Post on 11-Jan-2016
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Growth & Less Developed CountriesThe International Economy
GDP per capita Value of final goods produced/total population
IACs
• GDP among top 27 in the world
• Market economy based on technological advancement
• Well-educated labor
LDCs
• ≈ 150 countries with low GDP
• Economy based on agriculture
• Uneducated labor
LDCs
• Poorest regions are S Asia and Sub-Saharan Africa
Quality-of-Life Indicators for Selected Quality-of-Life Indicators for Selected Countries, 2009Countries, 2009
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
Bangladesh 559 64 61 43 161 108
India 1,033 65 72 61 510 77
Egypt 2,450 71 36 71 843 75
Mozambique 456 42 168 48 420 116
CountryGDP per Capita
Life Expectancy
(years)
Infant Mortality Rate (%)
Literacy Rate (%)
Per Capita Energy Consumption
Economic Freedom Rank
Economic Growth/Development
• Abundant natural resources
• Investment in human resources
• Accumulation of capital
• Technological progress
• Political stability
Vicious circle of poverty
• The trap in which countries are poor because they cannot save and invest, but they cannot save and invest because they are poor
LDC Governments Need to Stabilize to Attract Foreign Investment
• Law & Order: legal system, monetary value, property ownership
• Infrastructure: transportation, communications, and education system
• International Trade: market exchange rates
AID
• Agency in charge of U.S. aid to foreign countries
• 1% of U.S. budget is spent on aid to foreign countries
World Bank
• Lending agency that makes long-term, low-interest loans and provides technical assistance to LDCs
IMF
• The lending agency that makes short-term conditional loans to developing countries