Characteristics of an Under-developed Economy
Characteristics of an under-developed economy
The general nature of a developing economy may be gathered from the general economic characteristics of such an economy.Though it is pretty much hard to locate a representative under-developed nation, it is much easier to bring out some fundamental characteristics common to under-developed countries, which are discussed below:
Low per capita Income
Under-developed nations have extremely low per capita income.Comparatively the average per capita income of nations like India, Pakistan and Sri Lanka is just about 240-300 dollars as compared to 11360 in the United States of America. Per capita income is one of the prominent features that measure the development of a nation.
Deficiency of capital Equipment
The inadequate amount of physical capital in existence is also a significant feature measuring the development of a countries economy.
Excessive dependence on agriculture
Agricultural dependence is one prominent characteristics highlighting an underdeveloped economy. The majority of people normally 60-80 percent are reliant on farming and related jobs. Over dependence on agriculture implies that the rates on non-agricultural occupations haven’t developed at the rate equivalent to the rise in population.
Rapid population growth rate
Even though there is diversity amongst under-developed economies in reverence of their population, there emerges to be a widespread characteristic, specifically a quick rate of their population increase. This growth rate has been growing still more in current years, thanks to the development in medicinal sciences which have significantly reduced the death owing to epidemics and illness. Even as the mortality rate has thus reduced incredibly, birth rate does not yet show any important decrease so that the natural survival rate has grown to be much larger.
Unemployment and under employment
A significant result of rapid rate of inhabitant’s expansion an equivalent boost in the intensity of economic growth is that there is a large-scale unemployment in metropolitan regions and disguised unemployment in countryside regions. More and more inhabitants are thrown on land, since substitute occupations do not build up concurrently to absorb superfluous population. It implies that there are more persons occupied in agriculture than are in reality required, so that the addition of such individuals does not add to land’s efficiency. Even if a number of of the individuals are removed from land, no fall in productivity will follow from such a withdrawal.