What is a Developing Country? | Definition, Examples vs Characteristics

Developing countries are those countries where agriculture is their primary industry, and they have low GDP (Gross Domestic Product) rates per capita. These countries are in the process of reaching economic maturity.

To a certain level, Developing countries are defined based on their economic output. Many definitions are given to understand Developing Countries, and many debates have failed to draw a line between developed and developing countries. Hence there is no definite way to define Developing Countries.

For instance, the United Nations uses factors like a low-income economy based on the GNI (Gross National Income) per capita to distinguish between developing and developed countries. However, the World Bank has stopped using such a way for distinction.

The economic development level is mostly used as a base to classify countries by International Investors. Several other classification bases, like social and economic criteria, per capita income, literacy rate, and life expectancy rates, are used. Based on such statistical criteria, Less Developing countries or Emerging countries have relatively lower ratings.

Developed countries are those who are more developed as compared to Less-Developed countries. And Less Economically Developed Countries (LEDCs) or Frontier Markets are those that are less developed. These titles have a topic of criticism. However, they are still commonly used by International Organisations and Investors.

Key Takeaways

1. A developing country is a nation that is still in the process of improving its economic, social, and political conditions.
2. Developing countries have lower industrialization and human development levels than developed countries.
3. Developing countries may face challenges such as poverty, inequality, and lack of access to basic services.

Examples of Developing Countries

Some of the Developing countries are:

1. Afghanistan
2. Bangladesh
3. Cambodia
4. Ethiopia
5. Guinea
6. Liberia
7. Mauritius
8. Niger
9. Sudan
10. Uganda
11. Yemen
12. Zambia

5 Characteristics of a Developing Country

1. High Rate of Population Growth

One of the characteristics of a developing country is that it will either already have a large population or have a high population growth rate. This happens because of a lack of family planning and sex education. Another reason is that people think that more children mean more income sources in the family. The increased population in the last decade could be because of the lower death rate than the birth rate through increased and effective health care.

2. Low Per Capita Income

Developing countries are affected by Low Per Capita Income, and in turn, it results in lower investments and lower savings. This means that an average person cannot earn enough income to save further or invest. Hence, he spends all the money he earns. This creates a poverty cycle.

3. Primary Sector Dependence

The majority of the population of Low-Income Countries is based in rural areas. The demand structure changes when there is a rise in the income level. Thus, it leads to the growth of the manufacturing industry and later to the service industry.

4. High Unemployment Rates

People in rural area suffers from unemployment because of huge seasonal variations. Unemployment is a much more complex problem which requires solutions beyond the traditional fixes.

5. Dependency on the Exports of Primary Commodities

A significantly huge proportion of output is obtained from the primary sector. Also, a large portion of export is part of a primary commodity.

References

1. https://link.springer.com/article/10.2307/2061629
2. https://www.nber.org/papers/w4132
3. https://academic.oup.com/restud/article-abstract/64/3/311/1585081