SimpleStudy® 4.3 Emerging & Developing Economies @ simwiestuay 4.3 Emerging & Developing Economies 4.3.1 Measures of Development Human Development Index (HDI) + The HDI is an index measuring three core dimensions of human development: education, health, and living standards Education: Assessed by mean years of schooling for adults and expected years of schooling for children. Health: Measured by life expectancy at birth, indicating the number of years a newborn chile would live if current mortality patterns at the time of its birth were to stay the same throughout its life. i \g Standards: Evaluated using Gross National Income (GNI) per capita adjusted for purchasing power. Advantages and Limitations of HDI Advantages: + Provides a broader measure of well-being than GDP per capita alone. + Enables comparisons between countries and tracking development progress over time. Limitations: * Does not include factors such as economic inequality, gender disparity, or human rights issues. * The intrinsic quality of health or education services cannot be directly inferred from the index. Other Indicators of Development + Indicators like the Gini coefficient for income inequality, Gender Inequality Index (Gil), access to clean water and sanitation, and political freedom can also shed light on a country’s development. 4.3.2 Factors Influencing Growth & Development Economic Factors: + Primary product dependency and the risks it poses due to price volatility in global market: + Savings gap signified by the Harrod-Domar growth model, suggesting investment levels determine growth. + Foreign currency shortages limiting the ability to import necessary goods for industry andconsumption. + Capital flight where funds leave a country, causing a shortfall in available investment capital. + Demographic factors including population growth rates and the demographic dividend o burden. National debt levels that can stifle government spending and investment due to high interest repayments. * Access to credit and banking services, which can empower entrepreneurs and stimulate investment. Non-Economic Factors: * Education levels and skills of the workforce contributing to productivity. + The presence or absence of property rights affecting investment incentives. * Other factors include infrastructure quality, governance, and institutional framework. 4.3.3 Strategies influencing Growth & Development * Strategies for growth and development includ + Promotion of education to improve human capital. * Investment in healthcare infrastructure to improve economic productivity. + Economic diversification to reduce dependency on primary products. + Encouraging stable macroeconomic environments to foster investment. * Developing infrastructure to support trade and domestic economic activity. Addressing the savings and foreign currency gaps through policies. * Cultivating a financial system that supports entrepreneurship and investment. + Implementing legal and institutional reforms to establish property rights and reduce corruption. + Fostering international trade relationships and seeking balanced trade agreements. Engaging with international institutions for financial and developmental assistance. * Tailoring strategies to cultural attitudes and social norms for successful implementation.