Economic Development
The current modern technology innovations have contributed to the growth in economic development in majority of the nations. In developed nations, almost every activity is operated through innovative technology. The continuous changes that are taking place in the economic development of almost every nation are contributed by the increase in use of technology. However, in most nations in the less developed nations, there are less cases of technological development hence making it almost impossible for the nations to economical expand (Todaro & Smith, 2009).
Most of the people in the less economical nations face difficulty in living decent lives. Approximately forty-five percent of the entire world population faces poverty challenges. Poverty in most of the developing nations has made it almost impossible for the developing nations to improve in terms of economically. The lack of the economical development has increased the cases of chronic disease in the citizens. The increased chances of diseases have decreased the productivity of the people. In most industries, there is insufficient of work force, which is vital in the increasing of the industries productivity levels (Nafziger, 2012). The economy of a given nation is determined by the level of productivity of both the citizens and the industries. This is major contributed by the amount of effort that is contributed by the employees in the building of the nation in subject.
Since most of the people in the third world nations lack the appropriate funds, people live in poverty. High levels of poverty contribute to dehumanization and desperation of most of the citizens since they cannot afford the basic requirement of the human survival. According to the statistical data analysis obtained from the World Bank, almost all the members of the third world nations live before the poverty standards. The statistics indicate that the poorest members of the third world nations spend almost 1 dollar per day for the extreme cases that lack both employment, which is the key source of income. In relation to the other nations, the statistics indicate that in the end of the year 20th century, live on two dollars or less per day (Todaro & Smith, 2009). The remaining of the people that are mostly found in the developing nations all over the world live on less than one US dollar per day. This is an indication that the people live under economic growth, which is contributed by the increment in poverty.
According to the statistical report that is annually compiled by the World Bank in the commonly used economical statistical comparison book, world development report, it indicates that gross national income is vital in determining the economic development in a given nation (Nafziger, 2012). The gross national income is vital in determining the economic development in a given nation because of the fact that it is an indication of the value of the commodities and services given by a given nation in a complete economic year.
Fig. 1. A Table Indicating PER CAPITA GNA for Selected States
From the table, it is true to state that high-income economic nations such as Switzerland and United States have higher gross national income then the lower-income economic nations such as Tanzania and Pakistan. This is for the key reason that most of the lower-income economic nations are less developed in terms of technological improvement. This implies that the level of productivity in such nations is still lower than in the developed nations. To improve the economic development of the low-income economic nations, introduction of technological advances is essential. For instance, Sierra Leone that has a gross national income of $220 will definitely improve and become $43, 560 such as for the United States of will require improvement in the technology that will automatically improve the productivity level of the nation (Todaro & Smith, 2009). This will definitely boost the economic development of the low-income economic nations.
The process of fully becoming economically developed is one of the key challenges that developing nations face. It is not a simple procedure for the low-income nations to wholly become developed economically because of the several procedures that are required for the nations to endure. Four key steps are vital for the nations to go through before becoming economically stable. The steps encompass of dual economy, low productivity, insufficient capital and few human services (Woolcock, 2011).
Dual economy
This refers to the society that comprises of few people that are well informed technologically hence living a modern life in a large community, that majority of its members live in poverty. The group of the people living in modernized lifestyle, elites, will definitely comprise of government officials, landowners and professions (Nafziger, 2012). In such a community there are also a few middle class earning people that mostly comprises of teachers and government workers. However, majority of the society, almost 80% live in a contrary environment surrounded by poverty (Woolcock, 2011). Nations that experience low gross national income in most cases experience the dual economy hence difficulty in experiencing economic development.
Fig 2. Indicating the cycle of underdevelopment
Low productivity
Productivity refers to the rate at which commodities and services are product in accordance to the number of working hours of the people. The production of any given nation and industries is determined by the technological innovations that are enhanced in the machinery. The machinery used in the manufacturing and processing nations ought to be fast and efficient in producing the final products. In most developing nations, the output of the industries, which is given by the number of the working hours, is limited (Todaro & Smith, 2009).
Most of the developing nations lack enough capital to purchase the latest technologically innovative machinery. This implies that most of the developing nations use old machinery that is not effective and efficient like the developed nations industries. The numbers of the employees that are employed in the industries and willing to work in the given hours to increase productivity are also limited. For this reason, rate of productivity of the low earning nations contribute to the poorly economic development.
Insufficient capital
Economics that have low gross national income is contributed by the minimum level of productivity thus earning low capital. Capital of a given nation is determined by the physical capital that entails of infrastructure in the nation. Therefore, the physical capital entails of factories banks and roads. However, there is the financial capital that encompass of the earning that is achieved form the productivity of the people (Nafziger, 2012). The financial capital also involves the available money produced internationally but by the citizens of the nation in subject. Lack of sufficient employment in the developing nation is an additional contributor to lack of enough capital. Insufficient capital is an obstruction that affects the development of the economic improvement in any given nation. For this reason, employees ought to work for more hours in the developing nations to improve the economy of the nation.
Lack of Human Services
Most of the nations that lack enough industries contribute of the fact that the nations are poorly developed. The economy of the nation is contributed by the fact that the citizens of the nations are working to produce more money. The industries in most of the developed nations lack the most appropriate workforce that is supposed to contribute to the increment in the economic development. The fact that most of the developed nations lack the adequate capital to construct the needed infrastructure is a contributor to the lack of qualified personnel. According to the statistics obtained from the World Bank, the developing nations lack the needed workforce services from the citizens because of lack of qualified personnel. The lack of enough institutions is a chief contributor to lack of services needed to run the industries. For this reason, the developing nations cannot produce the adequate income because of the fact that there is less qualified personnel to work in the industries (Todaro & Smith, 2009).
However, the development procedure of a given nation might be improved by the assistance of other external forces such as the international trade, organizations and nations (Castelli, 2011). The interventions provide assistance to the increase in the income of the nation thus contributing to economic development.
Trade
Trade involves the process of exchanging commodities and services with other nations for gaining more income. Most of the developed nations usually take advantage of the less developed nations to acquire more raw materials for the factories. For the nations to balance the trade that exists, the developed nations purchase the commodities from the developing nations (Woolcock, 2011). This contributes to the economic development of the developing nations since the capital earned from the trade is used in the development of the infrastructure in the developing nations. The trade that exists in the nations also contributes to the development of more industries that earn the nation foreign exchange when exporting products.
Aid
Some of the most developed nations such as the United States of America and the Switzerland have opted to assist other existing nations that are less developed. the main aim of assisting the less developed nations is to improve the infrastructure that will assist in boosting the economy of the nations. The assistance is mostly in form of capital and food staff that is used to curb the increased poverty in the developing nations. Some nations also aid the educational funds in the developing nations to boost the level of education. Educating the citizens is vital in the sense that there will be qualified workforce that will improve the performance of the industries in the nations.
Private investors
Private investors that are financially stable also have decided to invest in the less developed nations to increase the economic development of the nation. The investors might decide to establish companies that will contribute to the increase of the income in the specific nations. The companies increase the economic development in diverse ways. For instance, the companies employ the local citizens that add to the income of the nations. The companies also export the products to other nations hence earning the nation in subject foreign currency.
Factors that contribute to poor developed economy
The major aspects that contribute to the poor development of the economy of the third world nations are explosive population growth, corruption and wars (Castelli, 2011).
Explosive population growth
The high population in the developing nations is one of the key contributor to the under development in the developing nations. The increased population forces the government to use the income earned in expansion of the available infrastructure (Greenaway, 2012). This contributes to the under development. The number of the citizens is also more than the available resources.
Corruption
The high levels of corruption in the developing nations are also another contribution to the poor development of the third world nations. Most of the professional people and the government officials spend most of the available capital in the developed nations for their own selfish reasons (Greenaway, 2012). For this reason, the government officials continue becoming rich while the other nations suffer from poverty.
Wars
Civil wars and intercommunity wars are a major contributor to the low development in the economic structure in the developing nations. Most of the income received is used in the buying of fighting of weapons that do not contribute to the development of the economy. The wars also contribute to the destruction of the available property and infrastructure hence leading to poor economic development (Castelli, 2011).
References
Todaro, M. P., & Smith, S. C. (2009). Economic development. Harlow: Addison-Wesley.
Nafziger, E. W. (2012). Economic development. Cambridge: Cambridge University Press.
Woolcock, S. (2011). European Union economic diplomacy: The role of the EU in external economic relations. Farnham: Ashgate.
Castelli, M. (2011). Economics of sovereign wealth funds. Hoboken: John Wiley.
Greenaway, D. (2012). The world economy: Global trade policy 2011. Oxford: Wiley-Blackwell.
