© 2015 albert-learning.com what makes a country developed? what makes a country developed?

© 2015 albert-learning.com

What makes a country developed?

WHAT MAKES A COUNTRY DEVELOPED?



VOCABULARY

Price fluctuations 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.



Development Strategies

Encourage savings and Investment

Agricultural Development

Diversification of Industrial Base

Population control

Cancellation of International debt

Trade strategies

Free market Strategy



Many developing countries too reliant on primary commodities

Expansion of industrial base would help avoid over-reliance on thesecommodities

Subject to wide price fluctuations and instability

DIVERSIFICATION OF INDUSTRIAL BASE



AGRICULTURAL DEVELOPMENT

Finding ways of improving agricultural production and productivity may be one route to promoting economic development.



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



PROBLEMS OF MARKET FAILURE

1. Externalities:A. PollutionB. Environmental Degradation

2. Public goods/merit goods – who will provide if the state cannot afford to fill the gap?

3. Period of time to adjustment might mean that large sections of the population would suffer



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:

1. Remove import controls

2. Make exchange rates fully convertible – often means devaluation of the currency

3. Privatisation programme

4. Cutting of subsidies

5. Deregulation of markets

6. Balancing national budgets

Problems:1. Prices tend to rise as subsidies removed and currency devalues2. Cuts in government spending and rise in taxes hits the most vulnerable3. Deflationary policies tend to cause unemployment4. Social unrest can be common5. Living standards fall



OUTWARD LOOKING

1. Reducing the levels of protection

2. Encouraging investment flows

3. Publicising the country's trade and goods

4. Economies of scale

5. Competition stimulates efficiency



INWARD LOOKING

1. Erect protective barriers

2. Subsidise domestic producers

3. Import substitution



HARROD-DOMAR MODEL

2 sources of economic growth:

1. Savings2. Investment to lower

the capital/output ratio

Change in National Income (Δ Y )= Savings ratio(s)/capital output ratio (k) Δ Y = s/k



GENERAL DISCUSSION

1.Discuss about the drawbacks of your country.

2.What are the factors that need immediate attention for economic development of your country?

3.What is the government contribution—is it satisfactory?

© 2015 albert-learning.com what makes a country developed? what makes a country developed?

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