The term developing economy is used to refer to countries such as India, Pakistan and Bangladesh, which are economically backward as compared to developed countries. They have much to achieve in terms of economic growth and development. They lag behind the developed countries such as US and UK on account of many reasons which shall be highlighted in this article.
The levels of economic development do vary among the developing countries so there cannot be a prescribed criteria for deciding which countries are in the developing stage. Compared to the developed counties they are far behind in technological and other sectors.
The World Bank defines low as well as middle income countries as “developing”. Much would depend upon how much Gross National Product (GNP) they generate.
What are the facets of developing economy?
- Economically backward – The developing countries are economically poor and are unable to feed their population or meet their daily requirements of food, shelter and good health.
- Low per capita income – The per capita income is very low. The purchasing power of the people is very low. They are unable to buy good clothes and have better standard of living for themselves.
- Lower levels of national income – The national income levels are also low. The earnings earned from various sectors are not very high.
- Technologically backward – The technical know-how is not very advanced as compared to developed countries. Of course, countries such as India are making much advance in this sphere of activity also, yet it has a long way to go.
- High rate of population growth – Developing countries have a high population on account of which their economic growth is slower. They have to feed more people when compared to developed countries, which have lower levels of population.
- Poverty – There are large number of poor people living in these developing countries on account of the hugh population. Some of them live in abject poverty.
- Lower levels of investment – Industrial growth is at slower pace and level of investment is not very high in developing countries.
- Dependent on foreign aid – The developing countries receive international aid from developed countries to improve their economic conditions.They succumb to the domination of the developed countries.
- Inflation – Inflation rate is high in these countries. Since economic growth is slow and the general production output is also not very high, goods and service are available at a higher cost.
The developing countries or economies have too much to achieve in the sphere of industrial and agriculture sphere. They have to make tremendous efforts to feed their millions of people.