Economic Development (Research report)

The Structural diversity of developing economies

Any portrayal of the structural diversity of developing nations requires an examination of eight critical components:

1. the size of country(geographic area, population, and income ).
2. its historical and colonial background
3. its endowments of physical and human resources
4. its ethnic and religious composition
5. the relative importance of its public and private sector
6. the nature of its industrial structure
7. its degree of  dependence on external economic and political forces
8. the distribution of power and the institutional and political structure within the nations

let us briefly consider each component focusing on some similarities and differences among countries Africa, Asia and Latin America.  

1: Size and income level

 obviously, the sheer physical size of a country, the size of its population, and its level of national income precipitate are important determinants of its economic potential and major factors differentiating one developing nation from another. Of the 160 developing coutries that were full members of the United Nation in 2000, 87 had fewer than 5 million people, 58 had fewer than 2.5 million, and 38 had fewer than 500,000. Large and populated nations like Brazil, India, Egypt, and Nigeria exist side-by-side with small countries like Paraguay, Nepal, Jordan, and Chad. Large size usually presents advantages     of diverse resource endowment large potential markets, and a lesser dependence on foreign sources of materials and products. But it also creates problems of administrative control national cohesion, and regional imbalances. As we shall see in Chapter 6, there is no necessary relationship among a country’s size, its level of per capita national income, and the degree of equality or inequality in its distribution of that income. For example, India with a 2000population of 1,016 million, had a 2000 prier capita income level of $460, while nearby Singapore, with only 4 million people, had a 2000 per capita income of $24,740

2: HISTORICAL BACK GROUND

Most African and Asian nation were at one time or another colonies of Western European countries, primarily Britain and France but also Belgium, the Nether-land Germany, Portugal, and Spain. The economic structures of these nations, as well as their educational and social institutions, have typically been modeled on those of their former colonial rulers Countries like those in Africa that only recently gained their independence are therefore likely to be more concerned with consolidating and evolving their own national economic and political structures than with simply promoting rapid economic development.

            Perhaps more important, the European colonial powers had a dramatic and ling-lasting impact in the economies and political and institutional structures of their African and Asian colonies by their introduction of three powerful and tradition-shattering ideas: private property, personal taxation, and the requirement that taxes be paid in money rather than in kind. As we will discover later, these ideas combined to erode the autonomy of local communities and to expose their people to many new forms of potential exploitation. the worst impact of colonization was probably felt in Africa, especially if one also considers the earlier slave trade. While in former colonies such as India local people played a role in colonial governance, in Africa most governance was administered by expatriates.

            In Latin America, a longer history of political independence plus a more shared colonial heritage (Spanish and Portuguese has meant that in spite of geographic and demographic diversity, the countries possess relatively similar economic, social, and cultural institutions and face similar problems. In Asia, different colonial

Heritage and the diverse cultural traditions of the indigenous peoples have combined to create different institutional and social patterns in countries such as India (British), the Philippines (Spanish and American), Vietnam (French), Indonesia (Dutch), and Korea (Japanese).

             

3: PHYSICAL AND HUMAN RESOURCES

A country’s potential for economic growth is greatly influenced by its endowments of physical resources (numbers of people and their level pf skills). The extreme case of favorable physical resources endowment is the Persian Gulf oil states. At the other extreme are countries like Chad, Yemen, Haiti, and Bangladesh, where endowments of raw materials and minerals and even fertile land are relatively minimal. (However, as the case of Congo shows vividly, High mineral wealth is no guarantee of development success.) Geography and climate can also play an important role in the success or failure of development efforts. Island economies like Taiwan seem to do better than landlocked economies, and temperate zone countries do better than tropical zone nations, all other things being equal.

            In the realm of human resource endowments, not only  are sheer numbers of people and their skill levels important, but so also are their cultural outlooks, attitudes toward work, access to information, willingness to innovate, and desire for self-improvement. Moreover, the level of administrative skills will often determine the ability of the public sector to alter the structure of production and the time it takes for such structural alteration to occur. This involves the whole complex of interrelationships between culture, tradition, religion, and ethnic and tribal fragmentation or cohesion thus the nature and character of a country’s human resources are important determinants of its economic structure and these clearly differ from one region to the next.

4: ETHNIC AND RELIGIOUS COMPOSITION

One of the direct benefits of the end of the 45-year cold war between the United States and the former Soviet Union has been a substantial decline in foreign military and political presence in the developing world. An indirect cost of this with drawl, however, has been the acceleration of ethnic, tribal, and religious conflict, such as in the violent disintegration of Yugoslavia. Although ethnic and religious tensions and occasional violence have always existed in LDCs, the earning of superpower influence triggered a revival of these internal conflicts and may even have accelerated the incidence of political and economic discrimination. Ethnicity and religion often play a major role in the success or failure of development efforts. Clearly, the greater the ethnic and religious diversity of a country, the moue likely it is that there will be internal strife and political instability. It is not surprising, therefore that some of the most successful recent development experiences south Korea, Taiwan, Singapore, and Hong Kong have occurred in culturally homogeneous societies.

            Today more than 40% of the world’s nations have more than five significant ethnic populations. In most cases, one or more of these groups face serious problems of discrimination. Over half of the world’s LDCs have recently experienced some form of interethnic conflict. Just in the 1990s, ethnic and religious conflicts leading to widespread death and destruction took place in Afghanistan, Rwanda, Mozambique, Sri Lanka, Iraq, India, Somalia, Ethiopia. Liberia, Angola, Myanmar, Sudan, Yugoslavia, Haiti, Indonesia, and Zaire (now renamed the Democratic Republic of Congo). Moreover, descendents of African slaves brought forcefully to the western hemisphere continue to suffer pernicious discrimination in countries such as Brazil.

            But neither overt physical conflict nor widespread violence is necessary to disrupt an economy or cause political instability. If development is about improving human lives and providing a widening range of choice to all peoples, racial, ethnic, caste, or religious discrimination can be equally pernicious. For example, throughout Latin America, indigenous populations have significantly lagged behind other groups on almost every measure of economic and social progress. Whether in Bolivia, Brazil, Peru, Mexico, Guatemala, or Venezuela, indigenous groups have benefited little from overall economic growth. To give just on illustration, almost 90% of Guatemala’s native population is poor, compared to  50% of the population. Being indigenous makes it much more likely that an individual will be less educated, In poorer health, and in a lower socioeconomic stratum than other citizens. This is particularly true for indigenous women.