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Construction Management in Developing Countries
ECM 627.3
Chapter 1
Prof. Dr. Hari K. Shrestha
Nepal Engineering College
hari@nec.edu.np
1CM in Developing Countries/Ch 1_HKS
2CM in Developing Countries/Ch 1_HKS
Chapter 1: Concept of Development
In this chapter we will deal with:
All of us want development.
But, what is development?
What are (or should be) the purposes of a
country’s development?
How the level of development of a country
is, and should be, measured?
What are common and different factors of
developing countries?
What are the extrinsic and intrinsic factors
of development?
Defining Development:
Multiple definitions of development
1. The systematic use of scientific and technical knowledge to
meet specific objectives or requirements.
2. The process of economic and social transformation that is
based on complex cultural and environmental factors and their
interactions.
3. Development is the act of expansion and growth. For example,
in a country, development is classified as growth of the economy,
growth of the people and the people's quality of life.
Which definition of development is the best, and why?
3
Development Thinking and Policy Involves
• Different meanings of development over
time
• Different dimensions – economic, social,
environmental, political
• Different Stakeholders
• Different Contexts: Cultural values, social
practices, ecological conditions
4
Major Traditional Approaches and
definitions of development
Perspectives Definitions
• Modernization: Development is state-led
economic growth – industrial modernity;
China as a good example.
5
6
7
State-led development?
• Neo-liberalism
Development is Market-led economic growth.
Policy: Get prices right; curb state failure through
structural reform (deregulation, liberalization,
privatization); USA, UK, India after Rajiv Gandhi, as
examples.
• Alternative Development: is society-led development
should be equitable, sustainable, participatory.
Themes: state & market failure; participation; local
development
• NGO led Development: When government is weak,
market does not function, civic society is incapable, NGO
led can lead development
8
• Human development :
Human capacitation and empowerment
Themes: Human resource development, HDI
• Post/Anti-development:
Development is destructive, Western concepts and
thrust on indigenous societies.
Development for whom?
Themes: Local level development, Gandhian
thinking, “small is beautiful”, Environmental
movements.
9
Defining and measuring development
Traditional Economic Measures
Traditional economic measure (before 1970)
– Capacity of national economy
– Per capita income or per capita GNP
– Gross Domestic Product (GDP): Simon Kuznets, 1934
– Industrialization: manufacturing & service industries
– Social indicators – literacy, health, housing etc.
Issues like poverty, discrimination, unemployment, and
income distribution were not considered
10
CM in Developing Countries/Ch 1_HKS
Some recent thoughts on Nepal’s development:
http://kathmandupost.ekantipur.com/news/2016-12-05/political-bickering-unsafe-for-
nepal.html
New Economic Measures (Main 5) of Development (World Bank)
• Economic Policy and Debt: There are three main subcategories in this class: "Balance of Payments,"
"External Debt" and "National Accounts." Indicators measure capital and financial accounts, as well as
the current account and reserves. Measures of FDI, foreign trade and remittances, development
assistance the country receives. and purchasing power parity are also included.
• Financial Sector: There are five subcategories under this heading. "Assets" and "Capital Markets" are the
two most general, and they include bank capital and market capitalization. The "Exchange Rates"
subcategory includes measures of inflation. "Interest Rates" covers the lending interest rate, the deposit
interest rate and the interest rate spread. The fifth subcategory, "Monetary Holdings," includes
measures of liability and the money supply.
• Poverty: This subcategory covers income distribution and poverty (nationally, percentage of rural
population and urban populations). Income distribution is measured by quintiles and deciles. A heading
called "Conflict and Fragility" measures battle-related deaths and homicides.
• Private Sector and Trade: Under the heading "Private Sector and Trade" includes many indicators of the
business environment, including imports and exports measured both in dollar value and by time-study
indexes. There are statistics for tariffs here, as well as measures of travel and tourism. There are also
measures of private infrastructure investment in this section, such as investment in energy,
transportation and telecommunications.
• Public Sector: Every year the World Bank assigns low income nations a set of ratings called "Country
Policy and Institutional Assessment." These ratings are important because they determine the amount
of money countries receive from the World Bank. You can find them under the "Public Sector" heading.
They measure many variables, including transparency, budgetary management and environmental
sustainability. Government finance is measured in this area--revenues, expenditures and deficits. A
figure measuring the percentage of seats held by women in the national parliament is included.
• Other Categories: The other categories of World Bank indicators include indicators that translate less
directly into terms of financial or monetary terms. They include "Education," "Environment," "Health,"11
12
https://www.weforum.org/agenda/2016/07/here-is-proof-that-economic-wealth-does-not-guarantee-
the-best-quality-of-
life?utm_content=bufferdecbd&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer
The new economic view of
development
Dudley Seers (1969)
What has been happening to POVERTY? What has been
happening to UNEMPLOYMENT? What has been happening to
INEQUALITY? If all three of these have been declined from high
levels, then beyond doubt this has been a period of
development for the country concerned.
If one or two of these central problems have been growing
worse, especially if all three have, it would be strange to call the
result DEVELOPMENT even if per capita income doubled.
13CM in Developing Countries/Ch 1_HKS
(1920-1983)
15
Goulet’s Three Core Values of Development (1971)
– Sustenance: The ability to meet basic
needs
Self-esteem: A sense of worth and self
respect (to be a person)
Freedom from Servitude: To be able to
choose
CM in Developing Countries/Ch 1_HKS
16
Development must therefore be conceived of
as a multidimensional process involving
major changes in social structures, popular
attitudes, and national institutions, as well as
the acceleration of economic growth, the
reduction of inequality, and the eradication of
poverty. -Michael P. Todaro (2008)
CM in Developing Countries/Ch 1_HKS
How many years will it take to
eradicate poverty from Nepal?
What about eradicating
absolute poverty?
Should “reduction of inequality”
or “provision of justice” be the
aim of development?
Capability approach
Amartya Sen
• What a person is, or can be, and does or can do?
• 5 Disparities
1. Personal heterogeneities – age, gender,
disabilities, illness etc.
2. Environmental diversities
3. Variations in social climate
4. Relational perspectives
5. Distribution within family
17CM in Developing Countries/Ch 1_HKS
18
Amartya Sen posits that all individuals are endowed with a certain set of
capabilities while it is simply a matter of realising these capabilities that will allow
a person to escape from poverty and their state of 'unfreedom‘. Sen questions a
fundamental assumption of development economics, arguing that income poverty
should not be the single most important factor in determining development. Sen
argues that in spite of a world of sheer abundance, there simultaneously exist
populations living in a state of 'unfreedom', unable to realise their capabilities.
Sen attempts to expand the basic interpretations of freedom by examining five
elemental forms of instrumental freedoms: political freedoms, economic
facilities, social opportunities, transparency guarantees, and protective
security. These forms of freedom are complementary, remaining interrelated and
inextricable. For Sen, these freedoms constitute not only the means, but
also the ends in development. Poverty, Sen asserts, should be seen "as a
deprivation of basic capabilities, rather than merely as low income" (Sen,
1999), contesting the general belief amongst economists who view income as the
be all and end all of development.
He is known for bringing an "ethical dimension" to a field dominated by technical
specialists. Based on the example of the former Soviet Union, Sen argued that
political liberties are necessary for sustainable development. He compared the
development strategies of India and China, arguing that Indian democratic
processes provide a firmer guarantee of long term stable growth. Sen argued
against the notion that a specific set of "Asian values" exists that might provide a
justification for authoritarian regimes.
19
Economic Development Economic Growth
Implications Economic development implies an upward
movement of the entire social system in
terms of income, savings and investment
along with progressive changes in
socioeconomic structure of country
(institutional and technological changes).
Economic growth refers to an increase over time
in a country`s real output of goods and services
(GNP) or real output per capita income.
Factors Development relates to growth of human
capital indexes, a decrease in inequality
figures, and structural changes that
improve the general population's quality of
life.
Growth relates to a gradual increase in one of
the components of Gross Domestic Product:
consumption, government spending, investment,
net exports.
Measureme
nt
Qualitative.HDI (Human Development
Index), gender- related index (GDI), Human
poverty index (HPI), infant mortality,
literacy rate etc.
Quantitative. Increases in real GDP.
Effect Brings qualitative and quantitative changes
in the economy
Brings quantitative changes in the economy
Relevance Economic development is more relevant to
measure progress and quality of life in
developing nations.
Economic growth is a more relevant metric for
progress in developed countries. But it's widely
used in all countries because growth is a
necessary condition for development.
Scope Concerned with structural changes in the
economy
Growth is concerned with increase in the
economy's output
http://www.diffen.com/difference/Economic_Development_vs_Economic_Growth
20
Three Broad Objectives of National
Development
1. To increase the availability and widen the
distribution of basic needs
• Food, shelter, health and protection
• Rising per capita incomes
• Elimination of absolute poverty
• Greater employment opportunities, and
• Lessening income inequalities
are necessary but not the sufficient conditions for
development.
CM in Developing Countries/Ch 1_HKS
Despite Having Robust Economic Growth, India is Backward in
Healthcare, Sanitation, & Drinking Water
https://thewaternetwork.com/article-FfV/despite-having-robust-economic-growth-india-is-backward-in-healthcare-
sanitation-drinking-water-cL0PKwlcSTru0LUgrdRKXA, Feb 2016
21
2. To raise levels/standard of living:
Enhanced material well-being
as well as greater
individual and national self-esteem
3. To expand the range of economic
and social choices
Free from servitude and dependence
Three Broad Objectives of National Development
CM in Developing Countries/Ch 1_HKS
Any differences from Gautet’s three core values of development?
22
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24
25
26
Sources of (under)development
(intrinsic and extrinsic)
• Intrinsic (factors that are within national control)
• Attitudes and aptitudes
- Attitudes and culture of the people;
- Attitude towards: (a) change and development, (b) foreign direct investment,
(c) research and innovation
- Aptitudes (natural capacity/tendency) and behavior of the elites and leaders to
effectively deal with internal and external developmental issues
• Legal structures and institutions
- Politics: Political stability, policy stability, legal stability
- Governance: facilitate versus red tape, degree of transparency
- Rule of law: uniform, fair and predictable application of law
- Level of corruption
- Local capital market
- Security: financial and personal /physical
• Institutional Set up to facilitate development process
– Coordination and cooperation among the institutes
Several theories of underdevelopment
(For long list of theories of underdevelopment: http://www.professor-frithjof-kuhnen.de/publications/causes-
of-underdevelopment/0.htm )
CM in Developing Countries/Ch 1_HKS
28
Extrinsic factors (factors that are beyond national control):
- Geopolitical and commercial interest that it creates compared to other countries;
(Porter’s Diamond Model); free access to international market, country need to
proactively compete with other countries to attract FDI, grant/loan, technology
transfer
- Place of a country in a historical and cultural system; membership in multinational
organizations, like UN, Common Wealth, ASEAN, NAFTA, SAFTA,
- “Reforms” imposed in counterpart by multilateral organizations (like the IMF, World
Bank, IFC, ADB, AIIB) to get out of situations of deficit and indebtedness in
which the country is placed.
- Lack of interest in and comprehension for the specific dynamics of a nation, by
multinational companies.
- Changes in financing/funding policies of multinational/multilateral organizations
- Global Climate Change
- Changes in policies and priorities of donor countries, and UN System
- Protectionism of other countries
- Image of country (business friendly, safety of investment and personnel,
infrastructure, availability of human resources, reliability of power/energy,
transparency, level of corruption, intellectual property right…) portrayed in
influential foreign media and embassy advisory
Sources of (under) development….(Contd.)
CM in Developing Countries/Ch 1_HKS
29
Intrinsic Factors Impact on CMDC
Attitudes and aptitudes
Attitudes and culture of the people
Attitude towards: (a) change and development, (b) foreign
direct investment, (c) research and innovation
Aptitudes (natural capacity/tendency) and behavior of the
elites and leaders to effectively deal with internal and external
developmental issues
Legal structures and institutions
Politics: Political stability, policy stability, legal stability
Governance: facilitate versus red tape, degree of transparency
Rule of law: uniform, fair and predictable application of law
Level of corruption
Local capital market
Security: financial and personal /physical
Institutional Set up to facilitate development process
Coordination and cooperation among the institutes
30
Extrinsic Factor Impact on CMDC
Geopolitical and commercial interest that it
creates compared to other countries
Place of a country in a historical and cultural
system
“Reforms” imposed in counterpart by
multilateral organizations
Lack of interest in and comprehension for the
specific dynamics of a nation, by
multinational companies
Changes in financing/funding policies of
multinational/multilateral organizations
Changes in policies and priorities of donor
countries, and UN System
Protectionism of other countries
Image of country portrayed in influential
foreign media, embassy advisory, UN
reports, Global Survey reports
Global Climate Change
31
Countries fall into four broad human development categories,
each of which comprises 47 countries:
• Very High Human Development,
• High Human Development,
• Medium Human Development and
• Low Human Development (46 countries in this category).
1. Developed countries (Canada, United States, European Union
members, Japan, Israel, Australia, etc.)
2. Countries with an economy consistently and fairly strongly
developing over a longer period (China, India, Brazil, South
Africa, Costa Rica, Mexico, Egypt, much of South America, etc.)
Countries are often loosely placed into
four categories of development:
CM in Developing Countries/Ch 1_HKS
3. Countries with a patchy record of
development (most countries in Africa,
Central America, and the Caribbean
excepting Jamaica (category 2); much of
the Arab world fall in this category)
4. Countries with long-term civil war or large-
scale breakdown of rule of law or non-
development-oriented dictatorship ("failed
states") (e.g. Somalia, Sudan, Burma)
Nepal ?
32CM in Developing Countries/Ch 1_HKS
33
Common and Different
Characteristics of Developing
Countries
39CM in Developing Countries/Ch 1_HKS
Developing countries are not homogeneous but are
enormously diverse in their structure. In particular it is stressed
that the developing world differs in:
• Population and geographic size.
• Language and religion.
• Experiences in the colonial era.
• Levels of education.
• Natural resource endowments.
• Types of industry.
• Role of government and degree of
democracy.
• Degree of dependency in
international economic and political
affairs.
40Do these parameters have impact on CMDC?
Development Indicators/Indices
Genuine Progress Indicator
• GPI: Among the things it considers are income
distribution for each country, along with
household and volunteer work (activities that
enhance welfare but do not involve monetary
transactions), and, for example, the cost
of environmental degradation.
Ecological Economics doi: 10.1016/j.ecolecon.2013.04.019 (2013)
42
HDI as a development Criterion
• The Human Development Index (HDI) is a composite statistics
used to rank countries by level of "human development" and
distinguish "very high human development", "high human
development", "medium human development", and "low
human development" countries. The Human Development
Index (HDI), developed by Dr. Mahboob ul Haq of Pakistan, is
a comparative measure of life expectancy, literacy, education
and standards of living for countries worldwide. It is a
standard means of measuring well-being, especially child
welfare. It is used to distinguish whether the country is a
developed, a developing or an under-developed country, and
also to measure the impact of economic policies on quality of
life.
43
44
45
46
Nepal’s Position: 157 in 2011 and 2012. Nepal’s HDI 0.458 (2011) and
0.463 (2012), South Asia HDI 0.558 (2012).
HDI Report 2013, as reported in Aarthik Abhiyan Rastriya Dainik,
March 16, 2013, page 1
Gross National Happiness as a
development criterion
9 Domains and 33 Indicators of GNH:
• Psychological Well being
• Health
• Time use
• Education
• Cultural diversity and resilience
• Good governance
• Community vitality
• Ecological diversity and resilience
• Living standard
Source: www.grossnationalhappiness.com
Nepal ranked in 121st position in Happy Country in 2015.
World Happiness Report 2015; http://81c27a5d9c3263e8ebcc-
2da201d1ba4d5004cb235610c26ba057.r67.cf5.rackcdn.com/WHR15.pdf
48
49
The World's Happiest Countries
Christopher Helman,01.19.11,
"To use economic measurements alone to gauge the success of a nation would be equivalent to
assessing the entire condition of a man simply by looking at his bank balance," Peter Mandelson,
former U.K. economic minister.
To that end, the inputs used to create the index are both objective and subjective: that's because
it's not enough to know hard data like a country's unemployment or inflation rates. It also matters
how hard people think it is to find jobs, how convinced they are that hard work can bring success.
This can get complicated. In Nepal, for example, inflation is 11%, unemployment 46%. Yet a
surprisingly high 50% of the people say they are satisfied with their standard of living and 81%
have confidence in their banks. Could be they're scared of voicing their true opinion in a shaky
democracy, or maybe the Nepalese are just endemically happier people. Legatum adjusts for
this, adding a variable called "ability to express political opinion without fear."
What's the most prosperous country in the world? Norway. What's it got that the rest of the world
doesn't? The biggest bump comes from having the world's highest per capita GDP of $53,000 a
year. Norwegians have the second-highest level of satisfaction with their standards of living: 95%
say they are satisfied with the freedom to choose the direction of their lives; an unparalleled 74%
say other people can be trusted.
Cynics (particularly those leaving comments on Legatum's excellent website) say Norway's
ranking is a fluke, that it's a boring, godless (just 13% go to church) homogeneous place to live
with a massive welfare state bankrolled by high taxes. Without massive offshore reserves of oil
and gas that it exports to the world through state-controlled Statoil ( STO - news - people ),
Norway's GDP would be far smaller.
And yet joining Norway in the top 10 prosperous countries are its Scandinavian sisters Denmark,
Finland and Sweden, with equally small and civilized Switzerland and the Netherlands also in the
club. None of these countries are blessed with great hoards of oil and gas.
50
Index Rank
Corruption Perceptions Index 130 / 168
Global Competitiveness Report 99 / 140
Global Enabling Trade Report 116 / 138
Index of Economic Freedom 152 / 178
International Logistics Performance
Index (LPI) 105 / 160
Inward FDI Potential Index 133 / 139
KOF Index of Globalization 162 / 187
Networked Readiness Index (NRI) 112 / 142
Open Budget Index 84 / 102
http://globaledge.msu.edu/countries/nepal/memo
Nepal’s Rank in various development Indices, 2016
51
Common Parameters
between HDI and GNH
Un-common Parameters
between HDI and GNH
Formula to calculate HDI:
Numerical Example:
1. High population growth rate
Nepal as an example:
• Total population - 23151423 (2058 BS)
• Population growth rate - 2.25 %
• Would be double by 2095 BS (2039)
• 2010: 29959364
• 2009: 29432743
• 2008: 28905358, according to the World Bank.
52CM in Developing Countries/Ch 1_HKS
10 Common Features of Developing Countries
http://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&met_y=sp_pop_grow&idim
=country:NPL&dl=en&hl=en&q=population+growth+rate+nepal
2. Low level of living (low income, inequality, poverty)
S. No. Countries GDP per capita (US
$)
HDI
(177)
1 China 2000 81/101
2 Bangladesh 450 140
3 Bhutan 1430 133
4 India 820 128/134
5 Maldives 3010 100
6 Nepal 320/640(2005) 142/157
7 Pakistan 800 136
8 Sri Lanka 1310 99
53
Economic Survey July 2008/2011. HDI calculation method changed since 2010.
CM in Developing Countries/Ch 1_HKS
GDP Growth Rate: 2008/9/10/11: 6.1/ 4.9/ 4.6/ 4.5
GDP Per Capita – PPP: 1329 International Dollars, 2005
http://www.gfmag.com/gdp-data-country-reports/212-
nepal-gdp-country-report.html#axzz1l22MoAdi
• 30.85 % below poverty line (NLSS 2003/04) based
on Rs. 7696 as the average national poverty
line.
• 24.1 % below poverty line as per 1 dollar per
day based on purchasing power parity (PPP).
54CM in Developing Countries/Ch 1_HKS
55
2071/72: PCI increase Rs. 3800
Inequality
S.
No.
Description % below poverty
line
1 Dalit 46
2 Janajati living in hilly areas 44
3 Muslim 41
4 Terai Janajatis 35
5 Minority castes 31
6 Newars 14
7 Brahmin/Chettris 18
8 Middle level 21
56
Three Year Interim Plan, Mangsir, 2064
3. Low levels of productivity
57
Low
nutrition
Low
health
Low
productivity
Low
income
CM in Developing Countries/Ch 1_HKS
4. Agro based economy
S.
No
Industries 2000/01 2004/05 2007/08
1 Agriculture & forestry 36.15 34.71 32.12
2 Fishing 0.43 0.47 0.48
3 Manufacturing 9.03 7.92 7.06
4 Construction 6.01 6.47 6.44
5 Real estate, renting &
business activities
8.29 8.69 9.91
58CM in Developing Countries/Ch 1_HKS
Composition of GDP in percentage
(Economic Survey, July 2008)
Agriculture Industry +
Manufacturing
Manufacturing
only
Services
34 16 7 51
59
5. Unemployment and underemployment
60
S.
No.
Descriptions % age
1 Population relied on agriculture as main
occupation
78
2 Employed (15 years above) 74.3
3 Unemployed (Male 3.1 % & Female 2.7) 2.9
4 Inactive 22.8
Based on NLSS 2060/61
Three Year Interim Plan, Mangsir, 2064
61
year
Economic
growth
GDP current
U.S. dollars
GDP
constant
dollars
GDP per capita
current dollars
GDP per
capita
PPP
GDP per capita
constant
dollars HDI Inflation
Capital
investment
percent of GDP
Capital
investment
in dollars
Household
consumption
percent of GDP
Household
consumption
in dollars
Savings
percent
of GDP
2000 6.2 5.49 6.9 231.43 1539.77 459.13 0.449 2.5 24.31 1.34 75.88 4.17 21.6
2001 4.8 6.01 7.2 248.83 1586.88 473.18 2.7 22.39 1.35 80.23 4.75 17.72
2002 0.12 6.05 7.2 246.8 1564.42 466.48 3 20.25 1.23 82.11 4.89 15.81
2003 3.95 6.33 7.5 254.55 1603.13 478.02 5.7 21.41 1.36 82.77 5.15 23.5
2004 4.68 7.27 7.9 288.67 1656.27 493.87 2.8 24.53 1.78 79.61 5.68 25.97
2005 3.48 8.13 8.1 318.75 1693.15 504.87 0.477 6.8 26.45 2.15 79.55 6.34 26.27
2006 3.36 9.04 8.4 350.61 1730.61 516.04 6.9 26.85 2.43 82.33 7.3 26.69
2007 3.41 10.33 8.7 396.17 1771.16 528.13 5.7 28.69 2.96 80.98 8.18 28.15
2008 6.1 12.55 9.2 476.56 1860.61 554.8 0.501 9.9 30.32 3.8 80.28 9.86 27.45
2009 4.53 12.85 9.6 483.4 1925.39 574.12 11.1 31.67 4.07 79.79 10.05 35.85
2010 4.82 16 10.1 595.43 1996.86 595.43 0.527 9.3 38.27 6.12 78.56 12.3 33.6
2011 3.42 18.91 10.4 695.88 2042.14 608.93 0.533 9.3 37.99 7.18 76.46 14.14 36.12
Source: http://www.theglobaleconomy.com/indicators_data_export.php
62
http://www.theglobaleconomy.com/N
epal/Unemployment_rate/
As per national census 2058
• Youth unemployment – 11.43 %
• Among total labor force – 70.6 % are involved on agriculture and
29.4 % on non-agriculture sector.
• It is estimated that in 2064 total labor force has reached 11.4
million with the annual increment rate of 2.6 %.
• Also estimated is yearly 3,00,000 labor force will enter Nepalese
labor market
63
6. Technological
backwardness
64
7. Underutilized natural resources
• Though Nepal is rich in natural and human
resources, the resources have not been
optimally utilized, thereby, Nepalese
people sometimes referred to as “poor in
a rich country”.
Economic Survey July 2008
65
Identified locations for cement industries:
Baitadi, Udayapur, Dhankuta, Salyan,
Arghakhanchi
Identified locations for iron – mine based
industries:
Dang, Salyan, Rolpa, Palpa
66
8. Foreign trade
orientation
• Trade deficit increased by
37.7 % to 102.85 billion in
the first eight months of
FY 2007/08
• Share of trade deficit with
India was 62.1 % and with
other countries by 37.9 %
in the review period. 67
9. Low concern over time
• Time is not considered as important.
• People enjoy more free time
• “Will do tomorrow” attitude
• “Personal problem” considered
• Strikes, Chakkajam,
• long list of holidays
– democracy, loktantra, republic
– Death of people, student, teacher, official …
• Road maintenance at office time …
• Project delay
68CM in Developing Countries/Ch 1_HKS
10 Low moral orientation
• High level of bribery
• Low level of
– (a) Work ethics
– (b) Professionalism and
– (c) Integrity
69
11 Too many organizations (?)
70
71
End of Chapter 1
Common
Characteristics
Impact on CMDC Different
Characteristics
Impact on CMDC
Test yourself. Answer them using different resources.
Chapter 1: Concept of Development, Characteristics of developing & developed countries
• Select the most critical intrinsic (only one) and extrinsic (only one) cause of
underdevelopment of a country. Defend your selection (i.e., explain why that
particular cause is most critical in comparison to other causes.
• Nepal is aspiring to be promoted to “developing country” from its current status of
“lease developed country”. To achieve this goal, which national development
parameters (select only two) should be improved, and why?
• What should be the proper development model for a developing country: (a) state
led, (b) Market led and (c) Society led? Explain with reasons and examples.
• Nepal has practiced planned development since the last half century, yet Nepal is
still one of the least developed countries. List top three reasons for this state of
Nepal (reasons for failure of planned development), and propose practical solutions
to overcome each of them.
• Despite abundant natural resources (like fresh water, forest, herbs, natural beauty,
bio-diversity) many developing countries, including Nepal, are reeling under
extreme pressures of underdeveloped infrastructure. Analyze the intrinsic and
extrinsic factors of underdeveloped state of Nepal.
• Defining development of a country is a complex issue. Discuss the economic, social,
cultural, and environmental factors that may be used to define development.
• The traditional economic indicators of development of a country have been
challenged by recent scholars of development. Can a country be economically
developing and still be underdeveloped?
72
Test yourself. Answer them using different resources.
Chapter 1: Concept of Development, Characteristics of developing & developed countries
• The basic economic indicators of development of a country may be
increasing positively, but the country may still be underdeveloped for
many years. Agree or disagree? Give reasons.
• Discuss the basic similarities (common features) and differences among
different developing countries?
• Is there any relationship between the Human Development Index and
Gross National Happiness? Explain.
• Which one should be the ultimate measure of development: Human
Development Index or Gross National Happiness? Explain with
appropriate reasons.
• Discuss the intrinsic and extrinsic factors of underdevelopment of a
country. Explain these factors in context of Nepal.
• Is there any relationship between the level of development of a country
and the construction management methods used in the country? Discuss.
• Discuss the major factors of underdevelopment of a country. Explain
these factors in context of Nepal. 73
74
75
साइकलमा कार्ाालर्
एउटा डरलाग्दो रोग नेपाली समाजमा विस्तार हुँदै गरेकोमा मलाई चिन्ता लाग्छ। समाजका विद्धत् िगग पनन
सञ्िारमाध्यममा आएका समािारका भरमा वििार बनाउुँछन्। संिारमाध्यमहरू आग्रहराखेर समािारका शीर्गक
बनाउछन्। महहलाहहंसामा सरकारले िालेका कदमबारे प्रेससिज्ञप्ती प्रकाससत गयौं तर कनैपनन पत्रिकाले
छापेन। गेरखापिले समेत छापेन तर गरेको कामको पनन गरेन भनेर गाली र सरकारको अलोिना भने सबैले
छापे। जनतालार्ग ससूचित गनग त गरेकाकाम छापेर कमजोरी देखार्गहदन पने चियो तर हाम्रो दभागग्य।
मान्छेहरू दल/अनहार, भूगोल िा आफ्नो र्च्छा स्िािगसुँग जोडेर कसैका कामको प्रशंसा िा आलोिना गछगन्।
विर्यिस्तको गहहरार्मा पगेर साङ्गोपाङ्गो विश्लेर्ण गरेर आग्रहरहहत िस्तपरक वििारको सट्टा सतही
हटकाहटप्पणी र कहहलेकाहीं तरुन्तै ननष्कर्ग मा पग्छन्। कनतपयले समस्याको जड एउटा नेतामा िा समस्या
समाधानको छडी अको नेतामा देख्छन्। मान्छेलाई देित्ि िा दानित्िकरण गने, जटील सामाजजक आचिगक
समस्याको एउटा सपाट उत्तर खोज्ने, फलानो ठीक भएपनछ सबै ठीक हन्छ भन्ने मान्यता राख्ने बौद्चधक
जमात बढीरहेको छ। आफ्नो खास काम बाहेक सबै काम जान्ने हनखोज्ने, अकागको आलोिनामा रमाउने,
आफ्नो कतगव्य होर्न, अचधकारका मािै करा गने, सजजलै र तरुन्तै उत्तर खोज्ने, अधैयग, उत्तजेक र हहंसक बन्दै
छ यिा पस्ता। अकागको दुःखमा रमाउने, अह्राएको काम माि गने, जोखखम नउठाउने, अन्य मलकलाई राम्रो र
आफ्नालाई नराम्रो देख्ने, व्यजतत, पररिार आफन्त, र्ष्टसमि र दलगत नाफाघाटामा रमाउने, पढ्ने पढाउने
एउटा तर व्यिहार अकै गने, आत्मविश्िास नभएको, अरुले सहयोगको अपेक्षामा हदनरात दौड्ने तार त्यही
समय सृजनाशीलता र समहहनतमा नखिगने, भनसन, दिाि िा पैसामा सबैकाम हन्छ भन्ने धारणा राख्ने,
आफ्नो सन्तान विदेशीको गलाम बनेकोमा गिग गने, आफ्नै माटोमा गररने शारीररक कामलाई हेय ठान्ने,
पढेको तर के ही पनन सीप नभएको, कसैलाई लगाएको गणको प्रनतफल खोज्ने, पैसालाई सबैिोक ठान्ने,
आफ्ना बाबआमा र बालबच्िाको स्याहार नगने तर यरोप-अमेररका िा र्जरायलमा बृद्ध र बच्िाको साहै
राम्रो स्याहार गने, दयामाया, ममता, सदािार, सुँस्कृ नत, र्नतहास, भूगोल बारे बेखिर जमात पनन देखखदैछ।
उपयगतत िररिले समाजलाई पतनोन्मख बनाउुँछ। अहहले हामीलाई समहहनती, दरदृष्टीयतत, दृढ, सक्षम,
स्िच्छ, मलकप्रनत माया भएको (राष्रप्रेमी), आत्मविश्िास भएको, पौरखमा विश्िास गने, ससतने तत्परता र
र्च्छाशजतत भएको, सामाजजक प्राणीको खाुँिो छ।
लीलामखण पौड्याल, १ जनिरर २०१३
11. Dualism
Dualism holds to the belief that there are two elements of existence:
Physical and Spiritual
76
American values
(Robin Williams, 1970)
• Achievement and success
• Activity and work
• Moral orientation
• Humanitarianism
• Efficiency and practicality
• Progress
• Material comfort
• Equality
77CM in Developing Countries/Ch 1_HKS
American values
(Robin Williams, 1970)
78
o Freedom
o External conformity
o Science and rationality
o Nationalism – patriotism
o Democracy
o Individual personality
o Group – superiority themes

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Construction Management in Developing Countries Lecture 1

  • 1. Construction Management in Developing Countries ECM 627.3 Chapter 1 Prof. Dr. Hari K. Shrestha Nepal Engineering College hari@nec.edu.np 1CM in Developing Countries/Ch 1_HKS
  • 2. 2CM in Developing Countries/Ch 1_HKS Chapter 1: Concept of Development In this chapter we will deal with: All of us want development. But, what is development? What are (or should be) the purposes of a country’s development? How the level of development of a country is, and should be, measured? What are common and different factors of developing countries? What are the extrinsic and intrinsic factors of development?
  • 3. Defining Development: Multiple definitions of development 1. The systematic use of scientific and technical knowledge to meet specific objectives or requirements. 2. The process of economic and social transformation that is based on complex cultural and environmental factors and their interactions. 3. Development is the act of expansion and growth. For example, in a country, development is classified as growth of the economy, growth of the people and the people's quality of life. Which definition of development is the best, and why? 3
  • 4. Development Thinking and Policy Involves • Different meanings of development over time • Different dimensions – economic, social, environmental, political • Different Stakeholders • Different Contexts: Cultural values, social practices, ecological conditions 4
  • 5. Major Traditional Approaches and definitions of development Perspectives Definitions • Modernization: Development is state-led economic growth – industrial modernity; China as a good example. 5
  • 6. 6
  • 8. • Neo-liberalism Development is Market-led economic growth. Policy: Get prices right; curb state failure through structural reform (deregulation, liberalization, privatization); USA, UK, India after Rajiv Gandhi, as examples. • Alternative Development: is society-led development should be equitable, sustainable, participatory. Themes: state & market failure; participation; local development • NGO led Development: When government is weak, market does not function, civic society is incapable, NGO led can lead development 8
  • 9. • Human development : Human capacitation and empowerment Themes: Human resource development, HDI • Post/Anti-development: Development is destructive, Western concepts and thrust on indigenous societies. Development for whom? Themes: Local level development, Gandhian thinking, “small is beautiful”, Environmental movements. 9
  • 10. Defining and measuring development Traditional Economic Measures Traditional economic measure (before 1970) – Capacity of national economy – Per capita income or per capita GNP – Gross Domestic Product (GDP): Simon Kuznets, 1934 – Industrialization: manufacturing & service industries – Social indicators – literacy, health, housing etc. Issues like poverty, discrimination, unemployment, and income distribution were not considered 10 CM in Developing Countries/Ch 1_HKS Some recent thoughts on Nepal’s development: http://kathmandupost.ekantipur.com/news/2016-12-05/political-bickering-unsafe-for- nepal.html
  • 11. New Economic Measures (Main 5) of Development (World Bank) • Economic Policy and Debt: There are three main subcategories in this class: "Balance of Payments," "External Debt" and "National Accounts." Indicators measure capital and financial accounts, as well as the current account and reserves. Measures of FDI, foreign trade and remittances, development assistance the country receives. and purchasing power parity are also included. • Financial Sector: There are five subcategories under this heading. "Assets" and "Capital Markets" are the two most general, and they include bank capital and market capitalization. The "Exchange Rates" subcategory includes measures of inflation. "Interest Rates" covers the lending interest rate, the deposit interest rate and the interest rate spread. The fifth subcategory, "Monetary Holdings," includes measures of liability and the money supply. • Poverty: This subcategory covers income distribution and poverty (nationally, percentage of rural population and urban populations). Income distribution is measured by quintiles and deciles. A heading called "Conflict and Fragility" measures battle-related deaths and homicides. • Private Sector and Trade: Under the heading "Private Sector and Trade" includes many indicators of the business environment, including imports and exports measured both in dollar value and by time-study indexes. There are statistics for tariffs here, as well as measures of travel and tourism. There are also measures of private infrastructure investment in this section, such as investment in energy, transportation and telecommunications. • Public Sector: Every year the World Bank assigns low income nations a set of ratings called "Country Policy and Institutional Assessment." These ratings are important because they determine the amount of money countries receive from the World Bank. You can find them under the "Public Sector" heading. They measure many variables, including transparency, budgetary management and environmental sustainability. Government finance is measured in this area--revenues, expenditures and deficits. A figure measuring the percentage of seats held by women in the national parliament is included. • Other Categories: The other categories of World Bank indicators include indicators that translate less directly into terms of financial or monetary terms. They include "Education," "Environment," "Health,"11
  • 13. The new economic view of development Dudley Seers (1969) What has been happening to POVERTY? What has been happening to UNEMPLOYMENT? What has been happening to INEQUALITY? If all three of these have been declined from high levels, then beyond doubt this has been a period of development for the country concerned. If one or two of these central problems have been growing worse, especially if all three have, it would be strange to call the result DEVELOPMENT even if per capita income doubled. 13CM in Developing Countries/Ch 1_HKS (1920-1983)
  • 14. 15 Goulet’s Three Core Values of Development (1971) – Sustenance: The ability to meet basic needs Self-esteem: A sense of worth and self respect (to be a person) Freedom from Servitude: To be able to choose CM in Developing Countries/Ch 1_HKS
  • 15. 16 Development must therefore be conceived of as a multidimensional process involving major changes in social structures, popular attitudes, and national institutions, as well as the acceleration of economic growth, the reduction of inequality, and the eradication of poverty. -Michael P. Todaro (2008) CM in Developing Countries/Ch 1_HKS How many years will it take to eradicate poverty from Nepal? What about eradicating absolute poverty? Should “reduction of inequality” or “provision of justice” be the aim of development?
  • 16. Capability approach Amartya Sen • What a person is, or can be, and does or can do? • 5 Disparities 1. Personal heterogeneities – age, gender, disabilities, illness etc. 2. Environmental diversities 3. Variations in social climate 4. Relational perspectives 5. Distribution within family 17CM in Developing Countries/Ch 1_HKS
  • 17. 18 Amartya Sen posits that all individuals are endowed with a certain set of capabilities while it is simply a matter of realising these capabilities that will allow a person to escape from poverty and their state of 'unfreedom‘. Sen questions a fundamental assumption of development economics, arguing that income poverty should not be the single most important factor in determining development. Sen argues that in spite of a world of sheer abundance, there simultaneously exist populations living in a state of 'unfreedom', unable to realise their capabilities. Sen attempts to expand the basic interpretations of freedom by examining five elemental forms of instrumental freedoms: political freedoms, economic facilities, social opportunities, transparency guarantees, and protective security. These forms of freedom are complementary, remaining interrelated and inextricable. For Sen, these freedoms constitute not only the means, but also the ends in development. Poverty, Sen asserts, should be seen "as a deprivation of basic capabilities, rather than merely as low income" (Sen, 1999), contesting the general belief amongst economists who view income as the be all and end all of development. He is known for bringing an "ethical dimension" to a field dominated by technical specialists. Based on the example of the former Soviet Union, Sen argued that political liberties are necessary for sustainable development. He compared the development strategies of India and China, arguing that Indian democratic processes provide a firmer guarantee of long term stable growth. Sen argued against the notion that a specific set of "Asian values" exists that might provide a justification for authoritarian regimes.
  • 18. 19 Economic Development Economic Growth Implications Economic development implies an upward movement of the entire social system in terms of income, savings and investment along with progressive changes in socioeconomic structure of country (institutional and technological changes). Economic growth refers to an increase over time in a country`s real output of goods and services (GNP) or real output per capita income. Factors Development relates to growth of human capital indexes, a decrease in inequality figures, and structural changes that improve the general population's quality of life. Growth relates to a gradual increase in one of the components of Gross Domestic Product: consumption, government spending, investment, net exports. Measureme nt Qualitative.HDI (Human Development Index), gender- related index (GDI), Human poverty index (HPI), infant mortality, literacy rate etc. Quantitative. Increases in real GDP. Effect Brings qualitative and quantitative changes in the economy Brings quantitative changes in the economy Relevance Economic development is more relevant to measure progress and quality of life in developing nations. Economic growth is a more relevant metric for progress in developed countries. But it's widely used in all countries because growth is a necessary condition for development. Scope Concerned with structural changes in the economy Growth is concerned with increase in the economy's output http://www.diffen.com/difference/Economic_Development_vs_Economic_Growth
  • 19. 20 Three Broad Objectives of National Development 1. To increase the availability and widen the distribution of basic needs • Food, shelter, health and protection • Rising per capita incomes • Elimination of absolute poverty • Greater employment opportunities, and • Lessening income inequalities are necessary but not the sufficient conditions for development. CM in Developing Countries/Ch 1_HKS Despite Having Robust Economic Growth, India is Backward in Healthcare, Sanitation, & Drinking Water https://thewaternetwork.com/article-FfV/despite-having-robust-economic-growth-india-is-backward-in-healthcare- sanitation-drinking-water-cL0PKwlcSTru0LUgrdRKXA, Feb 2016
  • 20. 21 2. To raise levels/standard of living: Enhanced material well-being as well as greater individual and national self-esteem 3. To expand the range of economic and social choices Free from servitude and dependence Three Broad Objectives of National Development CM in Developing Countries/Ch 1_HKS Any differences from Gautet’s three core values of development?
  • 21. 22
  • 22. 23
  • 23. 24
  • 24. 25
  • 25. 26 Sources of (under)development (intrinsic and extrinsic) • Intrinsic (factors that are within national control) • Attitudes and aptitudes - Attitudes and culture of the people; - Attitude towards: (a) change and development, (b) foreign direct investment, (c) research and innovation - Aptitudes (natural capacity/tendency) and behavior of the elites and leaders to effectively deal with internal and external developmental issues • Legal structures and institutions - Politics: Political stability, policy stability, legal stability - Governance: facilitate versus red tape, degree of transparency - Rule of law: uniform, fair and predictable application of law - Level of corruption - Local capital market - Security: financial and personal /physical • Institutional Set up to facilitate development process – Coordination and cooperation among the institutes Several theories of underdevelopment (For long list of theories of underdevelopment: http://www.professor-frithjof-kuhnen.de/publications/causes- of-underdevelopment/0.htm ) CM in Developing Countries/Ch 1_HKS
  • 26. 28 Extrinsic factors (factors that are beyond national control): - Geopolitical and commercial interest that it creates compared to other countries; (Porter’s Diamond Model); free access to international market, country need to proactively compete with other countries to attract FDI, grant/loan, technology transfer - Place of a country in a historical and cultural system; membership in multinational organizations, like UN, Common Wealth, ASEAN, NAFTA, SAFTA, - “Reforms” imposed in counterpart by multilateral organizations (like the IMF, World Bank, IFC, ADB, AIIB) to get out of situations of deficit and indebtedness in which the country is placed. - Lack of interest in and comprehension for the specific dynamics of a nation, by multinational companies. - Changes in financing/funding policies of multinational/multilateral organizations - Global Climate Change - Changes in policies and priorities of donor countries, and UN System - Protectionism of other countries - Image of country (business friendly, safety of investment and personnel, infrastructure, availability of human resources, reliability of power/energy, transparency, level of corruption, intellectual property right…) portrayed in influential foreign media and embassy advisory Sources of (under) development….(Contd.) CM in Developing Countries/Ch 1_HKS
  • 27. 29 Intrinsic Factors Impact on CMDC Attitudes and aptitudes Attitudes and culture of the people Attitude towards: (a) change and development, (b) foreign direct investment, (c) research and innovation Aptitudes (natural capacity/tendency) and behavior of the elites and leaders to effectively deal with internal and external developmental issues Legal structures and institutions Politics: Political stability, policy stability, legal stability Governance: facilitate versus red tape, degree of transparency Rule of law: uniform, fair and predictable application of law Level of corruption Local capital market Security: financial and personal /physical Institutional Set up to facilitate development process Coordination and cooperation among the institutes
  • 28. 30 Extrinsic Factor Impact on CMDC Geopolitical and commercial interest that it creates compared to other countries Place of a country in a historical and cultural system “Reforms” imposed in counterpart by multilateral organizations Lack of interest in and comprehension for the specific dynamics of a nation, by multinational companies Changes in financing/funding policies of multinational/multilateral organizations Changes in policies and priorities of donor countries, and UN System Protectionism of other countries Image of country portrayed in influential foreign media, embassy advisory, UN reports, Global Survey reports Global Climate Change
  • 29. 31 Countries fall into four broad human development categories, each of which comprises 47 countries: • Very High Human Development, • High Human Development, • Medium Human Development and • Low Human Development (46 countries in this category). 1. Developed countries (Canada, United States, European Union members, Japan, Israel, Australia, etc.) 2. Countries with an economy consistently and fairly strongly developing over a longer period (China, India, Brazil, South Africa, Costa Rica, Mexico, Egypt, much of South America, etc.) Countries are often loosely placed into four categories of development: CM in Developing Countries/Ch 1_HKS
  • 30. 3. Countries with a patchy record of development (most countries in Africa, Central America, and the Caribbean excepting Jamaica (category 2); much of the Arab world fall in this category) 4. Countries with long-term civil war or large- scale breakdown of rule of law or non- development-oriented dictatorship ("failed states") (e.g. Somalia, Sudan, Burma) Nepal ? 32CM in Developing Countries/Ch 1_HKS
  • 31. 33
  • 32. Common and Different Characteristics of Developing Countries 39CM in Developing Countries/Ch 1_HKS
  • 33. Developing countries are not homogeneous but are enormously diverse in their structure. In particular it is stressed that the developing world differs in: • Population and geographic size. • Language and religion. • Experiences in the colonial era. • Levels of education. • Natural resource endowments. • Types of industry. • Role of government and degree of democracy. • Degree of dependency in international economic and political affairs. 40Do these parameters have impact on CMDC?
  • 34. Development Indicators/Indices Genuine Progress Indicator • GPI: Among the things it considers are income distribution for each country, along with household and volunteer work (activities that enhance welfare but do not involve monetary transactions), and, for example, the cost of environmental degradation. Ecological Economics doi: 10.1016/j.ecolecon.2013.04.019 (2013) 42
  • 35. HDI as a development Criterion • The Human Development Index (HDI) is a composite statistics used to rank countries by level of "human development" and distinguish "very high human development", "high human development", "medium human development", and "low human development" countries. The Human Development Index (HDI), developed by Dr. Mahboob ul Haq of Pakistan, is a comparative measure of life expectancy, literacy, education and standards of living for countries worldwide. It is a standard means of measuring well-being, especially child welfare. It is used to distinguish whether the country is a developed, a developing or an under-developed country, and also to measure the impact of economic policies on quality of life. 43
  • 36. 44
  • 37. 45
  • 38. 46 Nepal’s Position: 157 in 2011 and 2012. Nepal’s HDI 0.458 (2011) and 0.463 (2012), South Asia HDI 0.558 (2012). HDI Report 2013, as reported in Aarthik Abhiyan Rastriya Dainik, March 16, 2013, page 1
  • 39. Gross National Happiness as a development criterion 9 Domains and 33 Indicators of GNH: • Psychological Well being • Health • Time use • Education • Cultural diversity and resilience • Good governance • Community vitality • Ecological diversity and resilience • Living standard Source: www.grossnationalhappiness.com Nepal ranked in 121st position in Happy Country in 2015. World Happiness Report 2015; http://81c27a5d9c3263e8ebcc- 2da201d1ba4d5004cb235610c26ba057.r67.cf5.rackcdn.com/WHR15.pdf
  • 40. 48
  • 41. 49 The World's Happiest Countries Christopher Helman,01.19.11, "To use economic measurements alone to gauge the success of a nation would be equivalent to assessing the entire condition of a man simply by looking at his bank balance," Peter Mandelson, former U.K. economic minister. To that end, the inputs used to create the index are both objective and subjective: that's because it's not enough to know hard data like a country's unemployment or inflation rates. It also matters how hard people think it is to find jobs, how convinced they are that hard work can bring success. This can get complicated. In Nepal, for example, inflation is 11%, unemployment 46%. Yet a surprisingly high 50% of the people say they are satisfied with their standard of living and 81% have confidence in their banks. Could be they're scared of voicing their true opinion in a shaky democracy, or maybe the Nepalese are just endemically happier people. Legatum adjusts for this, adding a variable called "ability to express political opinion without fear." What's the most prosperous country in the world? Norway. What's it got that the rest of the world doesn't? The biggest bump comes from having the world's highest per capita GDP of $53,000 a year. Norwegians have the second-highest level of satisfaction with their standards of living: 95% say they are satisfied with the freedom to choose the direction of their lives; an unparalleled 74% say other people can be trusted. Cynics (particularly those leaving comments on Legatum's excellent website) say Norway's ranking is a fluke, that it's a boring, godless (just 13% go to church) homogeneous place to live with a massive welfare state bankrolled by high taxes. Without massive offshore reserves of oil and gas that it exports to the world through state-controlled Statoil ( STO - news - people ), Norway's GDP would be far smaller. And yet joining Norway in the top 10 prosperous countries are its Scandinavian sisters Denmark, Finland and Sweden, with equally small and civilized Switzerland and the Netherlands also in the club. None of these countries are blessed with great hoards of oil and gas.
  • 42. 50 Index Rank Corruption Perceptions Index 130 / 168 Global Competitiveness Report 99 / 140 Global Enabling Trade Report 116 / 138 Index of Economic Freedom 152 / 178 International Logistics Performance Index (LPI) 105 / 160 Inward FDI Potential Index 133 / 139 KOF Index of Globalization 162 / 187 Networked Readiness Index (NRI) 112 / 142 Open Budget Index 84 / 102 http://globaledge.msu.edu/countries/nepal/memo Nepal’s Rank in various development Indices, 2016
  • 43. 51 Common Parameters between HDI and GNH Un-common Parameters between HDI and GNH Formula to calculate HDI: Numerical Example:
  • 44. 1. High population growth rate Nepal as an example: • Total population - 23151423 (2058 BS) • Population growth rate - 2.25 % • Would be double by 2095 BS (2039) • 2010: 29959364 • 2009: 29432743 • 2008: 28905358, according to the World Bank. 52CM in Developing Countries/Ch 1_HKS 10 Common Features of Developing Countries http://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&met_y=sp_pop_grow&idim =country:NPL&dl=en&hl=en&q=population+growth+rate+nepal
  • 45. 2. Low level of living (low income, inequality, poverty) S. No. Countries GDP per capita (US $) HDI (177) 1 China 2000 81/101 2 Bangladesh 450 140 3 Bhutan 1430 133 4 India 820 128/134 5 Maldives 3010 100 6 Nepal 320/640(2005) 142/157 7 Pakistan 800 136 8 Sri Lanka 1310 99 53 Economic Survey July 2008/2011. HDI calculation method changed since 2010. CM in Developing Countries/Ch 1_HKS GDP Growth Rate: 2008/9/10/11: 6.1/ 4.9/ 4.6/ 4.5 GDP Per Capita – PPP: 1329 International Dollars, 2005 http://www.gfmag.com/gdp-data-country-reports/212- nepal-gdp-country-report.html#axzz1l22MoAdi
  • 46. • 30.85 % below poverty line (NLSS 2003/04) based on Rs. 7696 as the average national poverty line. • 24.1 % below poverty line as per 1 dollar per day based on purchasing power parity (PPP). 54CM in Developing Countries/Ch 1_HKS
  • 48. Inequality S. No. Description % below poverty line 1 Dalit 46 2 Janajati living in hilly areas 44 3 Muslim 41 4 Terai Janajatis 35 5 Minority castes 31 6 Newars 14 7 Brahmin/Chettris 18 8 Middle level 21 56 Three Year Interim Plan, Mangsir, 2064
  • 49. 3. Low levels of productivity 57 Low nutrition Low health Low productivity Low income CM in Developing Countries/Ch 1_HKS
  • 50. 4. Agro based economy S. No Industries 2000/01 2004/05 2007/08 1 Agriculture & forestry 36.15 34.71 32.12 2 Fishing 0.43 0.47 0.48 3 Manufacturing 9.03 7.92 7.06 4 Construction 6.01 6.47 6.44 5 Real estate, renting & business activities 8.29 8.69 9.91 58CM in Developing Countries/Ch 1_HKS Composition of GDP in percentage (Economic Survey, July 2008) Agriculture Industry + Manufacturing Manufacturing only Services 34 16 7 51
  • 51. 59
  • 52. 5. Unemployment and underemployment 60 S. No. Descriptions % age 1 Population relied on agriculture as main occupation 78 2 Employed (15 years above) 74.3 3 Unemployed (Male 3.1 % & Female 2.7) 2.9 4 Inactive 22.8 Based on NLSS 2060/61 Three Year Interim Plan, Mangsir, 2064
  • 53. 61 year Economic growth GDP current U.S. dollars GDP constant dollars GDP per capita current dollars GDP per capita PPP GDP per capita constant dollars HDI Inflation Capital investment percent of GDP Capital investment in dollars Household consumption percent of GDP Household consumption in dollars Savings percent of GDP 2000 6.2 5.49 6.9 231.43 1539.77 459.13 0.449 2.5 24.31 1.34 75.88 4.17 21.6 2001 4.8 6.01 7.2 248.83 1586.88 473.18 2.7 22.39 1.35 80.23 4.75 17.72 2002 0.12 6.05 7.2 246.8 1564.42 466.48 3 20.25 1.23 82.11 4.89 15.81 2003 3.95 6.33 7.5 254.55 1603.13 478.02 5.7 21.41 1.36 82.77 5.15 23.5 2004 4.68 7.27 7.9 288.67 1656.27 493.87 2.8 24.53 1.78 79.61 5.68 25.97 2005 3.48 8.13 8.1 318.75 1693.15 504.87 0.477 6.8 26.45 2.15 79.55 6.34 26.27 2006 3.36 9.04 8.4 350.61 1730.61 516.04 6.9 26.85 2.43 82.33 7.3 26.69 2007 3.41 10.33 8.7 396.17 1771.16 528.13 5.7 28.69 2.96 80.98 8.18 28.15 2008 6.1 12.55 9.2 476.56 1860.61 554.8 0.501 9.9 30.32 3.8 80.28 9.86 27.45 2009 4.53 12.85 9.6 483.4 1925.39 574.12 11.1 31.67 4.07 79.79 10.05 35.85 2010 4.82 16 10.1 595.43 1996.86 595.43 0.527 9.3 38.27 6.12 78.56 12.3 33.6 2011 3.42 18.91 10.4 695.88 2042.14 608.93 0.533 9.3 37.99 7.18 76.46 14.14 36.12 Source: http://www.theglobaleconomy.com/indicators_data_export.php
  • 55. As per national census 2058 • Youth unemployment – 11.43 % • Among total labor force – 70.6 % are involved on agriculture and 29.4 % on non-agriculture sector. • It is estimated that in 2064 total labor force has reached 11.4 million with the annual increment rate of 2.6 %. • Also estimated is yearly 3,00,000 labor force will enter Nepalese labor market 63
  • 57. 7. Underutilized natural resources • Though Nepal is rich in natural and human resources, the resources have not been optimally utilized, thereby, Nepalese people sometimes referred to as “poor in a rich country”. Economic Survey July 2008 65
  • 58. Identified locations for cement industries: Baitadi, Udayapur, Dhankuta, Salyan, Arghakhanchi Identified locations for iron – mine based industries: Dang, Salyan, Rolpa, Palpa 66
  • 59. 8. Foreign trade orientation • Trade deficit increased by 37.7 % to 102.85 billion in the first eight months of FY 2007/08 • Share of trade deficit with India was 62.1 % and with other countries by 37.9 % in the review period. 67
  • 60. 9. Low concern over time • Time is not considered as important. • People enjoy more free time • “Will do tomorrow” attitude • “Personal problem” considered • Strikes, Chakkajam, • long list of holidays – democracy, loktantra, republic – Death of people, student, teacher, official … • Road maintenance at office time … • Project delay 68CM in Developing Countries/Ch 1_HKS
  • 61. 10 Low moral orientation • High level of bribery • Low level of – (a) Work ethics – (b) Professionalism and – (c) Integrity 69
  • 62. 11 Too many organizations (?) 70
  • 63. 71 End of Chapter 1 Common Characteristics Impact on CMDC Different Characteristics Impact on CMDC
  • 64. Test yourself. Answer them using different resources. Chapter 1: Concept of Development, Characteristics of developing & developed countries • Select the most critical intrinsic (only one) and extrinsic (only one) cause of underdevelopment of a country. Defend your selection (i.e., explain why that particular cause is most critical in comparison to other causes. • Nepal is aspiring to be promoted to “developing country” from its current status of “lease developed country”. To achieve this goal, which national development parameters (select only two) should be improved, and why? • What should be the proper development model for a developing country: (a) state led, (b) Market led and (c) Society led? Explain with reasons and examples. • Nepal has practiced planned development since the last half century, yet Nepal is still one of the least developed countries. List top three reasons for this state of Nepal (reasons for failure of planned development), and propose practical solutions to overcome each of them. • Despite abundant natural resources (like fresh water, forest, herbs, natural beauty, bio-diversity) many developing countries, including Nepal, are reeling under extreme pressures of underdeveloped infrastructure. Analyze the intrinsic and extrinsic factors of underdeveloped state of Nepal. • Defining development of a country is a complex issue. Discuss the economic, social, cultural, and environmental factors that may be used to define development. • The traditional economic indicators of development of a country have been challenged by recent scholars of development. Can a country be economically developing and still be underdeveloped? 72
  • 65. Test yourself. Answer them using different resources. Chapter 1: Concept of Development, Characteristics of developing & developed countries • The basic economic indicators of development of a country may be increasing positively, but the country may still be underdeveloped for many years. Agree or disagree? Give reasons. • Discuss the basic similarities (common features) and differences among different developing countries? • Is there any relationship between the Human Development Index and Gross National Happiness? Explain. • Which one should be the ultimate measure of development: Human Development Index or Gross National Happiness? Explain with appropriate reasons. • Discuss the intrinsic and extrinsic factors of underdevelopment of a country. Explain these factors in context of Nepal. • Is there any relationship between the level of development of a country and the construction management methods used in the country? Discuss. • Discuss the major factors of underdevelopment of a country. Explain these factors in context of Nepal. 73
  • 66. 74
  • 67. 75 साइकलमा कार्ाालर् एउटा डरलाग्दो रोग नेपाली समाजमा विस्तार हुँदै गरेकोमा मलाई चिन्ता लाग्छ। समाजका विद्धत् िगग पनन सञ्िारमाध्यममा आएका समािारका भरमा वििार बनाउुँछन्। संिारमाध्यमहरू आग्रहराखेर समािारका शीर्गक बनाउछन्। महहलाहहंसामा सरकारले िालेका कदमबारे प्रेससिज्ञप्ती प्रकाससत गयौं तर कनैपनन पत्रिकाले छापेन। गेरखापिले समेत छापेन तर गरेको कामको पनन गरेन भनेर गाली र सरकारको अलोिना भने सबैले छापे। जनतालार्ग ससूचित गनग त गरेकाकाम छापेर कमजोरी देखार्गहदन पने चियो तर हाम्रो दभागग्य। मान्छेहरू दल/अनहार, भूगोल िा आफ्नो र्च्छा स्िािगसुँग जोडेर कसैका कामको प्रशंसा िा आलोिना गछगन्। विर्यिस्तको गहहरार्मा पगेर साङ्गोपाङ्गो विश्लेर्ण गरेर आग्रहरहहत िस्तपरक वििारको सट्टा सतही हटकाहटप्पणी र कहहलेकाहीं तरुन्तै ननष्कर्ग मा पग्छन्। कनतपयले समस्याको जड एउटा नेतामा िा समस्या समाधानको छडी अको नेतामा देख्छन्। मान्छेलाई देित्ि िा दानित्िकरण गने, जटील सामाजजक आचिगक समस्याको एउटा सपाट उत्तर खोज्ने, फलानो ठीक भएपनछ सबै ठीक हन्छ भन्ने मान्यता राख्ने बौद्चधक जमात बढीरहेको छ। आफ्नो खास काम बाहेक सबै काम जान्ने हनखोज्ने, अकागको आलोिनामा रमाउने, आफ्नो कतगव्य होर्न, अचधकारका मािै करा गने, सजजलै र तरुन्तै उत्तर खोज्ने, अधैयग, उत्तजेक र हहंसक बन्दै छ यिा पस्ता। अकागको दुःखमा रमाउने, अह्राएको काम माि गने, जोखखम नउठाउने, अन्य मलकलाई राम्रो र आफ्नालाई नराम्रो देख्ने, व्यजतत, पररिार आफन्त, र्ष्टसमि र दलगत नाफाघाटामा रमाउने, पढ्ने पढाउने एउटा तर व्यिहार अकै गने, आत्मविश्िास नभएको, अरुले सहयोगको अपेक्षामा हदनरात दौड्ने तार त्यही समय सृजनाशीलता र समहहनतमा नखिगने, भनसन, दिाि िा पैसामा सबैकाम हन्छ भन्ने धारणा राख्ने, आफ्नो सन्तान विदेशीको गलाम बनेकोमा गिग गने, आफ्नै माटोमा गररने शारीररक कामलाई हेय ठान्ने, पढेको तर के ही पनन सीप नभएको, कसैलाई लगाएको गणको प्रनतफल खोज्ने, पैसालाई सबैिोक ठान्ने, आफ्ना बाबआमा र बालबच्िाको स्याहार नगने तर यरोप-अमेररका िा र्जरायलमा बृद्ध र बच्िाको साहै राम्रो स्याहार गने, दयामाया, ममता, सदािार, सुँस्कृ नत, र्नतहास, भूगोल बारे बेखिर जमात पनन देखखदैछ। उपयगतत िररिले समाजलाई पतनोन्मख बनाउुँछ। अहहले हामीलाई समहहनती, दरदृष्टीयतत, दृढ, सक्षम, स्िच्छ, मलकप्रनत माया भएको (राष्रप्रेमी), आत्मविश्िास भएको, पौरखमा विश्िास गने, ससतने तत्परता र र्च्छाशजतत भएको, सामाजजक प्राणीको खाुँिो छ। लीलामखण पौड्याल, १ जनिरर २०१३
  • 68. 11. Dualism Dualism holds to the belief that there are two elements of existence: Physical and Spiritual 76
  • 69. American values (Robin Williams, 1970) • Achievement and success • Activity and work • Moral orientation • Humanitarianism • Efficiency and practicality • Progress • Material comfort • Equality 77CM in Developing Countries/Ch 1_HKS
  • 70. American values (Robin Williams, 1970) 78 o Freedom o External conformity o Science and rationality o Nationalism – patriotism o Democracy o Individual personality o Group – superiority themes