1. E CONOMIC D EVELOPMENT : O VERVIEW -2-

2. W ORLD I NCOME D ISTRIBUTION

3. “L EAST L IVABLE C OUNTRIES ” BY HDI, 2004

4. “M OST L IVABLE C OUNTRIES ” BY HDI, 2004

5. D IFFERENCES IN RATE OF INCOME GROWTH IN COUNTRIES

6. I NCOME D ISTRIBUTION IN D EVELOPING C OUNTRIES -1- Enormous wealth coexisting with great poverty within developing countries, Poorest 40% of the population earn, on average, around 15% of overall income, whereas the richest 20% earn around half of total income, Intra-country vs. inter-country disparities, The poor are twice cursed: (1) living in countries that are poor on average, (2) receiving end of the high levels of inequality in those countries

7. I NCOME D ISTRIBUTION IN D EVELOPING C OUNTRIES -2- Tendency for the share of the richest 20% to fall as we cross the $8,000 p c income threshold, Also there exists a tendency for the share of richest 20% to rise early on in income scale, The share of poorest 40% at both extremes of the income scales is relatively high, and falls to a minimum in the middle Conclusion: Inequality might rise and then fall as we move from lower to higher income levels (remember Kuznet’s inverted U hyppothesis).

8. S HARES OF P OOREST 40% AND R ICHEST 20% FOR SELECTED COUNTRIES CountryP C Income (1993 PPP)Share of poorest 40%Share of Richest 20% 0 – 3000 PPP Tanzania Uganda India Bangladesh Senegal Nicaragua Pakisatan El Salvador Sri Lanka 580 900 1220 1290 1650 1900 2170 2350 2990 18 17 21 19 11 12 21 12 22 45 48 41 46 59 55 40 53 39 3000 – 9000 PPP Peru Guatemala Brazil Colombia Costa Rica Panama Thailand Mexico Malaysia Venezuela 3220 3350 3370 5490 5520 5840 6260 6810 7930 8130 14 8 7 12 13 8 11 10 13 11 50 63 65 54 50 60 59 60 54 59 9000 + PPP Rep. Korea Portugal Mauritus Spain UK France Japan US 9630 10710 12420 13510 17210 19000 20850 24740 20 18 23 20 19 18 15 42 40 43 35 41 42 44

9. E CONOMIC D EVELOPMENT P ROCESS At very low levels of income, average levels of living are very low, and so it is difficult to squeeze the income share of the poorest 40% below a certain minimum. Share of the richest 20%, on the other hand are high, but not as extraordinarily high as in middle income countries, Richest group in the society, more than proportionately benefit from development process, and share of poor tend to fall (not in absolute terms), At higher levels of p c income, economic gains tend to be distributed more equally.

10. H UMAN D EVELOPMENT GNP p c : A reliable indicator of development? Indicators of Development: Literacy, Access to Drinking Water, Low Rates of Infant Mortality, Life Expectancy, etc. A high GNP p c with poor indicators of Development: HOW? Income Inequality

11. H UMAN D EVELOPMENT I NDEX Puts various socio-economşc indicators together, Three components: (1) Life expectancy at birth: indirectly reflects infant mortality, (2) Educational attainment of the society: 2/3 weighted average of adult literacy + 1/3 weighted combination of enrollment rates in primary, secondary and tertiary education, (3) P c income, adjusted after a threshold.

12. T URKEY ’ S HDI 2006 AND U NDERLYING I NDICATORS I N C OMPARISON WITH S ELECTED C OUNTRIES HDI Value (2006) Life expectancy at birth (years) Adult Literacy Rate (%, age 15 +) Combined Primary, Secondary, Tertiary School Enrollment rato (%) GDP p c (PPP US $) 1. Iceland (.968)1. Japan (82.4)1. Georgia (100.0) 1. Australia (114.2)1. Luxembourg (77,089) 74. Mauritus (.802) 85. Dominican Rep. (71.8) 72. Peru (88.7) 104. Malaysia (71.5)59. Mexico (12,176) 75. Bosnia H. (.802) 86. Lebanon (71.7) 73. Bahrain (88.3) 105. Maldives (71.3)60. Argentina (11,985) 76. Turkey (.798)87. Turkey (71.6) 74. Turkey (88.1) 106. Turkey (71.1)61. Turkey (11535) 77. Dominica (.797) 88. El Salvador (71.5) 75. Sain Vincent (88.1) 107. Tajikistan (70.9)62. Venezuela (11,115) 78. Lebanon (.796) 89. Paraguay (71.5) 76. Dominica (88.0) 108. Botswana (70.6)63. Mauritus (10,571) 179. Sierra L. (0.329) 179. Swaziland (40.2) 147. Mali (22.9) 179. Dijbouti (25.5)178. Congo (281)

13. I NTERNATIONAL C OMPARISON HDI of Industrial Countries = 0.916, HDI of Developing Countries = 0.570, HDI of Industrial Countries are 1.6 times higher than Developing Countries, eventhough their Real GDP p c (PPP$) is 6 times higher! => Mean Anything?? => Ranking

14. I NCOME P C & H UMAN D EVELOPMENT GDP still acts as a fairly good proxy for most aspects of development. Argument: Rising income levels ultimately translate into beter health, nutritional, and educational standards in a population. Explanatory Power of p c GDP has over other basic indicators => Correlations among GDP pc and indicators of Human Development.

15. L IFE E XPECTANCY V S. GDP P C FOR D EVELOPING C OUNTRIES

16. A VERAGE YEARS OF S CHOOLING VS. GDP P C FOR D EVELOPING C OUNTRIES

17. I NCOME P C VS. T OTAL F ERTILITY R ATE FOR D EVELOPING C OUNTRIES

18. S TRUCTURAL F EATURES Demographic Characteristics Occupational and Production Structure Rapid Rural – Urban Migration International Trade

19. D EMOGRAPHIC C HARACTERISTICS Poor Countries are characterised with high birth / death rates. As development proceeds, death rates decrease, often birth rates remain high => Gap opens between birth and death rates => High population growth * Negative Population Effect vs. Positive Population Effect