Give any one point of difference between political and economic development.
Answers
Politics studies power relations and their relationship to achieving desired ends. Philosophy rigorously assesses and studies a set of beliefs and their applicability to reality. Economics studies the distribution of resources so that the material wants of a society are satisfied; enhance societal well-being.
Explanation:
The political economy of a country refers to its political and economic systems, together. The political system includes the set of formal and informal legal institutions and structures that comprise the government or state and its sovereignty over a territory or people.
As you know, political systems can differ in the way they view the role of government and the rights of citizens (compare, for example, the market economy of Canada with the command economy of North Korea). The economic system refers to the way in which a country organizes its economy: most are command, market, or mixed economies.
The nature of a country’s political economy plays a big role in whether it is attractive to foreign business and entrepreneurship. Historically, there has been a direct relationship between the degree of economic freedom in a country and its economic growth—the more freedom, the more growth, and vice versa. For decades, the Chinese government maintained an ironclad grip on all business enterprise, which effectively prevented foreign businesses from fully engaging with the Chinese market. That climate has tempered, however, and now the political economy of China is much more open to foreign investment, though it is still not as open as Europe or the U.S.
Businesses seeking global opportunities must consider other economic factors beyond a country’s political economy. For one thing, they will want to target the markets and countries where people have the highest incomes and the most disposable income. The world map below shows just how much variation there is in the gross national income (GNI) per person among the nations of the world.
World map showing gross national income per capita among the nations of the world for the year 2016. The values range from less than 1,000 U.S. dollars GNI per capita to over 50,000 U.S. dollars GNI per capita. Countries with over 50,000 GNI per capita include The United States of America, Australia, Iceland, Norway and Sweden. Countries with 30,000 to 50,000 GNI per capita include Canada, Finland, France and Germany. Countries with under 5,000 GNI per capita include Angola, Uganda, India, Vietnam, Bolivia, and Ukraine.
If you want more information about GNI per country, you can download the World bank dataset of 2016 GNI (atlas method) by country or you can visit the World Bank website to browse datasets including GNI.
However, often those markets are not where new opportunities exist, so businesses have to pursue what economists refer to as “emerging markets.” The four largest emerging and developing economies are the BRIC countries (Brazil, Russia, India, and China). One means of measuring a country’s level of economic development is by its purchasing power parity (PPP), which enables economists to compare countries with very different standards of living. The PPP for a given country is determined by adjusting up or down as compared to the cost of living in the United States.
Roof top mobile phone tower in Bangalore, India
India has the world’s second-largest mobile-phone user base: 996.66 million users as of September 2015. Shown here is a rooftop mobile phone tower in Bangalore.
However, there is often more to a country’s economic story than its PPP or GNI. Consider India: As an emerging market, India is attracting significant attention from businesses all around the globe. It has the second-fastest-growing automotive industry in the world. According to a 2011 report, India’s GDP at purchasing power parity could overtake that of the United States by 2045. During the next four decades, Indian GDP is expected to grow at an annualized average of 8 percent, making it potentially the world’s fastest-growing major economy until 2050. The report highlights key growth factors: a young and rapidly growing working-age population; growth in the manufacturing sector because of rising education and engineering skill levels; and sustained growth of the consumer market driven by a rapidly growing middle class.
At the same time, surveys continue to emphasize the chasm between two contrasting pictures of India—on one side, an urban India, which boasts of large-scale space and nuclear programs, billionaires, and information technology expertise, and a rural India on the other, in which 92 million households (51 percent) earn their living by manual labor. In 2014, a report by the Indian Government Planning Commission estimated that 363 million Indians, or 29.5 percent of the total population, were living below the poverty line.