Economic Growth Pertemuan 2 Matakuliah: > Tahun: >

Bina Nusantara University 3 A society that is not socially just and does not intent to be puts it own future in danger. (Pope John Paul II, Brasil, 1980)

Bina Nusantara University 4 Material Outline Classifications of Developing Countries The Structural Diversity of Developing Countries Characteristics of Developing Nations Growth, Poverty, and Income Distribution

Bina Nusantara University 5 Some Classifications of Developing Countries United nations -Least developed -Non-oil exporting “developing nations” -Petroleum-rich members of the OPEC IBRD / World Bank -Low-income economics (per capita GNP less than $785 in 1997) -Middle-income ($786 to $3,125) -Upper-middle income ($3,126 to $9,655) -High-income economics (GNP per capita of $9,656 or more in 1997) United Nations Development Program (UNDP) Organization for Economic Cooperation and Development (OECD)

Bina Nusantara University 6 The Structural Diversity of Developing Economies Critical Components is the structural diversity of developing nations requires an examinations are: 1.The size of the country (geographic area, population, and income) 2.Its historical and colonial background 3.Its endowments of physical and human resources 4.Its ethnic and religious composition 5.The relative importance of its public and private sectors 6.The nature of its industrial structure 7.Its degree of dependence on external economic and political forces 8.The distribution of power and the institutional and political structure withnin the nation.

Bina Nusantara University 7 Characteristics of Developing Nations 1.Low levels of living, characterized by low incomes, inequality, poor health, and inadequate education 2.Low levels of productivity 3.High rates of population growth and dependency burdens 4.High and rising levels of unemployment and underemployment 5.Substantial dependence on agricultural production and primary-product exports 6.Prevalence of imperfectmarkets and limited information 7.Dominance, dependence, and vulnerability in international relations

Bina Nusantara University 8 Low levels of living Per-capita national income Relative growth Rates of National and per-capita income Distribution of National Income Extend of poverty Health Education

Bina Nusantara University 9 Growth, Poverty, and Income distribution Critical questions about the relationship between economic growth, income distribution and poverty: 1.What is the extent of relatif inequality in developing countries, and how is this related to the extent of absolute poverty? 2.Who are the poor, and what are their economic characteristics? 3. What determines the nature of economic growth– that is, who benefits? 4. Are rapid economic growth and more equitable distributions of income compatible or conflicting objectives for low-income countries? 5. What kinds of policies are required to reduce the magnitude and extent of absolute poverty?

Bina Nusantara University 10 Basic Concepts: Size and Functional Distributions of Income Size Distributions Lorentz Curves Gini Coefficient and Aggregate Measures of Inequality

Bina Nusantara University 11 Economic Characteristics of Poverty Groups Rural Poverty Woman and Poverty Ethnic Minorities, Indigenous, Populations and Poverty