02. Comparative Economic Development.pdf

COMPARATIVE ECONOMIC DEVELOPMENT Jose Angelo V. Gomez, LPT, MBA  LEARNING OBJECTIVES 1. Define comparative development and its significance in the study of economics. 2. Describe the various indicators used to measure economic development, including GDP, GNI, and HD...

COMPARATIVE ECONOMIC DEVELOPMENT Jose Angelo V. Gomez, LPT, MBA  LEARNING OBJECTIVES 1. Define comparative development and its significance in the study of economics. 2. Describe the various indicators used to measure economic development, including GDP, GNI, and HDI. 3. Identify and compare key characteristics of developed and developing countries.  DEVELOPMENT ECONOMICS A field of economics that focuses on understanding and promoting economic growth and development in developing countries. It examines factors that contribute to poverty, inequality, and economic stagnation, and explores policies and strategies that can help countries achieve sustainable economic growth and improve the life of their citizens. Poverty threshold - Php13,875 per month for a family of five (NEDA, 2024)  COMPARATIVE DEVELOPMENT The practice of comparing the economic, social, and political development of different countries or regions to understand and analyze the disparities and differences in their levels of development. HOW ARE COUNTRIES CLASSIFIED?  BY INCOME GROUP The World Bank Group assigns the world’s economies to four income groups:  BY INCOME GROUP Southeast Asia Ranking for 2023-2024 Lower Middle Income Upper Middle Income High Income Philippines Indonesia Singapore Myanmar Thailand Brunei Cambodia Malaysia Timor Laos Vietnam  OTHER METHODS OF CLASSIFYING DEVELOPMENT Degree of International Indebtedness Severely indebted Moderately indebted Less indebted World Economic Situation And Prospects Classification Developed Economies Economies in Transition Developing Economies International Finance Corporation Classification Emerging Markets Frontier Markets  BASIC INDICATORS OF DEVELOPMENT Real Health Education Income  GROSS NATIONAL INCOME The total income earned by a country's residents and businesses, including income earned abroad and minus the income earned by foreign residents within that country. Real Income  GROSS NATIONAL INCOME Concern: Per capita GNI comparisons between developed and less developed countries are exaggerated using official foreign-exchange rates to convert national currency figures into U.S. dollars. This conversion does not measure the relative domestic purchasing power of different currencies. Real Income  PURCHASING POWER PARITY Calculation of GNI using a common set of international prices for all goods and services, to provide more accurate comparisons of living standards. Real Income  PURCHASING POWER PARITY PPP is based on the idea that, in the absence of transportation costs and other trade barriers, identical goods should sell for the same price in different countries when expressed in a common currency. Real Income  BASIC INDICATORS OF DEVELOPMENT Real Health Education Income  LIFE EXPECTANCY A statistical measure that represents the average number of years a person or a population of people is expected to live, based on current mortality rates and other demographic factors. Health Education  UNDERNOURISHMENT Consuming too little food to maintain normal levels of activity. Health Education  BIRTH RATE The number of live births in a given population during a specific period, usually a year, per 1,000 people in the population. Health Education  LITERACY RATE Basic Literacy - the ability to read and write individual letters. Functional Literacy - the ability to read, write, and comprehend text well enough to effectively engage in everyday life activities and tasks that require basic reading and writing skills. Health Education  HOLISTIC MEASURES OF LIVING LEVELS AND CAPABILITIES HUMAN DEVELOPMENT INDEX a metric compiled by the United Nations Development Programme and used to quantify a country's "average achievement in three basic dimensions of human development: a long and healthy life, knowledge, and a decent standard of living." TOP 10 COUNTRIES WITH THE LOWEST HDI (2022) 1. Somalia: 0.380 2. South Sudan: 0.381 3. Central African Republic: 0.387 4. Niger: 0.394 Chad: 0.394 5. Mali: 0.410 6. Burundi: 0.420 7. Yemen: 0.424 8. Burkina Faso: 0.438 9. Sierra Leone: 0.458 TOP 10 COUNTRIES WITH THE HIGHEST HDI (2022) 1. Switzerland: 0.967 2. Norway: 0.966 3. Iceland: 0.959 4. Hong Kong: 0.956 5. Denmark: 0.952 Sweden: 0.952 7. Ireland: 0.950 Germany: 0.950 9. Singapore: 0.949 10. Australia: 0.946 CHARACTERISTICS OF THE DEVELOPING WORLD  Lower levels of Lower levels of Higher Levels of human capital Higher Population living and Inequality and (health, education, Growth Rates productivity Absolute Poverty skills) Larger Rural Lower Levels of Greater Social Populations but Industrialization Adverse Fractionalization Rapid Rural-to- and Manufactured Geography Urban Migration Exports Underdeveloped Colonial Legacy Financial and and External Other markets Dependence HOW LOW-INCOME COUNTRIES TODAY DIFFER FROM DEVELOPED COUNTRIES IN THEIR EARLIER STAGES  Physical and human resource endowments Per capita incomes and levels of GDP in relation to the rest of the world Climate Population size, distribution, and growth Historic role of international migration International trade benefits Basic scientific/technological research and development capabilities Efficacy of domestic institutions END