Economic

Development Prepared by:

Jen Imee Dioneda
Instructor, Department of Economics
Presentation
Real Concept of Economic Development

Outline What is Development?

Basic Economic Problems
Classification of Countries
Development and Growth
Growth without Development
The Objectives of Development
Philippine Development Objectives
Obstacles to Development
Stages of Economic Growth
What is Development?
“Development can be seen . . . as a process
of expanding the real freedoms that people
enjoy.” – Amartya Sen, Nobel laureate in
economics

“Under necessaries, therefore, I

comprehend, not only those things which
nature, but those things which the
established rules of decency, have rendered
necessary to the lowest rank of people.” —
Adam Smith, The Wealth of Nations
What is Development?
Development is a process where nations
achieve higher standards of living,
happiness, and fulfillment often through
economic growth.

Development is a progressive process. It

involves the interaction of different factors.
It is progressive progress of improving
human conditions such as the reduction or
elimination of poverty, unemployment,
illiteracy, inequality, disease, and
exploitations.
 Scarcity of resources is a problem that always confronts the

Basic
production of goods and services. But while the availability of
resources is limited, human wants are insatiable. That is when

Economic

economics comes in to harmonize human wants with what he has.

There are three fundamental economic questions that society
is confronted with. Each society is faced with these basic
Problems problems upon which the answers depend upon the type of
economic system that it is using.

1. What to produce? - refers to the kinds of

goods and services that society needs to
produce.
2. How to produce? - refers to the combination
of various resources and techniques to be used
in production.
3. For whom to produce? - refers to how to
divide up what has been produced among
consumers of an economy.
 Classification of Countries

The economy of a country is measured by its Gross National

Product (GNP) or per capita income.

Two-thirds of the countries of the world are poor. Millions of

people in these places live on income averaging $70 a year. As of
1976, there were 34 low-income countries in the world. Bhutan, a
country near India, had a per capita income of $70 per annum
 Classification of Countries

In the past, poor countries were called backward nations. This

offended the sensibilities of the country’s concern, so they were
named as developing nations which was more pleasant. At
present, they are commonly called less developed countries (LDC)
or Third World Countries.

Countries that have advanced, industrial, or developed

economies are rich countries like Japan, Germany, and United
States. Those countries whose economies are between highly
developed and less developed are called intermediate
countries/economies.
Development and Growth
Is economic development the same with economic growth?
Which comes first, development or growth?
Development and Growth
Development and Growth
Is economic development the same with economic growth?
Which comes first, development or growth?

Development is progressive and dynamic progress. Growth is

the result of a process. Therefore, growth is the product of
development.
Economic growth is visible and measurable.
Economic development does not stop and it has to create more
and better goods and services in the long run. Economic
development embraces a series of economic growths thus earlier
economic growth helped subsequent economic development.
Growth without Development
It is possible to attain economic growth without development, i.e.,
an increase in GDP, but most people don’t see actual
improvements in living standards. This could occur due to:

Economic growth may only benefit a small percentage of the

population
Corruption
Environmental problems
Congestion
Production not consumed
Military spending
 Philippine Development Objective

According to former Prime minister Cesar Verata, the government

has been committed to attaining the three basic objectives which
are concerned with:

1. The attainment of economic stability;

2. Equitable distribution of the fruits of economic development;
and
3. The achievement of total human development for every
Filipino.
 Obstacles of Development

There are many formidable obstacles that stand on the path of

the less developed countries:

1. Poor nations are deficient in the capital

2. Population Explosion
3. The greatest obstacle to economic development is man
himself
Thank you

for

listening!
Do you have any questions?