Problems Faced by Underdeveloped Countries - Essay Example

Underdeveloped Countries Introduction To be underdeveloped is to not reach the maximum maturity level. Usually, it is the ‘economic underdevelopment’that becomes a critical problem. It includes lack of health care, food, shelter, education, employment opportunities and even drinkable water. This means that underdeveloped countries do not have the basic crucial necessities of human life let alone resources for progress. The main sign of an underdeveloped country is that the resources available are not being exploited to their maximum socio-economic potential. There is a major disparity between the income levels in such countries – people are either too rich or just too poor. Some basic examples of underdeveloped regions are Asia, Africa and Latin America. Bangladesh, Bhutan, Nepal, Myanmar, Somalia and Cambodia are some countries that fall into this category. (Gerard Chaliand, n.d) Problems Faced by Underdeveloped Countries Different countries generally face different problems depending upon the level of development and progress made by the country. Naturally, the ones that are developed will face a lesser number of problems and also of a different kind. Underdeveloped countries are bound to face a mountain of difficulties and of a severe kind. The characteristics of an underdeveloped country are actually what its problems are. The basic challenges faced by people in underdeveloped countries are the unavailability of shelter, clothing, food, health services and even water for every person living. This is due to large populations and little resources. Educational standards are very low – lack of qualification means unemployment. Plus, there is a lack of funds with the government that can be spent on health services and other welfare of the people. Technologically speaking, these countries are almost close to nil. (Poverty in Underdeveloped Countries—The Poorest of the Poor - The Poor In Africa, n.d) Firstly, we have the problem of the lack of resources. Not only is there a lack but there is only a specific type of resource available. Most underdeveloped countries are agricultural economies; that is, they earn by selling primary goods such as tea, wheat, cotton etc. These goods, no doubt, have a huge market but they are not as helpful in progression a country as are industrial and manufacturing goods. Developed countries mainly depend on the export and import of manufacturing goods, also known as, capital goods – these are machineries that enhance the efficiency and production of consumer goods. The usage of these machines in a country helps augment living standards. It is clearly obvious that the living standards of underdeveloped countries are way below other countries. (McDormit, 2007) Living standards is another problem that actually measures the growth of the country in a way. Underdeveloped countries have a problem of overpopulation – almost 70 percent of the world’s population is from the third world countries (Chaliand, n.d). Due to such a high population, it is natural for the resources to fall short – the supply is less than the demand. With increasing population, the demand for necessities keeps rising. According to the basic principle of demand, high demand results in the prices shooting up. As the world is based on the survival of the fittest, only the ones who can afford to pay such a high price are able to consume it while the rest stay deprived. Price This gives birth to another one of the biggest problems on underdeveloped country – income inequality. The poor becomes poorer and the rich gets richer - Only the higher classes of people who are educated and blessed with not only necessities but luxuries, own or work in industrialized firms to earn profits. Poverty stricken individuals are deprived of education because of which they cannot be employed to good positions in big companies. Thus, they can only do clerk-jobs and stay poor for the rest of their lives. The affordability or purchasing power of these poor people keeps reducing day by day with increasing inflation (rising prices). Therefore, technically, they keep becoming poorer. Underdeveloped countries basically run on foreign aid. The conclusion of the 1971 United Nations Conference on Trade and Development (UNCTAD) held in Dehli was that only 1 percent of the national income of developed countries should be given as aid to the underdeveloped countries – this was never followed. (Chaliand, n.d) Economic Growth and Underdeveloped Countries Economic growth is the increment in the output of the goods and services produced in an economy – increase in productivity. It is measured in terms of real GDP (Gross Domestic Product) – the market value of the all the goods and services produced in an economy over a given period of time (usually a year) within the geographical boundaries. Economics growth is measured as “real” – adjusted for inflation and other changes. It shows that the economy is operating at ‘full employment’ (all resources fully exploited), increase in aggregate demand in the economy, and increase in production and efficiency. However, with increasing economic growth, income disparity will increase and weaken the economy again. Also will it give emergence to materiality and a need for luxuries – this will increase consumerism, which will be a drawback for the capital production. Capital goods hint that for the future to have ample of consumer goods, the consumption of consumer goods in the present need to be reduced. Growth scarifies the quality of life; example, environment – such things cannot be traded. On the other hand, growth has its advantages as well. With increasing output, there is a need for more labour; indirectly, there are more employment opportunities available. Most importantly, the national income increases as the aggregate demand rises. If the national income increment is uninterrupted, the country might even cross the underdevelopment circle and move on to becoming a developing nation. Technological advancements can be made use of by investing part of national income in R&D – this will raise living standards and will provide firms with mechanized and advanced production methods. Conclusion The analysis proves that a country cannot cross the barrier between underdeveloped and developed countries unless it has thorough economic growth. Economic growth and a rise in the country’s national income can help eradicate problems such as shelter, food, clothing, employment and education. Therefore, we can conclude that for Latin America and Africa to be able to compete with the US, Canada and UK; development in a must. Works Citied 1. Gerard Chaliand (N.D); THIRD WORLD: Definitions and descriptions; Third World Traveler < http://www.thirdworldtraveler.com/Travel/Def_Third_World.html> 2. Poverty in Underdeveloped Countries—The Poorest of the Poor - The Poor In Africa (N.D) 3. McDormit (2007), What are the problems of underdeveloped countries? < http://www.blurtit.com/q151886.html> 4. Ragnar Nurkse, Problems of capital formation in underdeveloped countries,: And Patterns of trade and development Read More