The Least Developed Countries (LDCs)

8/14/2019 The Least Developed Countries (LDCs)

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The Least Developed Countries(LDCs)


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Note: Cape Verde was removed from the list in 2007 so is no longer a LDC (therefore there are 49)


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LDCs Since 1968 the world's poorest countries have

been classed as least developed countries. UN calls them 'the poorest and most

economically week of the developing countries

with formidable economic, institutional andhuman resource problems, which are ofterncompounded by geographical handicaps andnatural and man-made disasters'.

This list contains 49 countries: 33 in Africa (all sub-saharan)

Others in southeast Asia and a number of smallisland states in the Pacific.


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Features of LDCs:

Low incomes, measured as less than $800GDP per capita per year averaged over a 3-year period.

Human resource weaknesses: based uponindicators of nutrition, health, education levelsand literacy.

Economic vulnerability: share of manufacturingin the GDP, per capita energy consumption,and population displaced by natural disasters.


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Other Problems in LDCs:

Ongoing and widespread conflict e.g. Darfurin Sudan.

Extensive political corruption.

Lack of political and social stability. A form of government that is authoritarian in

nature, such as a dictatorship.


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Quality of Life

People live in poverty in all LDCs. A large majority of the population has an

income too small to meet their basic needs.

In 2005 it was estimated that 277 million peoplewere living on less than $1 per day.

In some cases incidence of poverty has beenfalling but the actual number has been

increasing over the long term. Still dependent on external finance.

In 2006 net aid payments reached $28 billion.


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Debt From the 1970s countries developing countries

found themselves in a dbet crises.

The problem can be attributed to: Increasing oil prices.

Higher interest rates.

Falling export prices.

Problems of domestic economic management.

No hopes of the debts being repaid and heavy

interest accumulating. By October 2007 17 LDCs were recing debt

relief under the HIPC initaitive (Heavily IndebtedPoor Countries).


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A possible path for development???

Rostow's Model


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The Rostow Model

One of the first and most simple models toaccount for economic growth.

Put forward by W.W. Rostow in 1960.

Based on a study of 15 countries, mainly inEurope.

He suggested all countries had the potential tobreak the cycle of poverty and develop throughthe five linear steps.


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Time

Level

ofDe

velopment

1. TheTraditional

Society

2. Preconditionsfor take-off

3. Take-Off

4. The drive toThe maturity

5. High massconsumption


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Stage 1: Traditional Society

Subsitence economy based mainly on farming.

Very limited technology or capital to processraw material.

No development of industries and services.


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Stage 2: Preconditons for take-off

Often needs external injection of cash to moveinto this stage.

Extractive industries develop.

Agriculture is more commecialised andbecomes mechanised.

There are some technological improvements

and a growth of infrastructure. Development of a transport system encourages

trade.

A single industry begins to dominate.


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Stage 3: Take-Off

Manufacturing industries gwo rapidly.

Airports, roads and railways are built.

Political and social adjustments are necessaryto adapt to the new ways of life.

Growth is limited to one or two parts of thecountry (growth poles) and to one or two

industries (magnets). Numbers in agricultures decline.


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Slide 4: The Drive to Maturity

Growth is self-sustaining.

Economic growth spreads to all parts of thecountry and leads to an increas in the number

and types of industry (multiplier effect). More complex transport systems develop and

manufacturing expands as technologyimproves.

Some early industries decline.

There is rapid urbanisation.


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Stage 5: The age of high mass-consumption

Rapid expansion of tertiary industries andwelfare facilities.

Employment in service industries grows but

declines in manufacturing. Industry shits to the production of durable

consumer goods.


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Approximate date of reaching a newstage of development:

Stage 2 3 4 5

UK 1750 1820 1850 1940

USA 1800 1850 1920 1930

Japan 1880 1900 1930 1950

Venezuela 1920 1950 1970 -

India 1950 1980? - -

Ethiopia - - - -


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Criticisms of Rostow's Model

Rostow suggested that capital was needed tomake countries development despite largeinjections of aid countries remailn at traditonalstage.

Countries that move towards take-off stagehave occurred huge national debts.

Historical evidence indicates this sequence isnot universal.


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ACTIVITY

Complete Rostow model 'Living Graph Activity'


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Homework

Read page 197 201

Answer questions page 201 (all parts in detail e.g. more than a page)

The Least Developed Countries (LDCs)

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