Economic developmentDr- Al SIDDIG TALHA Mohmed Rahma
What is Development• 1- Economic Progress is an essential component of Development• 2-It must encompass more than material and financial side of people lives• 3-New event• 4-deveoping country=a poor country that is trying to develop or improve its economy
Economic growth• 1-Economic growth =Growth of national income of the country• 2-It increase in a net national product in a given period of time say a year• 3- The country will registered economic growth only if per capita income was gone up when the national income growth at a higher rate than the growth rate of population
• The scope of economic development includes the process and policies by which a nation improves the economic, political, and social well- being of its people.
Economic development• Economic development is a term that generally refers to the sustained, concerted effort of policymakers and community to promote the standard of living and economic health in a specific area.
------------• . Such effort can involve multiple areas including development of human capital, critical infrastructure, regional competitiveness, environmental sustainability, social inclusion, health, safety, literacy, an d other initiatives.
Development• Such effort can involve multiple areas including development of human capital, critical infrastructure, regional competitiveness, environmental sustainability, social inclusion, health, safety, literacy, and other initiatives. Economic development differs from economic growth
---• . Whereas economic development is a policy intervention endeavor with aims of economic and social well-being of people, economic growth is a phenomenon of market productivity and rise in GDP. Consequently, as economist Amartya Sen points out: “economic growth is one aspect of the process of economic development.” 
Economic Development• The scope of economic development includes the process and policies by which a nation improves the economic, political, and social well- being of its people
Economic Development• Economic development is a term that economists, politicians, and others have used frequently in the 20th century. The concept, however, has been in existence in the West for centuries. Modernization, Westernization, and especially Industrialization are other terms people have used when discussing economic development.
Economic development• Although no one is sure when the concept originated, most people agree that development is closely bound up with the evolution of capitalism and the demise of feudalism
Mansell&Wehn• Mansell and Wehn also state that economic development has been understood since the World War II to involve economic growth, namely the increases in per capita income, and attainment of a standard of living equivalent to that of industrialized countries. Economy development can also be considered as a static theory that documents the state of economy at a certain time. According to Schumpeter (2003), the changes in this equilibrium state to document in economic theory can only be caused by intervening factors coming from the outside
Economic development• In economics, the study of economic development was borne out of an extension to traditional economics that focused entirely on national product, or the aggregate output of goods and services. Economic development was concerned in the expansion of people’s entitlements and their corresponding capabilities, morbidity, nourishment, literacy, education, and other socio-economic indicators.
Economist• . Borne out of the backdrop of Keynesian, advocating government intervention, and neoclassical economics, stressing reduced intervention, with rise of high-growth countries (Singapore, South Korea, Hong Kong) and planned governments (Argentina, Chile, Sudan, Uganda),
Economic Development• economic development, more generally development economics, emerged amidst these mid-20th century theoretical interpretations of how economies prosper. Also, economist Albert O. Hirschman, a major contributor to development economics, asserted that economic development grew to concentrate on the poor regions of the world, primarily in Africa, Asia and Latin America yet on the outpouring of fundamental ideas and models.
Economic development• Economic development typically involves improvements in a variety of indicators such as literacy rates, life expectancy, and poverty rates. GDP does not take into account other aspects such as leisure time, environmental quality, freedom, or social justice; alternative measures of economic well-being have been proposed (
-----------• .More Essentially, a countrys economic development is related to its human development, which encompasses, among other things, health and education. These factors are, however, closely related to economic growth so that development and growth often go together
Underdevelopment• Underdevelopment is a term often used to refer to economic underdevelopment, symptoms of which include lack of access to job opportunities, health care, drinkable water, food, education and housing
International Relation• Although international relations and international trade have existed for many hundreds of years, it is only in the past century that international development theory emerged as a separate body of ideas.]
----------------• ]More specifically, it has been suggested that the theory and practice of development is inherently technocratic, and remains rooted in the high modernist period of political thought that existed in the immediate aftermath of the Second World War.
-----------• Throughout the 20th century, before the concept of international development became a common word, four aspects were used to describe the idea
-• political and economic liberalism, and the significance of "free markets"• social evolution in extremely hierarchized environment• Marxist critiques of class and imperialism• anti-colonial take on cultural differences and national self-determination
Post World War II• The second half of the 20th century has been called the era of development.[The origins of this era have been attributed to:•the need for reconstruction in theimmediate aftermath of World War
Colonialism•The evolution of colonialism or "colonization"into globalization and the establishment of newfree trade policies between so-called developed and underdevelopednations.the start of the Cold War and the desireof the United States and its allies toprevent the Third World from driftingtowards communism
Independence-• International Development in its very meaning is geared towards colonies that gained independence. The governance of the newly independent states should be constructed so that the inhabitants enjoy freedom from poverty, hunger, and insecurity
Marshal Plan• The launch of the Marshall Plan was another important step in setting the agenda for international development, combining humanitarian goals with the creation of a political and economic bloc in Europe that was allied to the U.S
-----• This agenda was given conceptual support during the 1950s in the form of modernization theory espoused by Walt Rostow and other American economists] The changes in the developed worlds approach -to international development were further necessitated by the gradual collapse of Western Europes empires over the next decades; now independent ex-colonies no longer received support-
Marshal Plan• The Marshall Plan (officially the European Recovery Program, ERP) was the large-scale American program to aid Europe where the United States gave monetary support to help rebuild European economies after the end of World War II in order to combat the spread of Soviet communism. The plan was in operation for four years beginning in April 1948. The goals of the United States were to rebuild a war- devastated region, remove trade barriers, modernize industry, and make Europe prosperous again
• By the late 1960s, the critics of modernization were advancing a dependency theory to explain the evolving relationship between the West and the Third World. In the 1970s and early 1980s, the modernists at the World Bank and IMF adopted the neoliberal ideas of economists such as Milton Friedman or Bela Balassa, which were implemented in the form of structural adjustment programs, while their opponents were promoting various bottom up approaches, ranging from civil disobedience and conscientization to appropriate technology and Rapid Rural Appraisal.[
• By the 1990s, there were some writers for whom development theory had reached an impasse and some academics were imagining a post development era. The Cold War had ended, capitalism had become the dominant mode of social organization, and UN statistics showed that living standards around the world had improved over the past 40 years. Nevertheless, a large portion of the worlds population were still living in poverty, their governments were crippled by debt and concerns about the environmental impact of globalization were rising.
Underdevelopment• Underdevelopment takes place when resources are not used to their full socio-economic potential, with the result that local or regional development is slower in most cases than it should be. Furthermore, it results from the complex interplay of internal and external factors that allow less developed countries only a lop-sided development progression. Underdeveloped nations are characterized by a wide disparity between their rich and poor populations, and an unhealthy balance of trade.
Rostow stagesTraditional Transitional Take-off High mass Maturity consumption
History of Underdevelopment• The world consists of a group of rich nations and a large number of poor nations. It is usually held that economic development takes place in a series of capitalist stages and that today’s underdeveloped countries are still in a stage of history through which the now developed countries passed long ago. The countries that are now fully developed have never been underdeveloped in the first place, though they might have been undeveloped.
Per Capita Income•• Per capita income is often used as a measure of the wealth of the population of a nation, particularly in comparison to other nations. It is usually expressed in terms of a commonly-used international currency such as the Euro or United States dollar, and is useful because it is widely known, easily calculated from readily-available GDP and population estimates and produces a straightforward statistic for comparison
Characteristics of underdeveloped countries Pop-Poverty agriculture K/L=low 65% No middle Not class Democratic
The Vicious Circle Low Income LowProductivity - Low Saving Low Investment
What is Vicious Circle• 1-The Economic Development is impossible• 2-People are too poor to save• 3-No investment in the country• 4-Low level of productivity
Factors determining the rate of Economic development• 1-Availablity of natural resources• 2-The rate of capital formation• 3-Capital-out put ratio• 4-Technological progress• 5-Dynamic Entrepreneurship• 6-Rate of growth of population• 7-Socail overheads like education &health• 8-Non-Economic factor
Underdevelopment• Is a term often used to refer to economic underdevelopment, symptoms of which include lack of access to job opportunities, health care, drinkable water, food, education and
• Underdevelopment takes place when resources are not used to their full socio-economic potential, with the result that local or regional development is slower in most cases than it should be. Furthermore, it results from the complex interplay of internal and external factors that allow less developed countries only a lop- sided development progression. Underdeveloped nations are characterized by a wide disparity between their rich and poor populations, and an unhealthy balance of trade