Eugene D.

Alipio
ECOPE05: Economic Development Online
MR. FRANCIS A. GUMAWA

Read and answer the following questions below.

1. What are some common characteristics of LDCs? Which of these characteristics

are causes and which accompaniments of underdevelopment?

 Low per capital income and widespread poverty- The most important
indicator of economic backwardness is per capita income. Per capita GNP of
LDCs is very low.
 Shortage of capital- In LDCs like India, there is a shortage of capital of all
varieties. There is shortage of not only private capital like structure,
factories, steel mills, etc., but also shortage of social overhead capital such as
roads, highways, railroads, hospitals, schools, etc.
 Population explosion and high dependency- Another major characteristic of
LDCs is the high rate of growth of population. The population bomb has
exploded in most such countries.
 Massive unemployment- Another important characteristic of LDCs is the
existence of a considerable amount of unemployment, underemployment, and
disguised unemployment. Traditional agricultural sector cannot cope with
the rising population.
 Predominance of agriculture- An underdeveloped economy is predomi-nantly
an agrarian economy. Predominance of agriculture is viewed from two angles
first is the contribution of this sector towards national income. Another
feature of an LDC is low productivity of land, labour and capital. The
productivity of land is low for various reasons institutional, technological,
and natural. Productivity of labour is also low for various reasons.
 Unproductive investment- It is anybody’s knowledge that due to massive
poverty people have very little power to save in LDCs.
 Low levels of productivity- Another feature of an LDC is low productivity of
land, labour and capital. The productivity of land is low for various reasons
institutional, technological, and natural. Productivity of labour is also low for
various reasons.

They need Energy, climate change, resource scarcity, demographics, economic

rebalancing. Policymakers in every country now have to take account of these
factors, seeking to ensure that economic policy for a particular country will deliver
societal outcomes which reflect global connectivity and interdependence.
2. How might today’s LDCs differ from those of the 1950s?

More of today's LDC have gained independence and have their own political
system. The dual economy still exists in low-income economies, but increasingly the
modern sector is domestically owned and managed. Real GNP per capita is much
higher today than in 1950.

Today’s middle-income economies have better developed economic and

political institutions, a higher proportion of output and the labor force in industry
and services, less dualism, higher levels of technology, less dependence on primary
commodities, slower population growth, higher literacy and school enrollment rates,
a more skilled labor force, and probably higher savings rates than most LDCs in the
1950s.

3. How might a list of common characteristics of low-income countries vary from

that of LDCs as a whole?

LDCs as a whole have better developed economic and political institutions, a

higher proportion of output and the labor force in industry and services, less
dualism, higher levels of technology, less dependence on primary commodities,
slower population growth, higher literacy and school enrollment rates, a more
skilled labor force, and higher savings rates than low-income economies.