acquiring more
education and enhancing their skills.
The government cultivates policies that are favourable and accept direct foreign investment
such as allowing for the repatriation of profits.
Availability of cheaper bank loans that allows local companies to borrow at low interest
rates.
The More Developed countries in this group include, Singapore, South Korea, Taiwan, Hong
Kong. These have geographical advantages as far as location is concerned.
i) Access to the sea which allows them to trade cheaply.
ii) Temperate climate which is wetter for efficient agricultural practices.
iii) Access to petroleum in their territories and so are self-sufficient in
hydrocarbons.
iv) More natural resources such as mineral deposits, fertile soils.
The least developed among these countries are Malaysia, China, India, Brazil
This is because they have:
i) Fewer to non-oil reserves in their own territories and so they have to
import hydrocarbons.
ii) Tropical climate which inhibits development because of too much
rainfall or high incidences of drought.
iii) Few mineral deposits in their territories which implies that they must
import some minerals.
iv) Are landlocked and therefore face major problems in trading with
other countries.
d) Developed Countries
Characteristics
1. Has a high income per capita. Developed countries have high per capita incomes each year.
By having a high income per capita, the country’s economic value will be boosted. Therefore,
the amount of poverty can be overcome.
2. Security Is Guaranteed. The level of security of developed countries is more secure
compared to developing countries. This is also a side effect of sophisticated technology in
developed countries. With sophisticated technology, security facilities and weapons technology
also develop for the better.
3. Guaranteed Health. In addition to ensuring security, health in a developed country is also
guaranteed. This is characterized by a variety of adequate health facilities, such as hospitals and
medical staff who are trained and reliable. Therefore, mortality rates in developed countries can
be suppressed and the life expectancy of the population can be high. In addition, with adequate
health facilities, population development in developed countries can also be controlled.
4. Low unemployment rate. In developed countries, the unemployment rate is relatively small
because every citizen can get a job.
5. Mastering Science and Technology. The inhabitants of developed countries tend to have
mastered science and technology from which new useful products such as the industrial
pendant lights were introduced to the market. Therefore, in their daily lives, they have also
used sophisticated technology and modern tools to facilitate their daily lives.
6. The level of exports is higher than imports. The level of exports in developed countries is
higher than the level of imports because of the superior human resources and technology
possessed.
Examples of developed countries include the United States, Germany, and Japan.
Reasons for differences in development
a) Physical Geography Influence
1. Landlocked countries develop slowly compared to those with access to the sea because
we endure huge expenses when paying for the use of other countries’ ports.
Countries with a sea get the chance to exploit seabed petroleum.
It is difficult to trade with other countries.
2. Tropical countries experiencing equatorial climates face. challenges in food production
since some crops do not grow well in heavy rainfall. Also, the soils are very poor due to
the quick absorption of water by the roots and high rates of leaching.
3. Other tropical countries have unreliable rainfall where, is some years, there are
droughts (the savanna & semi-arid countries).
4. Also, countries that have lots of natural resources have better economies compared to
those that have little resources.
b) Influence of Economic Policies
More developed countries have these Less developed countries have these
following policies. following policies.
Cultivate policies which make it easy for Strict on expatriation of profits, companies
foreigners to bring in capital (DFI) e.g., offer are compelled to use local banks.
expatriation of profits.
Low corporate tax regime to allow companies High corporate tax regime that suffocates
to plough back into their growth. private companies
Cheaper labour which asks for reasonable More expensive labour that ask for
wages and not extortionist demands. unsustainable pay demands.
Un-unionised labour that provides employers Unionised labour that fights for the rights of
to hire and fire at will. workers much to the detriment of the
company
Limited environmental laws that keep a blind Strong environmental laws that punish
eye on pollution for the sake of employment polluting companies, majority of which
creation. become dissatisfied and migrate to
elsewhere
Rule of law and order; low levels of crime Rule of law is lacking (lawless). High rates of
because of an efficient justice system. unsolved crime. Several cases of unsolved
corruption.
Political stability and a general freedom of Political violence. Poor governance (unstable
speech and democratic principles are upheld. politically)
Respect for “property rights” with a No respects for ‘’property rights’’ as seen by
supportive justice system rampant seizure of private properties
c) Influence of demography
For the developed countries experience Low Birth Rate that does not put pressure to
health systems in terms pre- and post-natal care. The countries are underpopulated –
(enough water resources, enough jobs, enough schools for the prevailing population)
For the poorer countries, they experience High Birth Rates that put a heavy burden on
the health delivery systems in terms of provision of pre- and post-natal care. Besides the
countries are overpopulated – i.e. struggle to provide water, high levels of youth
unemployment, not enough schools to accommodate all children.
Differences in development within a country
The differences in development within a country is explained by the Core-Periphery theory that was coined
by Myrdal. The theory highlights the inequality in levels of development between core and periphery.
The core region is spatially a small area, but it has highly developed infrastructure [such as running water,
transport services, health facilities and educational facilities]. The core has. Population and cultural
diversity are usually high in the core region. Politically, the core region is very powerful. Political decision-
makers normally stay in the core region.
Core Periphery
Core has higher concentration of people and wealth than periphery.
Higher Standard of Living Lower Standard of Living
Good infrastructure – schools, hospitals, Limited services; poor infrastructure; lack
shopping centres, good housing, good of access to clean piped water
transport system.
More employment opportunities in the Fewer job opportunities outside the farm
manufacturing and tertiary sectors areas
Better access to cleaner water (boreholes, Open water sources e.g., well, rivers that
city council treated water). are sometimes contaminated with
diseases.
Access to fast internet service such as 3G – Either internet services are absent, or the
4G. speed is very slow.
Several centres of tertiary education. Have mostly lower education level in the
form of primary + secondary.
Higher life expectancy because there are Lower life expectancy because they are
more doctors fewer doctors.
More people are employed in tertiary Mostly agricultural activities and
sector extraction of raw materials (primary
sector)
High capacity for innovation and change, The periphery is the recipient of the
ie, they are the centres that come up with innovation that comes from the core
new technologies
Causes of the Inequalities in countries
Core – Periphery Model
1. Stage 1 à The area which is going to grow to become a core has initial advantages over
other areas such as.
Existence of a mineral conditions as in the case of the gold deposits near the then
Salisbury (Harare).
Favourable climatic conditions such as the high rainfall and cool weather in
andaround Harare.
Favourable port conditions such as the natural deep harbour facilities at Walvis Bay
in Namibia.
Favourable meeting places of traditional transport routes especially in the Sahara
Desert which led to the development of Timbuktu in West Africa.
Political choice e.g., by the colonialists who choose a space place for example the
Pioneer Column avoided Bulawayo to settle in Harare due to war like character of
the Lobengula warriors.
2. Stage 2 à Industrial development begins at the “core” and this begins to widen the
inequalities between the core and the periphery.
Raw materials such as minerals, wood & agricultural crops begin to move
from the periphery to the core to promote industrial development.
Human Labour becomes attracted to employment opportunities offered by
the core and there began rural-urban migration.
3. Stage 3 à Peripheral areas begin to enjoy the spread effects/trickle down effects and
their wealth begins to increase.
Causes of the spread down effects to the periphery.
1. Cost of land may increase in the core prompting industrialist to look for
alternative cheaper land.
2. Too much competition could drive manufacturers out of the core.
3. Companies also move to access cheaper labour in the periphery.
4. Increase in demand for products in the periphery in may prompt
manufacturers to locate in the periphery.
5. Increase in environmental pollution, congestion and crime may push the
businesspeople out the core and establish in the periphery.
6. Discovery of some resources in the periphery may also prompt their
development.
Ways of Reducing Regional Inequalities
Building more schools and providing the required equipment e.g., computers,
internet services.
Decentralisation of government services to periphery areas e.g., Register General
Office, High order health referral centres, International air services, Foreign diplomat
offices into smaller towns.
Implementing the growth pole model i.e., identifying potential areas for growth in
the periphery and then promote their growth through financial assistance cheaper
eg Bhora, Murombedzi, Murambinda etc.
Rural electrification programmes to provide the people in the rural areas with power
so that economic projects can be carried.
Devolution of power where local governments are given autonomy to run their own
affairs, as is the case with South Africa.