DEVELOPMENT - worksheet

Indicators (172-175)
Indicators of development
Improvement in the quality of life is also called development. It measures progress within a country.
The development gap refers to the differences between high income countries (HICs) and low income countries (LICs).
Uneven development has historical, political, geographical and socio-economic causes.
Development occurs when one of the individual factors in the quality of life improves.
Quality of life is made up of economic, physical, social and psychological factors.
Measures of national income
Gross domestic product (GDP) is the value of the finished domestic goods and services produced within a nation's
borders. On the other hand, gross national product (GNP) is the value of all finished goods and services owned by a
country's citizens, whether or not those goods are produced in that country.
GNP per capita figures allow better comparisons between countries when their total populations are different. It also
does not show regional variations within the country.
Limitation of GNP is that it does not show how health is distributed and how the money is spent.
Purchasing power parities (PPPs) are indicators of price level differences across countries. They indicate how many
currency units a particular quantity of goods and services costs in different countries.
Literacy
Education is a very important indicator of development and literacy is one of the ways to show differences in
educational standards between countries.
Literacy rate - is the percentage of adults who can read and write. This is 99 per cent in most developed countries.
One of the most fundamental achievements for developing nations to attain is female literacy.
There is a direct connection between female literacy and infant mortality rates.
There are still 781 million illiterate people and two thirds of them are women.
People who are literate are able to access information that can improve their quality of life compared to those who are
illiterate.
Life expectancy
The end result of all the factors contributing to the quality of life in a country is shown by life expectancy.
It is also a key measure of inequality illustrated by the variations within the country.
Life expectancy is to the greatest degree influenced by diseases, physical environmental condition such as pollution and
personal lifestyle.
Infant mortality
The most sensitive of the indicators of socio-economic progress is the infant mortality.
Even though infant mortality rates have fallen all over the world, there is still a considerable gap between the richer and
poorer regions.
Human development index
HDI is a composite index which measures disparities in development between countries.
It contains four indicators including life expectancy at birth, mean years of schooling for adults aged 25 years, expected
years of schooling for children of school entering age and GNI per capita (PPP).
The reason it uses four indicators is that no single measure can provide a complete picture of the differences.
These four reflect long and healthy life, knowledge and a decent standard of living.
The maximum value of the index is one and it helps to rank all the countries in the world in their level of development.
The strengths of this system is that it is Reliable. The information is updated on an annual basis and sourced reliably.
Accurate. The HDI is superior to single indicators as it uses two types of social data (health and education) along with
one type of economic data, which gives a broader perspective.
Useful. The HDI is a very useful tool for governments aiming to devise policies focusing on economic and human
development.
However, it has been criticized for being too simple and therefore unable to give a real representation of the level of
development in an economy. It also put too much weight on wealth.
The HDI alone does not measure the extent of inequality in a country. It is possible to have a satisfactory HDI rank and a
huge income gap between the very wealthy and the very poor.
The HDI fails to give an account of whether the development is sustainable.
Inequalities (175-182)
Stages of development
Countries are divided according to level of development into least developed, developing, newly developed and
developed countries.
The poorest of developing countries with major economic, institutional and human resource problems are LDCs.
The situation is made worse by man-made disasters and geographical handicaps.
When countries develop beyond certain point, they are no longer considered to be LDCs.
Countries with have succeeded in rapid industrialisation since 1960s are called NICs.
Four Asian tigers refers to the rapid growth of these countries.
The success of these countries was helped by skilled and relatively low-cost workforce, good infrastructure,
geographical location and government welcoming investments from abroad.
What also helped was positive attitude to education and achievement.
Explaining the development gap
Landlocked countries, small islands and tropical countries are at a disadvantage as for development.
Economies open to foreign investment develop faster than closed economies.
Good government and law and lack of corruption generally results in high rate of growth.
Countries with the birth rate falling the most have the highest rates of economic growth.
The development gap has significant consequences making the poorest countries even more disadvantaged.
Explaining inequalities within countries
Gini coefficient allows us to analyse changes in income inequality in individual countries and to compare countries.
Zero Gini coefficient would mean that everyone has exactly the same income – perfect equality.
If its value was 1, it would mean that all the income would be received by only one person – perfect inequality.
Most affluent countries have typically lower income gap than countries with lower income.
Cumulative causation
The introduction of a new industry or the expansion of an existing industry in an area also encourages growth in other
industrial sectors. This is known as the multiplier effect which in its simplest form is how many times money spent
circulates through a country's economy.
Money invested in an industry helps to create jobs directly in the industry, but it also creates jobs indirectly elsewhere
in the economy.
Spin-off effects include new inventions or innovations that may lead to further industrial development and new
linkages. Through this multiplier effect, an area can develop as a growth pole.
Factors affecting inequalities within countries
Residence
The quality of your life is significantly influenced by where you were born and where you live.
There are disparities between urban and rural area, within urban areas and between different regions in a country.
Urbanisation of poverty is a process in which the poor are moving to the cities.
As a result, large number of people live in slum conditions in developing countries.
Ethnicity and employment
Discrimination of ethnic groups in a population leads to development gap caused by limitation of economic, social and
political opportunities of disadvantaged groups.
Formal sector of economy is characterised by taxation, better pay, greater security and fringe benefits.
Informal sector operates outside official recognition, is low-paid, often part-time, temporary and with no taxation and
poor job security.
While formal includes health and education service and government workers, manufacturing/retail companies, informal
are mostly services such as shoe-shiners, street stool stalls, repair shops and market traders.
Education
There is a clear link between education levels and family size/better-paid employment.
People with smaller families are able to save and invest more in the future.
Standards of education can vary greatly from region to region widening the disparities.
Land ownership
Households headed by women are often the most disadvantaged when it comes to land tenure.
The greatest differences in development occur where there are the largest inequalities in land ownership.