1. Diverse Structures and Common Characteristics
Study of Developing Nations

2. Classification of Economies
World Bank classifies 208 economies (population=/> 30,000) based on gross national income per capita, 2000
LIC =/< $755
LMC =$756-$2995
UMC =$2996-$9265
High- income OECD =/>$9226
Other high-income countries
Different classification of other-high income countries

3. Classification of Economies
Gross National Income is the total final output of goods and services produced by the economy, plus net factor income from the rest of the world, minus sales taxes
Gross domestic product (GDP) + net factor payments = Gross national product (GNP)
GNP- sales taxes = Gross national income

5. Classification of Economies
East Asia and the Pacific:
Korea, Rep
China
Indonesia
UMC
LMC
LIC
Europe and Central Asia:
Czech Republic
Lithuania
Armenia
Latin America and the Caribbean:
Brazil
Cuba
Nicaragua

6. Classification of Economies
Middle East and North Africa:
Bahrain
Iraq
Yemen, Rep
UMC
LMC
LIC
South Asia:
Sri Lanka
India
Sub-Saharan Africa:
South Africa
Namibia
Ethiopia

7. Classification of Economies
High Income OECD:
Australia
Canada
USA
Japan
Denmark
France
Switzerland UK
Other high income countries:
The Bahamas
Kuwait
Hong Kong, China

8. Structural Diversity of Developing Economies
Size (geographical, population) and income of the country
Historical and colonial background
Physical and HR endowments
Ethnic and religious composition
Relative importance of public and private sectors
Nature of its industrial structure
Degree of dependence on external economic and political forces
Distribution of power, institutional and political structures

10. Structural Diversity of Developing Economies: Population and Income
Population (mill)
GNP per capita (USD)
Most Populous
1. China
2. India
3. USA
10. Japan
1,261
1,016
282
127
840
460
34,260
34,210
Least Populous
1. St Kitts-Nevis
2. Antigua and Barbuda
3. Dominica 41 68 73
6,660
9,190
3,260

11. Structural Diversity of Developing Economies: Industrial structure
Country
% of L Force
% of GDP
Agriculture
Industry
Nigeria 54 5 43 25
Bangladesh 64 14 30 18
Brazil 31 27 36
All Developing 60 17 20 38
USA 2 29

12. Structural Diversity of Developing Economies: Important observations
There is no necessary relation among a country’s size, per capita income, and degree of equality/ inequality
Colonialism exposed African and Asian countries to new forms of potential exploitation and have resulted in different institutional and social patterns
Except for the Persian Gulf oil states, most developing countries have minimal endowments of raw materials and minerals

13. Structural Diversity of Developing Economies: Important observations
Ethnic and religious conflicts have become frequent post cold war. Indigenous populations continue to be discriminated against in Latin American countries. Malaysia and Mauritius are exceptions
Most developing economies have mixed economic systems and the degree of corruption differs widely across countries
Majority of developing countries are agrarian and agriculture is a way of life for the people.

14. Structural Diversity of Developing Economies: Important observations
The various interest and power groups among different segments of the populations in a developing country is a result of their economic, social, and political history
Case Study of Brazil and Costa Rica

15. Common Characteristics of Developing Nations:
Low levels of living and income inequality
Extent of Poverty
Health characterized by high IMRs and malnutrition
Low levels of education and literacy
Low levels of labor productivity
High rates of population growth and dependency burdens
Substantial dependence on agricultural production and primary product exports
Prevalence of Imperfect markets and incomplete information
Dominance, dependence, and vulnerability in international relations

16. Income inequality: Per Capita Gross National Product in Selected Countries, 1997 (in U.S. dollars at official exchange rates)

17. Income: Comparison of GNP Per Capita
GNP Per Capita (US $)
Country
Exchange rate
PPP UK
24,500
23,550
USA
34,260
Zimbabwe
480
2,590
Bangladesh
380
1,650
China
840
3,940
India
460
2,390
Sri Lanka
870
3,470

18. Income gaps: growth rates of real GNP per capita (avg annual growth)
Country
Africa:
Kenya
Nigeria
0.3
-3.0
-0.3
-0.4
Asia:
India
South Korea
3.2
8.9
4.2
4.7
Latin America:
Brazil
Mexico
0.6
-0.9
1.5

19. Distribution of Income

20. Poverty: Share of population living on < $1/ day
Region
1990
1998
East Asia and Pacific
27.6
15.3
Europe and Central Asia
1.6
5.1
Latin America and the Caribbean*
16.8
15.6
Middle East and N. Africa
2.4
1.9
South Asia* 44 40
Sub-Saharan Africa*
47.7
46.3
Total 29 24
* Increase in absolute number of people

21. Health: Infant Mortality Rates in Selected Countries, 1998 (per 1,00 live births)

22. Health and Education: Indicators

23. HDI and GDP Ranks

24. HDI variations for similar incomes, 1999
Country
HDI
HDI rank
GNP per cap~ PPP $1000
Kenya
Uganda
0.514
0.435
123
141
GNP per cap~ PPP $2000
Vietnam
Pakistan
0.682
0.498
101
127
GNP per cap~ PPP $3000
Sri Lanka
Indonesia
0.735
0.677 81
102

25. Population and Labor Force

26. Composition of World Exports (percentages of primary and manufactured products)

27. Markets are imperfect in developing countries due to:
Composition of World Exports (percentages of primary and manufactured products)
Markets are imperfect in developing countries due to:
Economies of scale
Thin markets for many products due to limited
demand
Widespread externalities (good and bad)
Prevalence of common property resources
Incomplete information
Information is costly to obtain