DEVELOPMENT

Objectives of Development
• The objectives:
– To increase the availability and widen the
distribution of life-sustaining goods.
– To raise the standard of living.
• This include economic needs: higher incomes,
more jobs, and material needs.
• Non-economic needs: better education, knowledge
and spiritual fulfillment.
– To expand the range of economic and social
choice.
 Objectives of Development
• The key aim of development is to enable people to
lead better a life.
• The 3 key aspects of a better life are:
i. Sustenance.
The ability to meet basic needs.
ii. Self-esteem.
To be a person.
iii. Freedom from servitude.
To be able to choose.
• Primarily concerned with the efficient, least-
cost allocation of scarce productive resources
over time so as to produce an ever-expending
range of goods and services
Social and institutional processes
Power of economic decision making.
• Which is bring about rapid and
large-scale improvements in
bring levels of living for
masses.
 Social effect
Bring the fruits of economic
progress to broadest segment of the
population.
So that, it requires a larger
government role and some degree of
coordinated economic decision-
making to transform economy.
Objectives of development
 Indicators of development
why?
- To quantify and track the course of development

Economic indicators

Class of
indicators Social indicators

Science and
technology level
 Economic Indicators
GNP – Gross National Product
Sum of all goods and services produced by the factors of
production owned by citizens of a nation.

GDP – Gross Domestic Product

Sum of all goods and services produced in the territory of
the nation, regardless of who own the means of
production that generate the goods or services.

PPP – Purchasing Power Parity

A method of measuring the relative purchasing power of
different countries’ currencies over the same types of
goods and services.
40 years GNP per CAPITA
Facts to know…
In 1998 : Countries with low GNP per capita tend to be located in Sub-
Saharan Africa and parts of Asia.
Countries with high GNP per capita tend to be located in Europe,
North America and parts of Asia.

Generally, people living in countries with higher GNP per capita tend to
have longer life expectancies, higher literacy rates, better access to
safe water, and lower infant mortality rates.

Since 2001, the World Bank refers to the GNP as the GNI (gross national
income).
GDP FORMULA

GDP = R + I + P + SA + W

R = rents
I = interests
P = profits
SA= statistical adjustments (corporate income taxes,
dividends,undistributed corporate profits)
W = wages
When is GDP > GNP
- When substantial portions of the local economy are foreign-owned.

- Income earned within a country goes to foreigners.

- GDP may look healthy but GNP may well be anemic

- This undesirable since control is ceded to foreigners

PPP of GDP for the countries of the world (2003). The US is the base
country, so it is 100. The highest index value, for Bermuda, is 154, so
the same goods are 54% more expensive in Bermuda than in the
United States.
 Social Indicators
Population growth rate (PGR)
Measures the increase in a country’s population and reflects the
number of births and deaths and people migrating into and out
of the country.

Chart 1: Total World

Population by Country
Income Group, 1980,
1998, 2015
 Social Indicators cont..
Goods and Service Things that are produced by a country's economy.
Eg (good): food, clothing, machines, and new roads.
Eg (service): doctors, teachers, and engineers,

Indicators
Literacy
Ability to read and write
Student enrollment
Health Degree level and above
 Life expectancy at birth
 Infant mortality rate
 Density of doctors
 Science and Technology Indicators
Legal concept
Copyrights Give exclusive rights
Eg: KIA give manufactured authority to NAZA.

Patents

Indicators An exclusive right granted for an

invention.
Eg: Proton [waja, Persona, Saga]
Trademark Register under IP organization,
(Intellectual Property
An indicator of some kind in order to recognize their Corporation of Malaysia)
product or identity.
Eg:
-Malaysia trademarks is the tallest twin tower building
in the world which is Petronas Twin Tower,
-national car maker, Proton,
-ERL, LRT
Developing Countries
 Developing
Country

Inconsistent varying
Undeveloped or
human development
developing industrial
index (HDI) score and
base
per capita income

Country with low

average income
compared to the
world average.
 Developing Country
In general

Not achieved a
significant degree of
Have a low standard of
industrialization relative
living
to their populations
High income      
Upper-middle income      
Lower-middle income      
Low income
 Industrialization

• Industrialization is a process of social and economic

change whereby a human group is transformed from a
pre-industrial society into an industrial one

• It is a part of a wider modernization process, where

social change and economic development are closely
related with technological innovation, particularly with
the development of large-scale energy and metallurgy
production
 Standard of living
• Refers to the quality and quantity of goods and services
available to people, and the way these goods and
services are distributed within a population.

• Generally measured by standards such as income

inequality, poverty rate, real income per person.

• Other measures such as access and quality of health

care, educational standards and social rights are often
used as well.
 Measure of development
• The term 'developing country' often refers mainly to
countries with low levels of economic development.

• Usually closely associated with social development, in

terms of education, healthcare, life expectancy.

• Development of a country is measured with statistical

indexes such as income per capita (GDP), the rate of
literacy, and access to water.

• There is a strong correlation between low income and

high population growth.
 Technology Development

• For long term effectiveness, technology transfer should always be

accompanied by science transfer.

• Science and technology awareness does not necessarily make it easy

to develop, and popularize science. Inadequate scientific
infrastructure is a critical factor which creates strong barriers to the
path of advancement in developing countries.

• In summary, the social and economic growth of the developed

countries is dependent on an essential emphasis on education,
science, and technology. The basic problems of developing countries
are the weak educational and scientific infrastructure, and a lack of
appreciation of the importance of science as an essential ingredient of
economical and social development.
 Newly industrialized country
• Newly industrialized country (NIC) is a socioeconomic
classification applied to several countries around the
world by political scientists and economists.

• Countries whose economies have not yet reached first

world status but outpaced their developing
counterparts.

• Countries undergoing rapid economic growth (usually

export-oriented). Incipient or ongoing industrialization is
an important indicator of a NIC.
 Newly industrialized country
NICs usually share some other common features,
including:

•Increased social freedoms and civil rights.

•Strong Political Leaders
•A switch from agricultural to industrial economies,
especially in the manufacturing sector.
•An increasingly open-market economy, allowing free
trade with other nations in the world.
•Large national corporations operating in several
continents.
•Strong capital investment from foreign countries.
•Political leadership in their area of influence.