(a) What is economic development? (b) State three features of a developing country. (c) Explain any four factors that can speed up the economic development ...

Answer Details

(a) Economic development is the process by which a country improves the economic, social and political well-being of its people. It goes beyond a mere rise in national output (economic growth) to include a rising standard of living, better income distribution, and improvements in education, health, employment and institutions.

(b) Three features of a developing country:

• Low per capita income and widespread poverty.
• Heavy dependence on agriculture and primary products for output, employment and exports.
• High population growth rate with a high dependency ratio, and low levels of literacy, health and infrastructure.

(c) Four factors that can speed up economic development:

1. Capital formation (investment): raising savings and investment in machinery, factories and infrastructure increases productive capacity and output.
2. Development of human capital: investing in education, training and health produces a skilled, healthy and more productive labour force.
3. Provision of infrastructure: good roads, electricity, water and communication lower the cost of production and attract investment.
4. Political stability and good governance: peace, security and sound economic policies create the confidence needed for local and foreign investment. (Also acceptable: adoption of modern technology and diversification of the economy.)