REAL CONCEPT OF

DEVELOPMENT
LESSON 1 | ECONOMIC DEVELOPMENT
“A better quality of life has been the objective
of societies and nations.”
Basic Economic Problems
- Every nation, rich or poor, has economic problems.

- There are more serious and widespread in poor countries.

- Economic problems exist because:

◦ (1) Resources are limited; (2) Human wants are unlimited.
Basic Economic Problems
- Three Basic Economic Problems:
1. What goods to produce and in what quantities?
2. How to produce the goods?
3. For whom the goods are produced?
What goods are to be produced?
- It is not really possible to produce all the goods that
people want for their satisfaction.

- a system of priority has to be established.

- Basic needs or people are given top priority.

What goods are to be produced?
CAPITALISM
- Goods which command the highest price and profit.

COMMUNISM
- for service and not for profit, goods produced according to
the needs of the people.
What goods are to be produced?
SOCIALISM
- combination of capitalism and socialism. Production of
goods is based on needs and profits.
How are the goods produced?
- The ideal situation is to produce the goods with the most
efficient method.

- This involves machines, technology, management, and

skills.

- Many developing countries are deficient on these.

For whom are the goods produced?
- The distribution of goods is determined by the economic
system:

1. CAPITALISM
- Allocated in the market.
For whom are the goods produced?
2. COMMUNISM
- goods are distributed according to the needs of the
people. It is a classless society. There is equality.
For whom are the goods produced?
3. SOCIALISM
- both the market and the state determine the distribution
of goods.
- Essential and strategic goods are being allocated by the
government at cost.
- Goods that are given to the private sector are sold for
profit.
The Meaning of Economic
Development
- It is a progressive process of improving human conditions,
such as the reduction or elimination of poverty,
unemployment, illiteracy, inequality, disease and
exploitations.
The Meaning of Economic
Development
- involves both economic factors (capital, technology, and
market) and non-economic factors (culture, religion,
government, education)
Classifications of Countries
- The economy of a country is measured by its Gross
National Product (GNP).

- The basis of comparison is the economy of highly

developed countries.
Classifications of Countries
Highly Developed Countries (USA, Canada, Japan, Australia)

Intermediate/Developing Countries (Argentina, Spain,

Poland, Saudi Arabia)

Underdeveloped/Less developed Countries (India,

Philippines, Vietnam, Kenya)
Development and Growth
- Development is a progressive and dynamic process.
- Growth is the result of a process.
- Therefore: growth is the product of development.
Development and Growth
- Economic growth is visible and measurable.

Examples: roads, vehicles, houses, buildings, hospitals,

banks, schools, etc.
Development and Growth
- Development means more than imposing buildings,
beautiful houses, elegant cars, money or modern machines.

- It includes fundamental changes in society, ways of life,

values and institutions.