Development Economies

Promoting Economic Development

If a country is unable to develop its economy, then it will remain dependent on its ability to secure aid from developed countries. Eventually the generosity of developed economies will run out if it is perceived that the country receiving the aid is making no effort to move towards a situation in which they are self-sustaining. For example, the government of North Korea has found it more and more difficult to access the food and fuel that they need in order to sustain the population. This has forced the government into a situation where they have started to advertise the “benefits” of eating only two meals a day. This will undoubtedly have long term ramifications for the health of the North Korean people.

It is certainly true that developing countries face enormous obstacles when it comes to promoting economic development. A short list of these obstacles would include:

Young soldiers involved in the civil war in Somalia

1. War: It is very difficult for a country to focus on economic development when a large proportion of the available resources are used for war. This could be a civil war (such as the war in the Sudan that formally ended in 2005, or the war in Somalia), or a war with another country (such as the ongoing problems in Afghanistan).

2. AIDS: The AIDS epidemic is particularly strong in some developing countries. A lack of education and poor health infrastructure combine to make the spread of AIDS far more likely. For example, in South Africa the onset of AIDS has meant that life expectancy has fallen from 61 years to 48 years since 1990.

3. Taxation: In developed countries, the taxation system is used to promote economic development. But this system only works because a large percentage of people are working, and they are part of the market system. In developing countries there are often more unemployed people than people with jobs, which makes it impossible for the income tax collections to properly support all of those who need it.

4. Natural Disasters: Sometimes events occur that push a country’s economic development backwards. Drought in some parts of Africa, or the tsunami that devastated Samoa in October 2009 are examples of this.

Despite these obstacles, promoting economic development is vital. For many years after the end of the Korean War, South Korea was identified as a developing country. In more recent years, South Korea has more often been classified as a newly developed country. GDP per capita is now more the US$19,000 per year, which places it 36^th in the world. This is much higher than either Malaysia or Taiwan, and only slightly behind New Zealand. As a result of this change, South Korea is now able to operate without the need to call on foreign aid. In fact, the people and government of South Korea have moved to the opposite end of the spectrum; they provide foreign aid to other countries – notably, North Korea.

All of this suggests that it is worth taking the time to promote economic development in those areas that are currently struggling. Although there will always be obstacles, history has shown us that even very small countries (like Singapore), or countries that have struggled with devastating wars (like South Korea and Japan) and even economic regions that operate without being recognised by the international community as a separate country (like Taiwan) can succeed. This success can lead to much higher living standards for the people living there.

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