Under developed economy. What Is a Developed Economy? Definition, How It Works, HDI Index 2022-10-06
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An underdeveloped economy, also known as a developing or emerging economy, is a country that has a lower level of economic development and a lower per capita income compared to more developed countries. These countries often have less advanced industrial and technological infrastructure, lower levels of education and human capital, and weaker institutions and governance compared to developed countries.
One of the main characteristics of an underdeveloped economy is a low level of economic growth and productivity. This can be attributed to several factors such as low levels of investment in physical and human capital, weak infrastructure, and low levels of technological development. These factors can create barriers to economic growth and hinder the development of a modern and diversified economy.
Another characteristic of an underdeveloped economy is a high level of poverty and income inequality. Many people in these countries live in extreme poverty, and there is often a wide gap between the rich and the poor. This can be due to a lack of access to education, healthcare, and other basic services, as well as a lack of economic opportunities and a lack of strong institutions to promote social and economic mobility.
Underdeveloped economies also often have a high dependence on primary industries, such as agriculture and mining, which are typically less productive and provide fewer employment opportunities compared to more advanced sectors of the economy. This can lead to a lack of diversification and a lack of resilience to external shocks, such as natural disasters or changes in global commodity prices.
There are several challenges that underdeveloped economies face in trying to overcome these issues and accelerate their economic development. One challenge is the need to invest in physical and human capital, including infrastructure, education, and healthcare. This requires a combination of public and private investment, as well as strong institutions to create a supportive environment for economic growth.
Another challenge is addressing issues of inequality and poverty. This requires policies and initiatives to promote social and economic mobility, such as targeted social assistance programs and policies to increase access to education and healthcare.
Finally, underdeveloped economies need to diversify their economies and move towards more advanced sectors in order to increase productivity and competitiveness. This can involve measures to encourage innovation and technological development, as well as policies to create a more supportive business environment for entrepreneurs and small businesses.
Overall, underdeveloped economies face many challenges in their efforts to accelerate economic development and reduce poverty and inequality. However, with the right policies and initiatives, it is possible for these countries to make progress and move towards a more prosperous and equitable future.
What Is a Developed Economy? Definition, How It Works, HDI Index
Conclusion From above discussion we come to know that developing and under-developed countries face a lot of problems in way of development. Difference The gap between the rich and the poor is wide. Most of the population falls below poverty line i. The world is not equal and every country has had its own share of challenges. A country having less utilization of resources and low per capita income which leads to low GDP of the country is called a developing nation.
The resources in this form of the economy are not judiciously utilised and there is a high rate of dependency on traditional approaches which results in a low rate of production. Question 3: What are the main characteristics of an underdeveloped economy? To pave the path of the future, we must understand how we have reached here. Unfortunately, intensive and large-scale farming requires fewer people per acre than the small holdings. Indian economy is an underdeveloped economy because almost all important features of an underdeveloped economy arc still present in Indian economy. In India, in 1981, about 71 per cent of the working population was engaged in agriculture and its contribution to national income was 36 per cent. Development gap refers to the difference between the standards of living of richer and poorer countries of the globe. The pace of industrialisation in these countries is very slow due to lack of capital formation, paucity in the supply of machinery and tools and also due to lack of initiative and enterprise on the part of people of these countries.
In developing countries issue of Education The growth rate in Whereas the growth rate of developing countries in education sector is low as compared to developed countries. Further, these correlations highlight important relationships between non-economic factors and more productive economies. Unemployment; Poverty; child marriage; Injustice; High population growth rate; illiteracy; Corruption; High Dependence on Agriculture; Economic inequality; Corruption; Lack of structural, institutional and technical change. For example, Characteristics of underdeveloped countries Underdeveloped countries have very low per capita income, and many residents live in very poor conditions with little access to education or health care. These problems can be solved only through good governance and spread of education among the masses. Naturally the national income remains at a low level. The top 10 countries in the HDI index were Norway, Ireland, Switzerland, Hong Kong, Iceland, Germany, Sweden, Australia, Netherlands, and Denmark.
Difference between Developed and Underdeveloped Economy
It can be determined that an underdeveloped country is one in which its inhabitants have difficulty and inability to enjoy services and elements that are basic to have a quality of life, such as health services, drinking water, housing, electricity, education, decent employment and sometimes until feeding. The problem cannot be solved by the creation of money alone, but large-scale Government activity is required. Roads and Infrastructure Developed countries have a very sound infrastructure by having better roads, railway tracks, airports etc. Contemporarily, democracy seems to achieve this point somewhat haphazardly, as many of the developed economies in the world are democracies. It is so because countries are at different stages of economic development. A very high proportion of working population is engaged in agriculture, which contributes a very large share in the national income.
Others pointed to the climate, areas with a harsh climate would have been denied the conditions to form productive agriculture or exploit marketable resources. So, despite whatever challenges we may be facing, there cannot be a one size fits all type of solution as every challenge is unique in itself. However, the reality is that the solution lies in leaving aside the thought that awaits solutions from heaven, cultures that have loaded their problems on others and intend their solutions to be provided by others. Labor workers are undereducated, underfed, and have poor medical care. Difference between Developed and Developing Countries Countries are classified on the basis of economic development. It has almost 5,76,000 villages. It is the situation of a region or country or region, when its capacity to produce social welfare or wealth, does not reach certain levels considered optimal, being in a backward state when making a comparison with the state of more prosperous countries.
Underdeveloped countries are characterized by lack of industrial development. In other words, the people of a country must believe a government in order to act upon governmental policies that encourage economic development. Only an expanding market can provide a fruitful field for profitable investment and result in economic development of the country. What is underdeveloped country and its characteristics? Income There is a high level of income as per citizen living in developed country so that they have high GDP and GNP. The question is a complex one and it includes various dimensions which must be carefully analyzed.
The world of today has extreme inequalities which exist among the countries, there are countries where people enjoy a much superior standard of living when compared to other nations. That is, a government is judged based on performance and reflects the opinions of the people it serves. The underdeveloped economy is one which has low per capita income, high rate of population growth, dependence on backward agriculture, etc as when compared to developed economy. What is underdeveloped economy? The gap between the rich and the poor is narrow. Resources In developed countries, the natural and human resources are fully and efficiently consumed. Refer to Vedantu for free chapter-wise solutions and get free access to various other online resources and improve your learning in several folds. What is an Underdeveloped Economy? The economies that have high per capita income and support a high standard of living is referred to as a developed economy and, on the other hand, economies that have low per capita income resulting in a low standard of living is referred to as an underdeveloped economy.
Whatever development fakes place is swallowed up by the rising tide of population. Economic development cannot be brought about in the absence of rapid industrialization. What is the result of underdevelopment? Underdevelopment refers to the low level of development characterized by low real per capita income, wide-spread poverty, lower level of literacy, low life expectancy and underutilisation of resources etc. It is also important that developed economies are growing at a faster rate than the Indian economy and as a consequence, the disparity in the levels of income has become wider during period 1960-89. In a country like India, the undeveloped country is characterized by under or unutilized resources and there is a certain degree of co-existence. Difference Between Developed and Underdeveloped Economy The economies that have high per capita income and support a high standard of living are referred to as developed economy and, on the other hand, economies that have low per capita income resulting in a low standard of living is referred to as underdeveloped economy. Why Indian economy is regarded an underdeveloped economy? It is, therefore, quite important to understand the basic characteristics of the Indian economy, treating it as one of the underdeveloped but developing economies of the world.
In such countries resources that can fill the gap of poverty are not utilized judiciously. Natural resources are underutilised in underdeveloped economies. The order of a nation relies upon its income as well as on different variables that influence how its public live, how the economy is incorporated into the worldwide framework, and the extension and expansion of its fare businesses. The underdeveloped economy is one which has low per capita income, high rate of population growth, dependence on backward agriculture, etc as when compared to developed economy. In developing countries, many of the natural resources are still untouched and others resources are also not fully utilized.
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