University of Cebu (Lapu-Lapu and Mandaue Campus)

A.C Cortes Avenue, Looc, Mandaue City, Cebu Philippines 6014

College of Business and Accountancy

Econ 225
Prelim Assignment 1
Kimberly G. Gabaran BSMA-4B

Read the link given (reading 1, 2, 3) regarding economic development and answer below question:

Can you think of some common characteristics of a developing countries and briefly justify your
answer.

Poor nations are often known as developing countries. They are sometimes referred to
as underdeveloped economies. Here are some common characteristics of developing
countries in the link provided. One of the most distinguishing features of developing
economies is low per capita real income. They have a low per capita real income, which means
they have less money to save and invest. It implies that the ordinary person does not earn
enough to invest or save. They consume all they earn. As a result, the majority of the
population is trapped in a cycle of poverty. In developing nations, the percentage of people
living in absolute poverty is enormous. Another common feature of developing countries is
that they do have huge populations or high population growth rates. This is frequently due to
a lack of family planning choices, a lack of sex education, and the assumption that procreating
will provide the family with a larger labor force from which to bring in revenue. This rise in
recent decades might be attributed to greater birth rates and lower mortality rates as a result
of improved health care. Lack of education is also one of the characteristic of a developing
countries. Despite efforts to eliminate illiteracy, due to a limited resource and a huge
population, there is still significant illiteracy and unskilled labor. In terms of advanced
technologies and technical devices, developing countries fall behind. For production, they
employ traditional processes and tools. Natural resources really aren't properly used despite
the fact that they contain a considerable amounts of resources and a big workforce. This is
due to the absence of technical expertise. In developing countries, unemployment is the most
serious concern, thus they favor labor-intensive sectors than advanced technologies. Small -
scale and cottage businesses employ a huge number of people and it has a negative impact
on productivity. And another thing is that all developing countries have one thing in
common, they are all in debt. Developed countries lend money to underdeveloped
countries in order for them to grow their economies. They end up paying three times as
much on their debt in the long term. It's great business for the privileged, but not for the poor.
The rich country dominates impoverished countries, as in the Bible states, "and a borrower is
a slave to a lender."

Most countries desire to foster, yet developing countries frequently face institutional
limitations to growth. Growth entails change, and change frequently entails modifications in
the country's economic allocation of wealth. The current rich and government have a great
interest in maintaining power, and one of the ways they do it is by preventing the growth of
rival parties. Consequently, by exploiting government and social institutions to stifle the
economic progress of others, they are also hindering the prosperity of the country's economy.
Not only are real efforts at economic growth thwarted, but a lack of opportunity causes
individuals to cease investing in future economic development because there is no return on
such an investment for average people. Weak institutions keep a nation poor, yet, if there
were opportunities, people would engage and invest to improve their futures, thus, enriching
the country in the process.