Modern Developing Countries Face Population Problems example essay topic

THE ECONOMIC PROBLEMS OF THE DEVELOPING COUNTRIES In the age of jet aircraft, the time distance which separates the United States from one of the the developing countries of Asia, Africa, or Latin America is only a matter of hours. Measured in economic distance, the gap is more like that between the present and the Dark Ages. Over the past century the time distance has been constantly narrowing; during the same period the economic distance has become immeasurably wider. The United States and the other economically advanced countries of the world have been growing steadily richer at rates never before dreamed of. The poor countries of the world, with a few exceptions, have remained poor; in many cases, condition have notably deteriorated. MEANING OF ECONOMIC DEVELOPING One cannot, of course, divide the world quite so neatly into economically advanced countries, on one hand, and developing countries, on the other.

We have a whole spectrum of degrees of development depending on when a country embarked on the path of modern growth and on the progress it has achieved. From the point of view of the United States, the Soviet Union is still, in most respects, an developing nation. Much the same can be said of Europe in general. For that matter, if we are thinking of growth potentialities, the United States with its continuing favorable prospects is itself an "developing" country. Even when we limit our attention to the definitely poorer countries of the world, moreover, we still find a great variety of conditions. Some are much poorer than others.

Some are growing; some are not. In a country like India there is a civilization which is, in many respects, older than that of the West. By contrast, in certain regions of Africa and Oceania we find a tribal organization of the most primitive kind. In some countries, such as Ceylon, Colombia, Peru, and Indonesia, there is a relatively rich endowment of natural resources; in others, such as Jordan and Yemen, the poverty of resources may be a major deterrent to development.

There are, moreover, very significant differences in the densities of population as between these various countries. Brazil, for example, has roughly 30 times as much land per capita as does Taiwan. Broadly speaking, Africa heavily overpopulated, but even here are important exceptions to the rule. In short, the problem is not one of a single situation but of a whole complex of different situations in which the obstacles to progress are likely to be extremely varied.

What unites this group and makes the nation of "developing countries" a meaningful one, however, is that all these countries have just begun to experience, or have yet to experience, the phenomenon of rapid economic growth which has become so characteristic in the economically advanced nations. In one way or another, they are all still wrapped up in what we have called the problem of "getting started". While the nations of Europe, North America, and Australasia were one by one entering the development race, these countries remained at the post. The result has been persistent, grinding poverty in a world where affluence was, at last, becoming conceivable. HOW POOR IS POOR? Poverty means one thing to an American wage-earner; it means quite a different thing to the beggar in the streets of Calcutta.

How can we measure in quantitative terms the degree of poverty existing in the developing countries of the modern world? The problems we encounter here are very similar to those... in connection with the measurement of long-term economic growth. Accurate statistics are seldom available; many of the relevant items are all but impossible to include; the differences in the kinds and relative quantities of goods produced in a poor country as opposed to a more advanced country make international comparisons extremely difficult; and so on. Despite these problems, however, various attempts have been made to estimate the levels of output per capita in the developing countries of the world as compared with their more favorably situated neighbors. The truth is that the differences are so enormous that even the most defective measuring sticks could not fail to detect them. In Table 1 some estimates of output per capita in the various countries of the world... are presented.

These particular estimates have been converted to United States dollars... When all said and done, the striking thing which emerges from Table 1 is how very low the level of output per capita in most of the world's countries is. According to these estimates, roughly... [one quarter of] the world's population produces less than $100 of output per person per year... Another... [third] of the world's population has an annual output per capita of between $100 and $300. Together, these two groups of countries present us with a clear problem of economic underdevelopment. In terms of population, they compromise [almost] two-thirds of the world.

In terms of geography, they include... [much] of Latin America, and virtually all of Asia and Africa... Even if the estimates of output per capita in these regions were low by two, three or even four times, the central conclusion would remain-two-thirds of the world is extremely poor and a sizable fraction is living in circumstances which can only be called desperate. Table 1. Per-Capita Gross national Product (converted to U.S. Dollars) Group A: Annual Per-Capita Gross National Product of $0-100 ('includes approximately 26% Of the World's Population) Latin America Asia and Middle East Africa Haiti Pakistan Nigeria Asia and Middle East Vietnam Republic Somaliland Afghanistan (North) Tanzania Bhutan Yemen Togo Burma Africa Uganda India Angola Oceania Indonesia Ethiopia Western Samoa Muscat and Oman Gambia Nepal Mozambique Group B: Annual Per-Capita Gross National Product of $101-300 (Includes approximately 36% of the World's Population) Latin America Africa Asia and Middle East Bolivia Congo China (Taiwan) Brazil Ghana China (Mainland) Dominican Republic Kenya Iran Ecuador Liberia Iraq El Salvador Madagascar Jordan Guatemala Morocco Korea (South) Honduras Rhodesia Philippines Paraguay Sudan Saudi Arabia Peru Tunisia South Vietnam Africa Asia and Middle East Thailand Algeria Cambodia Turkey Cameroons Ceylon United Arab Republic Group C: Annual Per-Capita Gross National Product of $301-600 (Includes approximately 8% of the World's Population) Latin America Africa Asia and Middle East Argentina Mauritius Hong Kong British Honduras Union of South Africa Lebanon Chile Europe Libya Colombia Bulgaria Malaya Costa Rica Czechoslovakia North Korea Cuba Greece Singapore Mexico Malta Ryukyu Islands Nicaragua Portugal Panama Spain Surinam Yugoslavia Uruguay Group D: Annual Per-Capita Gross National Product $601-1.600 (Includes approximately 8% of the World's Population) Latin America Asia and Middle East Europe Netherland Antilles Israel Hungary Puerto Rico Japan Ireland Venezuela Europe Italy Asia and Middle East Albania Netherlands Brunei Belgium Norway Cyprus Finland Poland Rumania Group E: Annual Per-Capita Gross National Product $1.600 and above (Includes approximately 20% of the World's Population) America Oceania Europe United States Australia Luxembourg Canada New Zealand Sweden Asia and Middle East Europe Switzerland Kuwait Denmark United Kingdom East Germany West Germany France U.S.S. R Not Listed: Approximately 2% of World Population Sources: United Nations Statistical Yearbook, 1968 The New York Times Encyclopedic Almanac 1970 (New York: The New York Times, Book and Educational Division, 1969). Table 1 has been updated by substituting new data, with the permission of Professor Gill. (Editor) THE DEMAND FOR DEVELOPMENT Poverty, even desperate poverty, is not a new phenomenon in many of these countries.

It may be true, as some economists have argued, that the industrial development of the economically advanced countries has sometimes had adverse effects on the standards of living of the poorer countries; but, whether true or not, this is not the essential explanation of why these countries are poor. The fact is that they were poor at the time of the English Industrial Revolution; in most cases, they have been poor since the dawn of history. Poverty is an ancient, not a modern, condition. What is new in the modern developing countries, then, is not the fact they are poor but the fact that they have become aware of being poor and have grown increasingly determined to do something about it. This awareness and determination, in turn, are largely a product of the exposure of these countries to these countries to the economic achievements of the industrialized world. There has been what economists sometimes call an international "demonstration effect".

Because of the colonial interpenetration of the East by the West during the nineteenth century, and because of the dramatic improvements in the means of communications in the twentieth, the poor countries have had a constant "demonstration" of the economic superiority of Western ways. The sharp contrast in standards of living between the economically advanced peoples and their own has not escaped them. On the contrary, it has led to constantly growing demands for rapid development at no matter what the cost. This insistence on quick progress has given rise to many problems.

Politically, it has often been associated with a violent rejection of the ways of the former colonial powers and a susceptibility to slogans and ideologies which find scapegoats in the past and give easy promises for future. Moreover, it sometimes poses obstacles to the achievement of the very economic development which is desired. In some developing countries, emulation of Western achievements has led governments to adopt many of the social-security and other "welfare" measures which, in the case of the economically advanced nations, came only at a very late stage of their forward progress. A poor country, in trying to do more than it can afford, can easily sap the strength of the forces which might make for permanent economic development.

In the final analysis, however, it should be said that this awakened desire for improvement is the main driving force capable of dislodging the modern developing country from its rut of ancient poverty. Without such an awakening, the tense problems of economic development might disappear. But it would not be poverty that had disappeared-only the will to overcome it. THE OBSTACLES TO DEVELOPMENT If the demand for economic development in the modern developing countries is great, so also are the obstacles to its achievement. In fact, most economists believe that the problems of "getting started" in these countries may be much more difficult than those which faced the developing nations of the nineteenth century. In a way this is a rather surprising conclusion because, the modern developing country does have at its disposal a most potent instrument of growth-namely, the whole apparatus of modern technology which has been developed in the industrial countries.

The potentialities for "borrowing" techniques are now enormous. It is typical-and a little paradoxical-that a country like India, with an output per capita of less than $100 a year, already has her own Atomic Energy Commission. With a similar level of income, China already has the atomic bomb. However, ... there are often difficulties as well as advantages in following after. And, in the case of the modern developing countries, these difficulties, plus a variety of special circumstances, have created what often seem to be virtually insurmountable obstacles to progress. Here are the problems which may make the process of "getting started" more difficult for these countries than it was for their predecessors.

1. The difficulty of adapting Western technology. Advanced Western technology, on which most hopes for progress are pinned, is by no means ideally suited to the conditions of the typical developing country. By and large, this technology has evolved along lines appropriate to the conditions of the countries which created it, meaning that it uses (relatively) little labor and a great deal of capital, and depends in its operations on the existence of a reservoir of skilled labor and technically trained personnel.

Such a technology is quite inappropriate to most developing countries where: (a) labor is abundant or super-abundant; (b) capital is extremely scarce; and (c) there is often an acute shortage of skilled labor and management. Ideally, the developing countries would employ a technology which is neither the Western technology of a century ago (which is adapted to a different kind of economic context), but a third technology which consists of an adaptation of modern methods to the special conditions of the developing world. Despite some efforts in this direction, however, this third technology does not really exist. Lacking it, the modern developing country typically tries to import the "latest" Western methods, with the consequence that it faces acute shortages in certain areas (capital and trained personnel) while it has idle surpluses in others (large numbers of unemployment, skilled workers). 2. Lack of preparation for an industrial revolution.

In the nineteenth century, industrial revolutions were launched primarily in Europe or in countries linked with Europe where the social and economic groundwork was reasonably well-laid. In the typical modern developing country, an attempt is being made to accomplish simultaneously both the industrial revolution and the preparations for such a revolution. The difficulties here are sometimes extreme, particularly in the political sphere. Consider, for example, the political unrest and frequent changes of government in the Congo since independence. Even the economically hopeful country of Nigeria has recently been subjected to considerable interregional strains. In Southeast Asia, Indonesia has... experienced a major political upheaval and bloodbath.

In many developing countries a complete social and political revolution is required while the industrial revolution is getting underway. In general, the lack of prior preparation means that these countries are economically poorer than their nineteenth-century predecessors; it means that their agricultural and commercial sectors have not developed to the point where they can easily sustain rapid industrial progress; it means, above all, that there has been little or no time for their institutions and value systems to adapt themselves to modern economic change. A sharp desire for material betterment, a willingness to work hard and in a regular, punctual manner, an awareness of the future benefits of present sacrifices-these attitudes may be the prerequisites of economic growth; yet they may be largely absent in many underdeveloped countries. 3. Population problems.

Most modern developing countries face population problems of a different and much more serious sort than did the nations of the West a century ago. Partly this is a matter of population density in relation to land and other resources. As we know, the modern developing countries have undergone a "public health revolution" which has made possible a fall in the death rate and consequently rapid population growth even in the absence of substantial economic development. In India and China-compromising over a third of the world's population-population is now increasing at 2 per cent or over per year. In Latin America the rate of increase is between 2.5 per cent and 3 per cent. These are very rapid rates of increase and they pose serious difficulties for poor countries in which the rate of capital as is accumulated may simply go into spreading a larger quantity of tools over a larger number of people without actually raising per-capita productivity.

This problem is likely to continue, moreover, because death-rates in these countries are still high relative to the economically advanced countries and therefore may continue to fall in the future. Furthermore, the increase in population is all the more serious in those countries where population is already dense in relation to land and other resources. Generally speaking, this is the situation in Asia, where the great majority of the poverty-stricken of the world are located. In many of these Asiatic countries, population is already pressing against the available cultivable land in a thoroughly "classical" manner. In some extreme cases, such as Java, there are well over 1.000 persons per square mile. Under such circumstances, population growth is not a stimulant to development, as it was in the United States, but a depressant.

Because of the lack of industrial capital, the growing labor force cannot find jobs in the city and therefore adds itself to the already congested rural areas. Rapid population growth in such "labor surplus" economies may mean that despite the attempts to increase industrial employment, the absorption rate is insufficient, and that open disguised unemployment increase as a percentage of the labor force-the reverse of successful development. 4. The international context. Finally, many economists would add that the modern developing countries face a rather different and generally less favorable international environment than did the developing countries of the nineteenth century. Often this problem is put in terms of degree to which private investors in the economically advanced countries are willing to provide sources of capital to their poorer neighbors.

In the nineteenth century, British foreign investment flowed freely and massively to the then developing areas of the world. By contrast, in the twentieth century, the flow of private capital from rich to poor countries has been a mere trickle in relations to their needs. In the case of United States, much of our private foreign investment goes to economically advanced countries (e. g., Canada and Western Europe), and a large fraction of the rest is devoted to extractive products, like oil, where the impact on the over-all development of the poor country may be relatively limited. In general, and in part due to the attitudes of the developing countries themselves, the current climate for private foreign investment is a rather unfavorable one. With former colonial abuses in mind and with a strong upsurge of nationalistic feeling, many of these countries have effectively restricted both the kinds and the terms of investment open to foreign investors. Even where restrictions do not exist, the danger of nationalization and expropriation is always present.

Under such circumstances, American investors will often prefer to employ their capital in more familiar and secure surroundings, particularly when-as, for example, in the case of the common market countries-economic progress is continually creating new and favorable opportunities. To a degree, of course, this deficiency is made up for by the increase in intergovernmental aid-loans and grants from the United States and other countries and international agencies-which has taken place during the past 15 years. Because of the comparative lack of private investment, however, the gap to be filled by these aid programs is a very substantial one. These, then, are some of the special problems which a modern developing country faces in its attempts to achieve rapid growth. The advantage of having a ready-made foreign technology is considerably qualified by the fact that that technology makes severe demands on its scarce supplies of capital and skilled labor and management. It faces the herculean task of transplanting an industrial revolution into a social and economic context which has not naturally been prepared for it.

It suffers from acute population problems. And its hopes for foreign assistance have come to rest more and more on the largess of friendly governments and international organizations. This list, of course, does not include anything like all the obstacles t development which these countries face. It merely suggest some of the ways in which the problem of "getting started"-difficult enough at best-may be even more difficult for those who accomplished the breakthrough in the nineteenth century. We can now understand why many economists feel that the "vicious circles of poverty" may be particularly "vicious" in these countries and why the initial push may have to be an especially big one. THE SCALE OF POSSIBLE DEVELOPMENT The combination of an intense demand for rapid growth and the existence of severe obstacles to growth is the source of profound social and political tensions in many modern developing countries.

For the student of economic development, it raises a number of interesting and difficult problems. Can these demands for growth actually be met? Have these countries any reasonable hope of closing or at least narrowing the gap between themselves and the economically advanced countries? What, realistically, is the scale of possible future development that may be achieved in the developing areas? Such questions have no definite answers, but they do raise certain points which it is well to keep in mind.

In the first place, it should be said that experience, both past and present, suggests that modern economic growth can be launched in a wide variety of apparently unlikely contexts. The achievement of Japan during the past 75 years is an historical case in point. In recent years we have the fact that many of the developing countries have, indeed, shown an acceleration in their rates of progress. See Table 2 for a few examples from the past 15 years.

These rates, after all, compare quite favorably with that of the United States (a little over 3.5 per cent) during most of its historic development. Some countries are doing better than others and, of course, the per-capita rate of advance is lessened by dint of the great population upsurge. Nevertheless, in the developing world as a whole, the past 15 years have seen definite forward strides as compared to times past. Having said this, however, we should counter with a second point which is this: Any hope that these countries might have of closing or even seriously narrowing the economic gap which separates them from a country like the United States is-at least for the foreseeable future-an unrealistic one. This point is brought home very forcibly by some arithmetic calculations which were made a few years ago by the Economic Commission for Latin America. These calculations, it should be remembered, pertain to Latin America where the average level of per-capita output is already considerably higher than that of Africa or Asia.

Table 2. Rates of Growth of Modern Underdeveloped Countries Average Annual Rate of Growth of GNP Nation 1950-1960 1960-1964 Ceylon 6.1 a 2.2 Chile 3.6 3.5 Colombia 4.6 4.4 b Ecuador 4.9 4.0 Guatemala 3.8 6.1 Honduras 3.5 4.0 b Jamaica 7.7 c 4.0 Korea, rep. of 4.8 c 6.2 Malawi 4.0d 1.0 b Paraguay 2.7 3.5 Peru 4.9 6.4 Philippines 4.5 e 4.1 Sudan 5.0 e 6.9 f Taiwan 7.9 g 7.1 b Uruguay 0.0 c -0.1 b Zambia 8.2 e 3.4 a 1958-1960 b 1960-1963 c 1953-1960d 1954-1960 e 1955-1960 f 1960-1962 g 1951-1960 Source: United Nations, Department of Economic and Social Affairs, Statistical Yearbook, 1965, pp. 562-564 The Commission asked, in effect, how long it would take, under various assumptions, for output per capita in Latin America as a whole to reach a level equal to one-third of the United States level. Assuming that output per capita in Latin America were to rise by a healthy 2.4 per cent per year, they found that it would take 42 years for it to equal one-third of the present U.S. output per capita. If one is thinking in terms of narrowing the gap, one would have to take into account the fact that the level of U.S. output per capita would also be continuing to rise during this period. On the assumptions that U.S. output per capita were to rise at the rate of 2 per cent per year, the Commission found that it would take 252 years for the level of output per capita in Latin America to reach one-third of the then current U.S. output per capita! Needless to say, these assumed rates of increase for both the United States and Latin America are arbitrary, and the conclusion therefore are necessarily arbitrary too.

Nevertheless, the calculations do bring out clearly the scope of the problem facing the modern developing countries. For all practical purposes, and baring completely unforeseen circumstances, there is no reason to expect that the gap between the highly advanced and economically underdeveloped countries will be closed or even appreciably narrowed over the course of the next century or more. In the year 2060 there will still be rich nations and poor. Or, if there are not, it will most likely be because of political and military circumstances, not the economic. All of which suggests that the goals of most developing countries must be on a considerably more modest scale. This is not a counsel of despair, however.

For certainly the most important goal of any poor country must be the removal of the extremes of poverty which shorten, cripple, and undermine the value of human life. The goal of "catching up" with the West may be morally defensible, but it is not crucial. What is crucial is that children should not die of malnutrition and exposure and that adults should enjoy life with that minimum of health, comfort, and leisure necessary to physical and mental peace. And this goal, given modern technology, should lie within the realm of the possible.

Its achievement, moreover, is to the interest of every nation, rich or poor. For, as the former Ambassador to India, John Kenneth Galbraith, has remarked, this is "without question... the most important and humane task on which men are now engaged". SOURCES: o The Developing Nations: What path to modernization? - Dr. Frank Tach au o Dynamics of International Relations- Fred Greene.