DEVELOPMENT

Objectives of Development

• The objectives:– To increase the availability and widen the

distribution of life-sustaining goods.– To raise the standard of living.

• This include economic needs: higher incomes, more jobs, and material needs.

• Non-economic needs: better education, knowledge and spiritual fulfillment.

– To expand the range of economic and social

choice.

Objectives of Development

• The key aim of development is to enable people to lead better a life.

• The 3 key aspects of a better life are: i. Sustenance.

The ability to meet basic needs.ii. Self-esteem. To be a person.iii. Freedom from servitude. To be able to choose.

• Primarily concerned with the efficient, least-cost allocation of scarce productive resources over time so as to produce an ever-expending range of goods and services

Social and institutional processes

Power of economic decision making.

• Which is bring about rapid and large-scale improvements in bring levels of living for masses.

Social effect Social effect

Bring the fruits of economic progress to broadest segment of the population.

So that, it requires a larger government role and some degree of coordinated economic decision- making to transform economy.

Objectives of development

Indicators of development

- To quantify and track the course of development

Class of indicators

Economic indicators

Social indicators

Science and technology level

why?

Economic IndicatorsGNP – Gross National Product

GDP – Gross Domestic Product

PPP – Purchasing Power Parity

Sum of all goods and services produced by the factors of production owned by citizens of a nation.

Sum of all goods and services produced in the territory of the nation, regardless of who own the means of production that generate the goods or services.

A method of measuring the relative purchasing power of different countries’ currencies over the same types of goods and services.

40 years GNP per CAPITA

In 1998 : Countries with low GNP per capita tend to be located in Sub-Saharan Africa and parts of Asia.

Countries with high GNP per capita tend to be located in Europe, North America and parts of Asia.

Facts to know…

Generally, people living in countries with higher GNP per capita tend to have longer life expectancies, higher literacy rates, better access to safe water, and lower infant mortality rates.

Since 2001, the World Bank refers to the GNP as the GNI (gross national income).

GDP FORMULA

GDP = R + I + P + SA + W

R = rentsI = interestsP = profitsSA = statistical adjustments (corporate income taxes, dividends,undistributed corporate profits)W = wages

When is GDP > GNP

- When substantial portions of the local economy are foreign-owned.

- Income earned within a country goes to foreigners.

- GDP may look healthy but GNP may well be anemic

- This undesirable since control is ceded to foreigners

PPP of GDP for the countries of the world (2003). The US is the base country, so it is 100. The highest index value, for Bermuda, is 154, so the same goods are 54% more expensive in Bermuda than in the United States.

Social Indicators

Chart 1: Total World Population by Country Income Group, 1980, 1998, 2015

Population growth rate (PGR)

Measures the increase in a country’s population and reflects the number of births and deaths and people migrating into and out of the country.

Social Indicators cont..

Ability to read and writeStudent enrollment Degree level and above

Life expectancy at birth Infant mortality rate Density of doctors

Things that are produced by a country's economy.Eg (good): food, clothing, machines, and new roads. Eg (service): doctors, teachers, and engineers,

Indicators Literacy

Health

Goods and Service

Science and Technology Indicators

Indicators

Patents

Trademark

Copyrights Legal conceptGive exclusive rightsEg: KIA give manufactured authority to NAZA.

An exclusive right granted for an invention.Eg: Proton [waja, Persona, Saga]Register under IP organization,

(Intellectual Property Corporation of Malaysia)

An indicator of some kind in order to recognize their product or identity.Eg: -Malaysia trademarks is the tallest twin tower building in the world which is Petronas Twin Tower, -national car maker, Proton, -ERL, LRT

Developing Countries

Developing Country

Inconsistent varying human development index (HDI) score and

per capita income

Country with low average income compared to the world average.

Undeveloped or developing industrial

base

Developing CountryIn general

Not achieved a significant degree of

industrialization relative to their populations

Have a low standard of living

High income      Upper-middle income      Lower-middle income      Low income

Industrialization

•Industrialization is a process of social and economic change whereby a human group is transformed from a pre-industrial society into an industrial one

•It is a part of a wider modernization process, where social change and economic development are closely related with technological innovation, particularly with the development of large-scale energy and metallurgy production

Standard of living

•Refers to the quality and quantity of goods and services available to people, and the way these goods and services are distributed within a population.

•Generally measured by standards such as income inequality, poverty rate, real income per person.

•Other measures such as access and quality of health care, educational standards and social rights are often used as well.

Measure of development

• The term 'developing country' often refers mainly to countries with low levels of economic development.

• Usually closely associated with social development, in terms of education, healthcare, life expectancy.

• Development of a country is measured with statistical indexes such as income per capita (GDP), the rate of literacy, and access to water.

• There is a strong correlation between low income and high population growth.

Technology Development

• For long term effectiveness, technology transfer should always be accompanied by science transfer.

• Science and technology awareness does not necessarily make it easy to develop, and popularize science. Inadequate scientific infrastructure is a critical factor which creates strong barriers to the path of advancement in developing countries.

• In summary, the social and economic growth of the developed countries is dependent on an essential emphasis on education, science, and technology. The basic problems of developing countries are the weak educational and scientific infrastructure, and a lack of appreciation of the importance of science as an essential ingredient of economical and social development.

Newly industrialized country

• Newly industrialized country (NIC) is a socioeconomic classification applied to several countries around the world by political scientists and economists.

• Countries whose economies have not yet reached first world status but outpaced their developing counterparts.

• Countries undergoing rapid economic growth (usually export-oriented). Incipient or ongoing industrialization is an important indicator of a NIC.

Newly industrialized country NICs usually share some other common features, including:

•Increased social freedoms and civil rights.•Strong Political Leaders•A switch from agricultural to industrial economies, especially in the manufacturing sector.•An increasingly open-market economy, allowing free trade with other nations in the world.•Large national corporations operating in several continents.•Strong capital investment from foreign countries.•Political leadership in their area of influence.