Why Are Tropical Countries so Poor? Essay

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Why are Tropical Countries so poor?

“Development implies change, and this is one sense in which the term development is used, that is, to describe the process of economic and social transformation within countries.” So Economic development should lead to the improvement in the economic and the social aspects of an economy; such as a countries standard of living, the infrastructure within the country and a stable economic environment that encourages investment activities. Developed economies tend to have high GDP per capita when compared to their undeveloped counterparts; thus individuals are richer as oppose to the poor in underdeveloped countries. Economic growth is achieved via the supply of goods and services, what an economy do and make is what improves our living standards. If one lives in an economy which produces high quality products, then the living standards of those within that economy will be higher than that of individuals who live in an economy that produces poor quality goods.
There are four factors which economists believe are essential to the growth of an economy; these are Capital, Labour and Technology. All these three factors are vital components of growth in their own right and must be obtain for growth to be achieved. The accumulation of Capital is vital as it is need to finance investment projects. Investment projects, via the multiplier effect should result in an increase in the GDP of the economy; However in order to undertake investment, there must a high savings ratio must be obtained as it is essential for the accumulation of capital. Labour plays a critical role in achieving economic growth. The higher the number of workers there is in an economy should lead to economic growth. If there are more people working and unemployment levels are relatively low, then there is likely to be the achievement of economic growth as human resources are been used and not lying idle. Technological progress is also a vital factor in achieving...

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