Developing Countries Common and Diverse Characteristics Two Developing

Developing Countries Common and Diverse Characteristics

Two Developing Countries – They are the same in some ways but quite different in others.

• Of the 192 member states of the United Nations, only 52 are currently classified as high-income countries. In other words, 140 countries (73 per cent) are still considered developing economies. • The number of people living on less than US$1. 25 a day is projected to be 883 million in 2015, compared with 1. 4 billion in 2005 and 1. 8 billion in 1990. However, much of this progress reflects rapid growth in China and India, while many African countries lag behind

World Bank Income Classification (2019) • As of 1 July 2019, the World Bank income classifications by GNI per capita are as follows: • 1. Low income: $1, 500 or less • 2. Lower middle income: $1, 501 to $4, 500 • 3. Upper middle income: $4, 501 to $13, 500 • 4. High income: $13, 500 or more

Common Characteristics between Developing Countries • There are many common characteristics of developing countries – the list below is not meant to be an exhaustive one, but here these characteristics might include: • 1. Relatively low incomes per capita compared to richer advanced nations • 2. Lower absolute levels of productivity (labour and capital) • 3. A higher dependency on export incomes from primary commodities / low rates of export diversification • 4. They have a large share of the population living in rural areas and employed in agriculture

Common Characteristics between Developing Countries • 5. A higher than normal “informal” sector of the economy for example in partial subsistence farming • 6. Many industries in low-income developing countries tend to be some distance from the technological frontiers reached in rich advanced nations. • 7. Relatively fast growth of population and a younger average – giving a different shape to the population pyramid • 8. Weaknesses in critical infrastructure such as telecommunications, transport, ports, water and sanitation and institutions such as stable government, a well functioning civil service and money and capital markets

Diversity between Developing Countries • No two less economically developed countries are the same! • There is a huge amount of diversity between them • Think about some of the key structural economic differences between nations – for example:

Diversity between Developing Countries • 1. The size of an economy (i. e. population size, basic geography, annual level of national income) • 2. Historical background including years since independence from colonial rule • 3. Natural resource endowment • 4. The age structure of the population • 5. Ethnic and religious composition

Diversity between Developing Countries • 6. Relative size / importance of public and private sectors of the economy • 7. Structural of national output (e. g. primary, secondary, tertiary and quarternary sectors) • 8. Structure of international trade (both geographical and the commodity pattern of trade) • 9. Political stability, strength of democratic institutions, transparency of government

Diversity between Developing Countries • 10. Ethnic and gender equality and tolerance • 11. The ease with which new businesses can be created and sustained • 12. Other competitiveness indicators including the relative size and strength of highknowledge / high-technology industries