Key Issue 1 Why Does Development Vary Among Countries? Chapter 9 Development Key Issue 1 Why Does Development Vary Among Countries?

Economic Indicators of Development The United Nations Human Development Index (HDI) identifies gross domestic product per capita (GDP) as its economic indicator of development. Other economic indicators that help to distinguish between levels of development include economic structure, worker productivity, access to raw materials, and availability of consumer goods. GDP is the value of all goods and services produced in a country, usually in a year.

Types of Jobs The percentage of workers in the different sectors of the economy will help to show the level of development of a country. Workers in the primary sector of the economy extract materials from the Earth, usually through agriculture. This sector of the economy still employs the highest percentage of workers in LDCs whereas in MDCs it is a very low percentage. The secondary sector is the industrial sector of the economy, and the tertiary sector is the service sector of the economy.

Productivity Productivity is the value of a particular product compared to the amount of labor needed to make it. It can be measured by the value added per worker, which in manufacturing is the gross value of the product minus the costs of raw materials and energy. Productivity is much higher in MDCs because of higher technology and capital intensive industries. Production in LDCs is still very labor intensive.

Raw Materials Development requires access to raw materials, although some developed countries such as Japan, Singapore, and Switzerland lack significant resources; some developing countries such as those in Sub-Saharan Africa have significant raw materials. Development also requires energy to fuel industry and transform raw materials into finished products.

Consumer Goods Countries that produce more quality nonessential consumer goods are able to promote expansion of industry and the generation of additional wealth. Consumer goods such as automobiles, telephones, and televisions are very accessible to many people in MDCs but only to the few who are wealthy in LDCs.

Social Indicators of Development Education and health are key social indicators of development. High levels of development are associated with high levels of education. The quality of education is typically measured by student/teacher ratio and literacy rates. The literacy rate is the percentage of a country’s population who can read and write. Literacy rates in MDCs usually exceed 98%, whereas many LDCs have rates that are below 60%. There are also huge differences between literacy rates for men and women in developing countries. People are also healthier in more developed countries because they have better nutrition and access to health care.

Demographic Indicators of Development The U.N.’s HDI includes life expectancy as a measure of development. Other demographic indicators include infant mortality, natural increase, and crude birthrates. Life expectancy is a measure of health and welfare; some developed countries have life expectancies that are twice as high as developing countries. Infant mortality rates speak to levels of health care in a country. Rates of natural increase are much higher in LDCs and force them to allocate increasing percentages of their GDPs to care for a rapidly expanding population. Developing countries have higher rates of natural increase because they have higher crude birthrates. One has to be careful when looking at crude death rates to help measure levels of development for two reasons. Firstly, the diffusion of medical technology from MDCs to LDCs has reduced death rates in less developed countries. Secondly the high crude death rates of some MDCs are a reflection of their higher percentages of elderly and lower percentages of children.