We live in a world which is prosperous to a few and not too many. The
average citizen of the U.S., is nearly 10 & 40 times wealthier when
compared to counterparts in Central America & some African nations.
As described by Daron Acemoglu & James “a nation’s economic problems
are fundamentally caused by a lack of inclusive political rights”.
Plainly put, poor countries are poor because those that have power make
choices that create poverty and organize the functioning of society for their
own benefit, with the expense of its citizens. The present model either for
success (or) failure of nations depends on the interlinking of political &
work & develop an economy which consist 3 fundamental characteristics:
Ø Efficiency Factor
capital of a country comprises of infrastructure, machinery, buildings etc.
Labor on other hand possess the most effective weapon, the country’s human
resources which can be used in production facilities. The emerging concern is
the “efficiency factor”, which not only determines how the country can turn
capital & labor into the desired & efficient output; but, also decides
the differences in GDP per person around the world.
In the ever-changing
world, the wealth of a nation depends on trade, whether it is in goods or
services. The basic requirement of trade is “infrastructure”, and good
infrastructure depends on investment. Which brings us to the true essence of
development. The more a country is well ‘developed’, the more money it can make.
So, while in the case of poor countries, we are discussing about “Less Economically
Developed Countries” (LEDCs), we should focus on the very basic issue i.e., “why
some countries are poor?”, “what we need to work out?”, “why they are not
developing?”. And there are important factors like, geographical, political,
& cultural coming in to space.
Climate – Many
countries face with varied climates, which does not necessarily suit with the
working conditions in that country. Favourable climatic conditions help the
country to develop
One of the important reason for a country not
able to grow is “bad government”. Governments in present day world should
encourage development through globalization, automation, infrastructure & projects
which are useful to the nation. Necessary law and regulations should be
put into practice both for the businesses, private individuals and protect the property
rights, contracts, patents and copyrights. This could be ethnic tension,
tribalism, terrorism or out of war.
Corruption can really hamper the growth of the
country as MNC’s does not show interests in those nations with high corruption
rates. Excessive bureaucracy is base for rise of corruption. If the process to
get permissions and document verification is too long it will create a
unhealthy environment in the nation.
The issue of “trade law”, is largely a political
matter. The World Trade Organization which is there to protect rights of weaker
nations and work for their development, has been implementing different laws
& rules for different countries. The export tariff rates for developing
countries are high when they trade with developed nations and not vice-versa.
The WTO has been controlled by U.S., and European nations, and it favors for
the welfare of richer nations first. The subsidy rates are also divided on an
and social factors
It is one of biggest problem the world is facing since many
years. If some people/groups are discriminated based on color, tribe, caste,
racial category, language; that particular country’s overall productivity will
hamper. No one can be denied right to work based on their ethnicity or
language. The Muslim countries especially face poorer exam results and economic
prospects than other nations. Another discrimination would be based on the
role of women. Religious & cultural aspects may hinder the role of women,
which amount to leaving entirely the other half of population without economic,
political, education rights and thereby cutting their contribution to overall
Excessive population is shivering many countries
in the world as the space to live is being decreased day by day in the world.
Governments of those nations with excessive population should make stringent
laws to control the birth rate and give necessary incentives to those who
The culture can have serious effects on
business, trade and development. In present day world many
organizations/countries have opened up to globalization & conduct business
according to the local tastes and customs, if they don’t obey the laws &
cultures they face losses and difficulties from the governments. There are few
nations which still hung to the notation of nationalism and closed to outside world
(Ex: North Korea)
Development Agencies (ODA)
Development Agencies can be defined as
agency or organization which is funded by a group of countries (or) by the
citizens of different countries which provide aid for international development. It can be done in terms of supplying goods,
services, loan/monetary, military assistance, medical, food and training aid. Generally
developed nations help emerging and frontier nations.
notable organizations are the World Bank, United Nations Children’s Fund and
the International Monetary Fund. ODA’s can also be owned and controlled by
private individuals like Bill Gates, who help different nations and causes.
for ODA’s Help to Under- Developed / Poor Nations
The reasons why ODA’s give aid can be divided upon 3 factors
which are social, economic and political. The detailed explanation is followed
The ODA’s give aid for poor/underdeveloped nations because
of humanitarian reasons. They indicate and try to send out a message to the
world that their organization/country want to make this world a more better
place to live in peace & prosperity. They also try to improve & provide
the standard of living, job & education opportunities for the people in the
ODA’s give aid to benefit
economically & also to gain higher interest rates which are repaid as a
loan at the time of expiry. The ODA’s can trade products at their own indicated
prices (which are usually less from the market price) from the recipient nation
and decrease their manufacturing cost
The ODA’s give aid to
nations which might be politically useful as an ally during difficult times and
also these organization’s and their countries, showcase their power to the
world and maintain a grip on these weaker nations and use them to their benefit
in difficult times. Giving aid depends on the donor country status & power
it has within the international community.