Developed and developing countries (continuation)

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Developed and developing countries

There are some five billion people in the world, and the jamority of them live in what are described as less developed countries or developing countries. A developing country is one in which the average standard of living is very low compared with living standards in North America and Western Europe. The low-income developing countries are often described as Third World countries.

Countries which have high standards of living – mainly industrialized countries – are described as developed countries.

Probably the most striking feature of the world economy is the very great difference between the average incomes of people in the developed countries and those in developing countries.

The table below shows how very unequally world income is distributed:

Developing countries

Low-income countries

GNP per head is less than $ 400.

The total population in these countries is about 3 billion.

They are very much concentrated in Asia, Africa and South America.

Examples:

Middle-income countries

GNP per head is between $ 400 and $ 5000.

The total population in these countries is about 1 billion.

Examples:

Developed countries

GNP per head is more than $ 5000.

The total population in these countries is about 800 million.

Examples:

The table shows that nearly half of the world’s population lives in countries where the average annual income per head is $ 400 or less.

The richer countries contain about 25 per cent of the world’s population but they produce about 75 per cent (by value) of the world’s output.

Major economic problems

Major problems facing developing countries are as follows:

• Low-productivity agriculture

In low-income countries, 70 % or more of the labor force works on the land. Tractors and other types of mechanical farm equipment are very scarce. The output per worker in agriculture is extremely low compared with that in Europe and North America.

• Poor natural resources

Many developing countries have very poor supplies of natural resources. Many of them have soil lacking in fertility, large desert areas and climates which are not favorable to high productivity because they are too dry or too hot. Some developing countries though have been fortunate enough to possess valuable mineral deposits such as oil.

• A shortage of capital

Most developing countries lack electricity supplies, water supplies, transport and farming equipment, good roads and railways, port facilities and other capital goods. They have very little modern technology.

• Large-scale unemployment

In developing countries, the rapid growth of population has been accompanied by a large-scale movement of people from the rural areas to the towns and cities. this has created serious unemployment problems, especially among the younger age groups. Underemployment is also a serious problem. For example, ten people may be employed in a job for which only six are needed.

• Population growth

In the great majority of developing countries, the rate of population growth is very much higher than it is in developed countries. This means that it is difficult for them to achieve increases in GNP per head. The graphs below show why population growth rates are high in developing countries and low in developed countries.

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1. Low-income countries are called ________________ countries.
2. Countries of high standard of life are called _________________ countries.
3. World income is distributed _____________________.
4. Low-productivity ______________ is one of the major problems which most developing countries ______________.
5. In low-income countries 70 % of the _________force works on the land.
6. In developing countries the equipment is _____________
7. The _____________ per worker in agriculture is low compared with that in Europe.
8. Many developing countries have poor _____________ of natural resources. For example, soil lacking in _______________, large __________ areas and _____________ climate.
9. Some developing countries are ____________ because they ____________valuable mineral ______________ such as coal.
10. Another problem which developing countries face is large-scale ______________.
11. The rapid growth of population has been accompanied by a large-scale movement of people from the ______________ areas to the towns and cities.
12. _________________is also a serious problem.

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