Group 1

Economic Development
According to Arthur Lewis, it is the increase in per capita production.
As stated by Professor Dudley Seers, it is the reduction in unemployment, poverty and
income inequality.
According to B. Okun and Richardson, it is a sustained, secular improvement in
material well-being which we may consider to be reflected in an increasing flow of
goods and services.

Factors affecting Economic Development:

✓ Macroeconomic Stability
✓ Levels of infrastructure
✓ Natural Resources
✓ Educational Standards
✓ Levels of Inward Investment
✓ Barriers to trade
✓ Political Stability

DISTINCTION BETWEEN ECONOMIC DEVELOPMENT AND ECONOMIC GROWTH

As to effect:
• E.Development: Brings qualitative and quantitative changes in the economy.
• E.Growth: Brings quantitative changes in the economy
As to relevance:
• E.Development: More relevant to measure progress and quality of life in developing
nations.
• E.Growth: A more relevant metric for progress in developed countries.
As to scope:
• E.Development: Comprehensive as it is concerned with structural changes in the
economy.
• E.Growth: Narrow as it is only concerned with changes in income level.
Traditional View of Economic Development
- is concerned primarily with the efficient, least-cost allocation of scarce productive
resources and with the optimal growth of these resources over time so as to produce
an ever expanding range of goods and services.

Myths about Economic

Growth:
✓ It is an indicator of wealth, which reflect the quantity of resources available to a
society.
✓ Does not tell about people's quality of life: access to education and health care,
employment opportunities, availability of clean air and safe drinking water, the threat of
crime and so on.
✓ Economic Growth, by increasing a nation's total wealth, also enhances its potential
for reducing poverty and solving other problems.

THREE SECTORS OF THE ECONOMY:

Primary sector
- the part of the economy that takes and uses raw materials directly from the natural
environment.
Secondary sector
- the economy transforms raw materials into finished products and is essentially the
manufacturing industry.
Tertiary Sector
- is the part of the economy that provides services rather than products.

Stages of Society:
Pre Industrial Societies
✓ Limited Production
✓ Predominantly agricultural economy
✓ Limited division of labor
Hunting and Gathering Societies
- Societies composed of people who depend primarily on wild foods for subsistence
having diverse strategies dependent on their environment.
Horticultural societies
- cultivate plants in small gardens with the use of simple tools to provide food.
Agricultural societies
- societies with social order constructed around farming, with the ability to produce
food surpluses because of their invention of plows and wheels. The only preindustrial
society with a separate institution — the economy.
Industrial and Division of Labor Societies
- One important consequence of this society was specialization of work or division of
labor.
Post Industrial Societies
- one that has transitioned from an economy of goods to an economy of services
wherein information, services and advanced technology are more important that
manufacturing tangible goods.
Key Development Indicators And Goals
- These indicators help in understanding the level of development,comparisons with
other countries, or different time periods. It can also help in better planning towards
achieving economic development.
Growth rate of National Income
- If there is rise in national income, this indicates economic development or when there
is high rate of national income, development rate is high and vice versa.
Per Capita Income (PCI)
- The average income of the people living in the country is the per capita income. The
rise in PCI indicates economic welfare of the country.
Per Capita Consumption (PCC)
- The increase in consumption of goods and services by the people is measured in PCC.
Physical Quality Life Index (PQLI) and Human Development Index
(HDI)
- PQLI is the overall welfare of the people in life expectancy, infant mortality rate,
standard of living.
- HDI measures life expectancy, education and standard of living.
Industrial progress
- an important indicator of the economic development of a country. It helps to increase
per capita income and the national output of the country.
Capital Formation
- it means investing in transport, irrigation, roads, electricity, technology etc. higher
capital formation will lead to higher economic development.
SECTION A - GROUP 4
POVERTY AND INEQUALITY

The United Nations (UN) define absolute poverty as a condition characterised by severe
deprivation of basic human needs, including food, safe drinking water, proper sanitation
facilities, health facilities, shelter and education.
Inequality is the degree to which income or wealth are distributed unequally throughout a
population.

DIFFERENCE BETWEEN POVERTY AND WEALTH INEQUALITY

Poverty - when people are unable to afford the sufficient necessities to sustain themselves.
Income inequality - degree to which income is distributed unequally throughout a population.
Wealth inequality is how unequal the distribution of wealth is throughout a population.

TWO INFORMATION:
Welfare Aggregate - quantifies individual or household wellbeing through the measurement of
resources available for consumption
Poverty Threshold - measures the minimum requirement to say that an individual or household
is not deprived.

KEYWORDS
Consumption-based poverty - assesses what people consume or purchase, regardless of how
it was paid for (whether through income, tax credits, or non-cash benefits) to determine
whether their needs are being met or not.
Income-based poverty - take the form of measures such as incomes below half the mean
(average) income, or half the median income.
Welfare Measurement - involves the concepts of income, real income, per capital real income,
and occasionally a measure of inequality; works with such concepts as preferences, utility, and
social welfare functions.

MEASUREMENT OF POVERTY
Official Poverty Threshold – The Philippine Statistics Authority (PSA) sets an official poverty
threshold. This threshold represents the minimum income or expenditure level required to
meet basic food and non-food needs. It is regularly updated to account for changes in prices
and living standards.
Income and Consumption Surveys – The PSA conducts regular surveys to gather data on
households' income, expenditures, and living conditions. This data is used to calculate poverty
rates and understand income distribution.
National and Regional Poverty Incidence – Poverty incidence rates are calculated at both the
national and regional levels. These rates show the percentage of the population living below
the official poverty threshold in different areas.
Food and Non-food Thresholds – Poverty is assessed using two thresholds: the food
threshold and the non-food threshold. The food threshold represents the minimum income
needed to cover basic food needs, while the non- food threshold includes other essential
expenses like housing, education, and healthcare.
Subsistence Incidence – Measures the percentage of the population living below the food
threshold. This reflects extreme poverty, where people struggle to afford even basic food
necessities.
Multidimensional Poverty – Income-based measures which looks at factors like health,
education, and living standards.
Socioeconomic Indicators – The measurement is regarding with access to clean water,
sanitation, and housing quality, are used to assess living conditions and well-being.

CAUSES OF POVERTY
Global factors
1. INEQUALITY AND MARGINALIZATION
2. HUNGER, MALNUTRITION, AND STUNTING
3. POOR HEALTHCARE SYSTEMS
4. LACK OF EDUCATION
5. LACK OF RESERVES
Country-specific factors
1. LOW TO MODERATE ECONOMIC GROWTH FOR THE PAST 40 YEARS
2. WEAKNESS IN EMPLOYMENT GENERATION AND THE QUALITY OF JOBS GENERATED
3. RISKS SUCH AS ECONOMIC CRISIS, CONFLICTS, NATURAL DISASTERS, AND
"ENVIRONMENTAL POVERTY”
CONSEQUENCES OF POVERTY
Social Consequences

 The poor have more stressful lives meaning they are more likely to experience family
troubles

 Domestic violence

 Poor people are more likely to engage in criminal activities

 Less able to participate in leisure and cultural activities, such as going to the cinema or
to a museum, due to price barriers
Economic Consequences

 The deprived are more likely to be homeless or live in bad conditions, which can affect
their health

 Poor families often spend most of their income on housing

 Poor families often live in unsafe, underfunded neighbourhoods

 Due to having less access to high-quality education, and good job opportunities, they
are likely to also get low-income jobs
Health Consequences

 Infant mortality is higher among the deprived. Adults die younger as well.

 Mental health issues are common among the poor.

 They may not be able to afford or access good medical care

 The poor often suffer from health problems due to subpar living conditions, or as a
result of lower quality food

CONSEQUENCES OF INEQUALITY

 Political Polarization

 Lower Economic Growth

 Poverty

The people who will suffer in inequality:

 Exclusion
  Reduction in living conditions

 Social conflict

 Ethnic movements

Poverty reduction is a common goal of the world that requires a comprehensive approach to
improve the political, socio-cultural, economic, human and protective capabilities of the poor.
To reduce poverty, the capabilities of the poor must be strengthened through changing the
environments surrounding the poor and by breaking the vicious cycle of poverty.
FOUR DEVELOPMENT OBJECTIVES FOR POVERTY REDUCTION
1. Development of policy and institutional framework for planning and implementation of
poverty reduction (political capability, socio-cultural capability)
2. Maintenance and improvement of income levels of the poor (economic capability)
3. Fulfillment of the Basic Human Needs of the poor (human capability)
4. Reduction of external threats and enhancement of capacity of the poor to cope with shocks
(protective capability)

EFFECTIVE POVERTY REDUCTION STRATEGIES

DEVELOPMENT OBJECTIVE 1: Development of Policy and Institutional Framework for
Planning and Implementation of Poverty Reduction

 Formulation and Implementation of Poverty Reduction Plans

 Development of Systems to Provide Social Services to the Poor

 Protection of Human Rights

 Promotion of Independence and Community Participation of the Poor

DEVELOPMENT OBJECTIVE 2: Maintenance and Improvement of Income Levels of the Poor

 Maintenance and Improvement of Income through Sustainable Agriculture and

Fisheries

 Maintenance and Improvement of Income through Expansion of Non-

agricultural/Fishery Employment Opportunities

 Development of Industrial Infrastructure

DEVELOPMENT OBJECTIVE 3: Fulfillment of Basic Human Needs of the Poor

 Improvement of Educational Standards of the Poor

 Improvement of Health Conditions of the Poor

  Improvement of Living Conditions of the Poor
DEVELOPMENT OBJECTIVE 4: Reduction of External Risks and Enhancement of Capacity of
the Poor to Cope with Shocks

 Strengthening Natural Disaster Management for the Poor

 Special Attention to the Poor under the Post-conflict or Highly Tense Situations

 Reduction of Economic Vulnerability of the Poor

 Risk Reduction for Infectious Diseases among the Poor