Underdeveloped And Developing Economy

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Underdevelopment is a macro-economic term used to describe the underdeveloped countries/economies in the world. Underdevelopment usually suggests unusual potential, i.e, an economy that has not developed as it could, or an economy that has a long way to go in achieving full capacity. An undeveloped country is a country with good prospects for using more capital or more labour, or more available natural resources, or all of these to support its present population to achieve a higher level of living standard. It is important to note that Underdevelopment is a relative concept. It makes sense only by comparison. In this sense, we may consider an underdeveloped or developing economy as one whose levels of development - economic and social…show more content…
They are unable to satisfactorily cater for the economic, social, and other basic needs of the population. The general natire of an underdeveloped/developing society may be gathered from common economic characteristics of such society. While it may be difficult to locate a representative underdeveloped country, it is much easier to bring our some fundamental characteristics common to underdeveloped/developing societies. These characteristics include: * A low average real income and a low growth rate of per capital income. Most of the other characteristics of Underdevelopment derive from this singular ominous favtor - low per capita income. For example, Sub-Saharan Africa is credited with the lowest per capita income of $450. This means that the standard of living of the average sub-Saharan African is low compared to her counterparts in other regions of the world whose per capita income is higher. * A high consumption ratio or a low saving ratio. This is a fallout of a low average real income. There is so much to spend the little income on, coupled with high price levels, such that very little or nothing of it is left for…show more content…
In 1990, the world 's population was estimated at 5.3 billion, of which more than 3/4 lived in the less developed countries. Almost all the developing countries possess high population growth potential characterised by high birth rate and high but declining death rate. Death rates in developing countries have fallen, compared to the past, due to improved health conditions and control of major infevtious diseases. On the average annual population growth rate in developing countrues is 2% as compared with about 0.7% indeveloped countries. Birth rates are generally high in the order of 30-40 per 1000 whereas those for advances countries are less than half that figure. An important consequence of high birth rate is that a larger proportion of the total population is in the yohnger age groups. This leads to a higher economic dependency burden on those that are employed. With many dependants to support, it becomes diffucult for the workers to save and invest in productive

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