Less developed countries
What do we mean when we say a country is developed? The United Nations uses three measures: life expectancy, education and real individual income. If we use these measures to describe the world, we quickly understand that only a privileged few live in developed countries. Poverty, for instance, causes the deaths of about 30,000 children every day. Over a billion people cannot read or write. Half the world earns less than $2 a day. Clearly, most of the world's population live in less developed countries. But why is development so difficult for these nations?
There are many reasons. Some countries lack the raw materials and capital needed for growth. Others regularly suffer from natural disasters such as droughts and floods. Diseases such as cholera and AIDS are widespread in many less developed countries. This causes suffering to millions of individuals and families, but it is also disastrous for the economies of these nations. Lack of education also holds back development. This may be because governments cannot afford to provide schools and colleges. However, millions of families in these nations are caught in a poverty trap. This prevents their children from getting a basic education even when it is available. Without quality human capital, these economies cannot grow.
Political insecurity is another reason for underdevelopment. Many of these countries belonged to colonies in the past. When the foreign powers finally left, these countries often fell into years of political instability and war. Even when peace comes to these countries, political corruption makes development difficult as there is still a climate of political instability. Foreign companies do not want to invest in a country which suffers from corruption. Similarly, foreign governments are reluctant to give aid when they see that their money is spent badly or simply disappears.
All of these problems make it very difficult for less developed countries to improve their economies. However, there are other more complex issues which hamper development. The first of these is debt. The second is unfair trading. Many people believe that these two problems are the cause of all the other problems that developing countries face.
Many of the world's poorest countries are trapped in a cycle of debt. This is because they need to borrow money in order to pay the interest on debts they already have. The poorest 60 countries owe many hundreds of billions of dollars. However, they spend more money paying off debts than they receive in aid. Unless these debts are cancelled, these countries will never escape the cycle.
After years of slow development, it is hard for poorer countries to compete with developed countries for international trade. Without mature industries of their own, they must rely on exports of primary goods. These primary goods do not earn as much money as the products that developed countries export. What's more, because poor countries rely on grants from rich countries, they are often forced to spend the money on manufactured imports. This means they cannot buy the things they really need: capital goods to help their economies grow.
Date: 2015-12-11; view: 1298