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

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

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

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

Mostly the level of economic development is used as a base to classify countries by International Investors. There are several other classification bases used like social and economic criteria, per capita income, literacy rate, life expectancy rates etc. On the basis of such statistical criteria, Less Developing countries, 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 who are less developed. These titles have becomes a topic of criticism. However, they are still commonly used by International Organisations and Investors.

Examples of Developing Countries

Some of the Developing countries are:

  1. Afghanistan
  2. Bangladesh
  3. Combodia
  4. Ethiopia
  5. Guinea
  6. Liberia
  7. Mauritias
  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 they will either already have a large population or have a high population growth rate. This often happens because of a lack of family planning and sex education. One more reason is that people often think that more children mean more income source in the family. The increased population is 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 usually affected by Low Per Capita Income, and in-turn it results in lower investments and lower savings. This means that an average person is not able to earn enough income to further save or invest. Hence, he spends all the money he earns. This creates a poverty cycle.

3. Primary Sector Dependence

Majority population of the Low Income Countries are 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.

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4. High Unemployment Rates

People in the 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 a 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