DEFINING THE DEVELOPING WORLD ECONOMIC DEVELOPMENT

This is a classification of all the member countries of the World Bank and other economies with populations more than 30,000. The groups made are as follows:

WORLD BANK CLASSIFICATION SYSTEM LIC OR LOW INCOME LMC OR LOW MIDDLE INCOME UMC OR UPPER-MIDDLE INCOME HIGH INCOME OECD HIGH INCOME COUNTRIES

Lower Income Economies (with $825 or less) Lower Middle Income Economies (With $826-3,255) Upper Middle Income Economies (With $3,256-10,065) and High Income Economies (With $10,066 or More)

YET ANOTHER WAY TO CLASSIFY THE DEVELOPING WORLD IS THROUGH THE DEGREE OF THEIR INDEBTEDNESS;

THE WORLD BANK CLASSIFIES COUNTRIES AS… SEVERELY INDEBTED MODERATELY INDEBTED AND LESS INDEBTED

FINALLY THE UNDP CLASSIFIES COUNTRIES ACCORDING TO THEIR LEVEL OF HUMAN DEVELOPMENT (HDI), INCLUDING HEALTH AND EDUCATIONAL ATTAINMENTS.

THE SIMPLE DIVISION OF THE WORLD DEVELOPED COUNTRY- countries that have a high level of development. DEVELOPING COUNTRY- nation with a low level of material well being.

HOWEVER…. There is no single internationally-recognized definition of developed country, and the levels of development may vary widely within so-called developing countries, with some developing countries having high average standards of living.

STRUCTURAL DIVERSITY OF DEVELOPING COUNTRIES 1. Size and income level 2. Historical background 3. Physical and human resources 4. Ethnic and religious composition 5. Relative importance of public and private sectors 6. Industrial structure 7. External Dependence

1. Size and income level The sheer size of a country, the size of its population, its level of national per capita are important determinants of its economic potential and major factors differentiating one developing nation from another.

LARGE SIZE USUALLY PRESENTS ADVANTAGES OF 1.DIVERSE RESOURCE ENDOWMENT, LARGE POTENTIAL MARKETS AND LESSER DEPENDENCE ON FOREIGN SOURCES OF MATERIALS AND PRODUCTS

FOR EXAMPLE INDIASINGAPORE 1,016 MILLION- POP. $460 PER CAPITA INCOME LEVEL 4 MILLION- POP. $24,740 PER CAPITA INCOME

HISTORICAL BACKGROUND THE ECONOMIC STRUCTURES OF SOME NATIONS, AS WELL AS THEIR EDUCATIONAL AND SOCIAL INSTITUTIONS HAVE TYPICALLY MODELED ON THOSE OF THEIR FORMER COLONIAL RULERS.

PHYSICAL AND HUMAN RESOURCES A country’s potential for economic growth is greatly influenced by its endowments of physical and human resources.

ETHNIC AND RELIGIOUS COMPOSITION ETHNICITY AND RELIGION OFTEN PLAY A MAJOR ROLE IN THE SUCCESS OOR FAILURE OF DEVELOPMENT EFFORTS.

RELATIVE IMPORTANCE OF PUBLIC AND PRIVATE SECTORS Most developing countries have mixed economic systems, featuring both public and private ownership of the use of resources.

INDUSTRIAL STRUCTURE Though rapidly urbanizing, the majority of developing countries are agrarian in economic, social, and cultural outlook.

External Dependence: Economic, Political, and Cultural The degree to which a country is dependent on foreign economic, social, and political forces is related to its size, resource endowment, and political history.

Political Structure, Power, and Interests groups In the final analysis, it is often not the correctness of economic policies alone that determines the outcome of national approaches to critical development problems.

COMMON CHARACTERISTICS OF DEVELOPING NATIONS 1. Low levels of living 2. Low levels of productivity 3. High rates of population growth and dependency burdens 4. Substantial dependence on agricultural production and primary exports 5. Prevalence of imperfect markets or simply “missing markets.”