Economic Reforms Essay

8615 WordsJun 19, 201135 Pages
Q.1 What are the factors that characterize underdevelopment. Ans: An underdeveloped economy is characterised by high population growth rate, abundant but unutilised nature resources, a low rate of capital formation, a low rate of standard of living accompanied by continuous and sustained efforts to raise it through a proper utilisation of available natural, manpower, financial and entrepreneurial resources. This definition helps to bring at one place the characteristics common to most of the underdeveloped countries. But it should not mean that all these countries which are classified as underdeveloped countries possess all these characteristics in the same measure. There may be instances in which a country does not have most of these characteristics and is still classified as underdeveloped country. The definition simply serves as a sign-post and is positively not all-comprehensive. Its merit lies only in the fact that it helps to identify the basic characteristics of an underdeveloped country. Moreover we cannot treat a country as developed merely because its per capita income is comparable to that of the U.S.A or Australia. For several of the Arab States, GNP per capita suddenly jumped to levels which exceed that of the richest Western States, yet in these countries are found some of the poorest and least developed communities in the world. This clearly indicates that underdevelopment or development of a country or a region may not always be reflected in its per capita national product or the average living standard. According to Prof. Jacob Viner, an underdeveloped country is “a country which has good potential prospects for using more capital or more labour or more available natural resources, or all of these, to support its present population on a higher level of living or if its per capita income level is already fairly high, to support a large

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