Transcript Growth & Less Developed Countries

Growth & Less
Developed
Countries
The International Economy
IACs
LDCs
• GDP among top 27 in the
world
• Market economy based
on technological
advancement
• Well-educated labor
• ≈ 150 countries with low
GDP
• Economy based on
agriculture
• Uneducated labor
GDP per capita Value of final
goods produced/total population
• Poorest regions are S Asia and Sub-Saharan Africa
LDCs
Quality-of-Life Indicators for Selected
Countries, 2009
Country
Life
Infant
Per Capita
Economic
GDP per Expectancy Mortality Literacy Energy
Freedom
Capita
(years)
Rate (%) Rate (%) Consumption Rank
United States
46,443
78
8%
99%
7,768
8
Japan
39,573
83
4
99
4,129
27
China
3,566
73
22
81
1,433
93
Egypt
2,450
71
36
71
843
75
India
1,033
65
72
61
510
77
Bangladesh
559
64
61
43
161
108
Mozambique
456
42
168
48
420
116
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Abundant natural resources
Investment in human resources
Accumulation of capital
Technological progress
Political stability
Economic
Growth/Development
• The trap in which countries are poor because they cannot
save and invest, but they cannot save and invest because
they are poor
Vicious circle of poverty
• Law & Order: legal system, monetary value, property
ownership
• Infrastructure: transportation, communications, and
education system
• International Trade: market exchange rates
LDC Governments Need to
Stabilize to Attract
Foreign Investment
• Agency in charge of U.S. aid to foreign countries
• 1% of U.S. budget is spent on aid to foreign countries
AID
• Lending agency that makes long-term, low-interest loans
and provides technical assistance to LDCs
World Bank
• The lending agency that makes short-term conditional
loans to developing countries
IMF