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7/31/2019 Features of Less Developed Countries
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Created by:- Group 2
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IntroductionCountries that are not fully industrialized or do not
have sophisticated financial or legal systems.
These countries, also called members of the Third
World, typically have low levels of per-capita income,
high inflation and debt, and large trade deficits.
The World Bank may be helping them by providing
loan assistance.
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Features Poverty
PER CAPITA INCOME
INFLATION
ILLITERACY
AGRICULTURE AND FOOD
CORRUPTION
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PovertyPredominant poverty.
An extreme differencebetween absolute povertyand great wealth.
An extreme minority holdsthe wealth and a hugemajority are in abjectpoverty.
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Case studyLarge populations of the 420 million people living in Latin
America and Caribbean have begun the third millennium
living under conditions of poverty.Near 40% of households are poor and 16% extremely
poor .
Poverty is even more widespread and deep in rural
areas where 32% of population live and work.
Near 55% of rural households are poor and about 33%
extremely poor.
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Per Capita IncomeAn LDC economy needs toinvest 10 to 15% of netincome to grow and many
cannot manage this.
Rates of return less thanpopulation growth.
Low rates of return frustratefuture investment and leavedebt unpaid.
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Case study The Soviet invasion of 1979 destroyed much of the
country's limited infrastructure patterns of economicactivity .
Gross domestic product has fallen substantially sincethe 1980s due to disruption of trade and transport aswell as loss of labor and capital.
According to the IMF, the Afghan economy grew 20%in the fiscal year ending in March 2004, afterexpanding 30% in the previous 12 months
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inflation The overall general upward pricemovement
ofgoodsandservicesin aneconomyis called inflation. Inflation is often caused bya increase in the supplyofmoney,
usually as measured by the Consumer Price Indexand theProducer Price Index.
Over time, as the cost of goods and services increase, thevalue ofa dollar is going to fall because apersonwon'tbeabletopurchaseas much with that dollar as he/shepreviously could.
The Fed actively tries to maintain a specific rate of inflation,which is usually 2-3% but can vary depending oncircumstances. opposite ofdeflation.
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Agriculture & Food
Predominantly
agricultural (70 - 90% ofthe labour force).
Predominantly rural
population (80% urban inUK, less than 20% inLDC).
Subsistence or cashcrop based poverty.
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Insufficient quantity offood for a daily diet.
Insufficient quality offood for a daily diet.
Poor diet leaves
openness to disease,poor growth, early deathand childhood mortality.
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IllitracyEducationalprovision is
very low or inadequate foreconomic or informationneeds.
Open to disease throughlack of knowledge, e.g.
sexually transmitteddiseases.
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Inability to produceeducated workforce fortechnological growth.
Inequality and absence ofwomen's rightsundermine essential birth
control, education,resistance to custom andgood health.
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Referenceshttp://www.globalissues.org/issue/2/causes-of-
poverty.
http://www.change.freeuk.com/learning/socthink/ldcs.html.