Discuss in detail the common
characteristics of developing countries. (8 marks)
Answers
Explanation:
Characteristics of Developing Countries
1.Income per year which tends to be low. ...
2.Security Not Guaranteed. ...
3.Minimal Health Facilities. ...
4.Uncontrolled Population Development. ...
5.The Unemployment Rate. ...
6.Imports are higher than exports.
The first important feature of the developing countries is their low per capita income. According to the World Bank estimates for the year 1995, average per capita income of the low income countries is $ 430 as compared to $ 24,930 of the high-income countries including U.S.A., U.K., France and Japan.
. Excessive Dependence on Agriculture:
A developing country is generally predominantly agricultural. About 60 to 75 per cent of its population depends on agriculture and its allied activities for its livelihood. This excessive dependence on agriculture is the result of low productivity and backwardness of their agriculture and lack of modern industrial growth.
Low Level of Capital Formation:
The insufficient amount of physical and human capital is so characteristic a feature in all undeveloped economies that they are often called simply ‘capital-poor’ economies. One indication of the capital deficiency is the low amount of capital per head of population. Not only is the capital stock extremely small, but the current rate of capital formation is also very low. In the early 1950s in most of developing countries investment was only 5 per cent to 8 per cent of the national income, whereas in the United States, Canada, and Western Europe, it was generally from 15 per cent to 30 per cent.
Rapid Population Growth and Disguised Unemployment:
The diversity among developing economies is perhaps nowhere to be seen so much in evidence as in respect of the facts of their population in respect of its size, density and growth. While we have examples of India, Pakistan and Bangladesh with their teeming millions and galloping rates of population growth, there are the Latin American countries which are very sparsely populated and whose total population in some cases numbers less than a single metropolitan city in India and China.
Lower Levels of Human Capital:
Human capital – education, health and skills – are of crucial importance for economic development. In our analysis of human development index (HDI) we noted that there is great disparity in human capital among the developing and developed countries. The developing countries lack in human capital that is responsible for low productivity of labour and capital in them.
Dualistic Structure of the Underdeveloped Economies:
An important feature of developing economies, especially those which are marked by surplus labour is that they have a dualistic structure. This dualistic character of these economies has been held to be the cause of unemployment and underemployment existing in them. Keeping in view this dualistic structure of less developed economies, important models of income and employment have been propounded.