1. WHAT MAKES A COUNTRY DEVELOPED?

2. VOCABULARY Price fluctuations Environmental degradation Suffer
The difference in the cost of an asset or security from one period to another
Environmental degradation
 Deterioration of the environment
Suffer
Experience or be subjected to (something bad or unpleasant).
Creditworthy
(Of a person or company) considered suitable to receive credit, especially because of being reliable in paying money back in the past.
Output
The amount of something produced by a person, machine, or industry.

3. Development Strategies
Encourage savings and Investment
Agricultural Development
Diversification of Industrial Base
Free market Strategy
Population control
Trade strategies
Cancellation of International debt

4. DIVERSIFICATION OF INDUSTRIAL BASE
Many developing countries too reliant on primary commodities
Expansion of industrial base would help avoid over-reliance on these
commodities
Subject to wide price fluctuations and instability
Industrial diversification is a strategy that involves choosing to structure a company operation in a manner that promotes involvement in a wide range of revenue producing activities.

5. AGRICULTURAL DEVELOPMENT
Finding ways of improving agricultural production and productivity may be one route to promoting economic development.
Property rights – who has the right of ownership?
Land reform – part of the process but not forced (i.e. Zimbabwe)
International agreements – abolition of price controls and trade liberalisation, buffer stock schemes
Productivity improvements – investment in capital, quality seed, etc.

6. FREE MARKET STRATEGIES
Opening up developing countries’ markets to competition
Improvement of the price mechanism – aim to improve efficiency in the allocation of resources and the use of capital and human resources

7. PROBLEMS OF MARKET FAILURE
Externalities:
Pollution
Environmental Degradation
Public goods/merit goods – who will provide if the state cannot afford to fill the gap?
Period of time to adjustment might mean that large sections of the population would suffer

8. STRUCTURAL CHANGE
Plan for economic recovery to make the country creditworthy again and to put in place the conditions for sustainable economic growth
Loans from IMF – in return:
Remove import controls
Make exchange rates fully convertible – often means devaluation of the currency
Privatisation programme
Cutting of subsidies
Deregulation of markets
Balancing national budgets
Problems:
Prices tend to rise as subsidies removed and currency devalues
Cuts in government spending and rise in taxes hits the most vulnerable
Deflationary policies tend to cause unemployment
Social unrest can be common
Living standards fall

9. OUTWARD LOOKING
Reducing the levels of protection
Encouraging investment flows
Publicising the country's trade and goods
Economies of scale
Competition stimulates efficiency

10. INWARD LOOKING
Erect protective barriers
Subsidise domestic producers
Import substitution

11. HARROD-DOMAR MODEL
2 sources of economic growth:
Savings
Investment to lower the capital/output ratio
Change in National Income (Δ Y )= Savings ratio(s)/capital output ratio (k)
Δ Y = s/k

12. Discuss about the drawbacks of your country.
GENERAL DISCUSSION
Discuss about the drawbacks of your country.
What are the factors that need immediate attention for economic development of your country?
What is the government contribution—is it satisfactory?
1)Give synonym : Encourage
2) Give antonym : Debt
3) Give meaning :
Reliant b) Fluctuation c) Subsidies d) Degradation
4) Make a sentence using below word :
a) Commodities b) Adjustment c) Vulnerable