Diverse structures and common characteristics of developing countries

The North and South classification The North consists of developed countries situated in the Northern Hemisphere The South consists of the majority of countries which are less developed

Classification of developing countries Three worlds: First world is the highly industrialized, non-communist Western European nations, plus the US, Australia, Canada, New Zealand, and Japan. Second world includes the nations of Eastern Europe, former Soviet Union and PRC Third world is the term given to identify remaining countries ie. in Africa, Asia and Latin America

UN classification of the Third World least developed countries (about 44): poorest of the poor (Fourth World) to emphasize their needs for international assistance the non-oil exporting developing nations (about 88) the 13 petroleum-rich members of the OPEC

Classification of OECD Divides the Third World into: low income countries (with a 1993 per capita income less than US$650)eg. Bolivia, India, Kenya least developed countries (eg. Afghanistan, Bangladesh, Lesotho, Nepal) middle income countries eg. Colombia, Costa Rica, Malaysia, Thailand, Zimbabwe newly industrializing countries eg. Hong Kong, Singapore, Spain, Argentina, Brazil, Taiwan OPEC countries eg. Algeria, Indonesia, Kuwait, Nigeria, Saudi Arabia, Venezuela

Countries with different income levels

World bank classification of LDCs by income

Classification by UNDP starting from 1990 Human Development Index (HDI) countries are ranked high (with HDI values of 0.8 above), medium (with HDI values between 0.50.799) and low (with HDI values below 0.5) ranked more than 170 countries, however, not all countries are ranked due to the lack of comparable data.

Examples of rankings by HDI (1993)HDI RankCanada 0.951 1 22 53 89 168Real GDP pc US$

Rank7 6 42 97 173

20950 21560 8360 3030 20

Hong 0.909 Kong Malaysia 0.826 Sri Lanka 0.698 Ethiopia 0.237

Structural diversity of LDCs Size of country (geographic area, population and income) Historical and colonial background Endowments of physical and human resources Ethnic and religious composition Relative importance of its public and private sectors Nature of its production structure Degree of dependence on external economic and political forces (foreign trade, investment and aid) Distribution of power: institutional and political power within the nation (eg. Interest groups)

Production structure of selected countries (1993)90 80 70 60 50 40 30 20 10 0

Ta za ia n n In ia d Bra zil

Arg L %

In L % d

Arg Y %

In Y % d

Common Characteristics of LDCs Low levels of living, characterized by low incomes, high inequality, poor health, and inadequate education, slow growth rates of national income Indicators: real GDP or GNP per capita (using purchasing power parity exchange rate) people living in absolute poverty infant mortality rates (# of children die before 1st birthday out of 1000 live births) adult literacy rates

Correlation between GNP per capita and indicators of living standards (1991)CountryGNP/ per capita $US

Life expectancy 46 55 71 75

Infant mortality 118 83 25 8

Uganda Ghana Argentina Denmark

170 400 2790 23700

Correlation between GNP per capita and indicators of living standards (1991) Country GNP/ per capita Life expectancy $US

China Brazil Saudi Arabia

370 2940 6200

69 66 64

Per capita income and inequality

Country

GNP/capita $US

Lowest 40%

Top 20%

(percentage of national income)

Brazil 1989 Tanzania 1991

2940 100 22240

7 8 16

67.5 63 42

US 1985

In fa n t m o r ta lity c h ild r e n u n d e r 5450 400 350

T o ta l n u m b e r o f p e o p le in L D C s liv in g o n le s s $ 1 a d a y in m illio n s (e x c lu d in g C h in a )1000 980

deaths per 1000

300 250 200 150 100 50 0

1960 1994

960 940 920 900 880 860

T o ta l o f L D C s (e x c lu d in g C h in

Ma li

Afg han ista n

Eth iop ia

Ho ng Ko ng Ge rm any

Bra zil

Nig er

UK

840 820 1987 1990 1993 1996 1998

In fan t morta l ity fo r 19 97 , Un i tsN o . o f c o un t rie s in ra ng e

T o ta l o f L D C s p o p u la tio n livin g o n le ss th a n $2 a d a y i m illio n s (e x c lu d in g C h in a ) - W o rld b a n k

5 16 18 12 1 0

1 5 .0 - 4 6 .0 4 6 .0 - 7 7 .0 7 7 .0 - 10 8 .0 10 8 .0 - 13 9 .0 13 9 .0 - 17 0 .0 Da ta No t ava ilable

2 ,5 0 0 .0 0 2 ,0 0 0 .0 0 1 ,5 0 0 .0 0 1 ,0 0 0 .0 0 5 0 0 .0 0 0 .0 0Ex it

T o t al o f L DC s p o p u lat livin g o n le s s th a n $2 d ay (e xc lu d in g C h in a)

1987 1990 1993 1996 1998

Low levels of labour productivity (due to law ofdiminishing marginal productivity or work attitudes or poor health & education)

High Rates of population growth and dependency burdens (eg. Crude birthrate: 10 - Hong Kong, Austria 30 - Philippines, Venezuela 50 - Uganda, Afghanistan

High and rising levels of unemployment and underemployment Substantial dependence on agricultural production and primary-product exports Dominance, dependence and vulnerability in international relations

Average Annual Population Growth Rates by Country Income Group, 1980-2010

Composition of Population in Low- and High-income Economies, 1995

In many low-income countries, the large difference between the percentage of people of childbearing age causes population momentum which keeps population growth rates high even when fertility rates drop. In many high-income countries, where fertility rates are below replacement level and the largest segments of the population are older, populations will increase much less.

Structure of productionDistribution of GDP % Country Tanzania Somalia Thailand GermanyPer capita GDP

Agricultu re

Industry 12 9 39 38

Services 29 26 48 60

110 120 1420 22320

59 65 12 2