The countries in which the process of development has started but is not completed and have a developing phase of different economic aspects or dimensions like per capita income or GDP per capita, human development index (HDI), living standards, or fulfillment of basic needs, and so on. The UN identifies developing countries as a country with a relatively low standard of living, underdeveloped industrial bases, and moderate to low human development index. Therefore, developing nations are those nations of the world, which have lower per capita income as compared to developed nations like the USA, Germany, China, Japan, etc. Here we will discuss different characteristics of developing countries of the world.
Developing countries have been suffering from common attributes like mass poverty, high population growth, lower living standards, illiteracy, unemployment and underemployment, underutilization of resources, socio-political variability, lack of good governance, uncertainty, and vulnerability, low access to finance, and so on.
Developing countries are sometimes also known as underdeveloped countries or poor countries or third world countries or less developed countries or backward countries. These countries are in a hurry for economic development by utilizing their resources. However, they are lagging in the race of development and instability. The degree of uncertainty and vulnerability in these countries may differ from one to another but all are facing some degree of susceptibility and struggle to develop.
The common characteristics of developing nations are briefly explained below.
Major Characteristics of Developing Countries
Low Per Capita Real Income
The real per capita income of developing countries is very low as compared to developed countries. This means the average income or per person income of developing nations is little and it is not sufficient to invest or save. Therefore, low per capita income in developing countries results in low savings, and low investment and ultimately creates a vicious cycle of poverty. This is one of the most serious problems faced by underdeveloped countries.
Most individuals in developing nations have been suffering from the problem of poverty. They are not able to fulfill even the basic needs. The low per capita in developing nations also reflects the problem of poverty. So, poverty in underdeveloped countries is seen in terms of lack of fulfillment of basic needs, illiteracy, unemployment, and lack of other socio-economic participation and access apart from low per capita income.
Rapid Population Growth
Developing countries have either a high population growth rate or a larger size of the population. There are different factors behind higher population growth in developing countries. The higher child and infant mortality rate in such countries compel people to feel insured and give birth to more children. Lack of family planning education and options, lack of sex education, and belief that additional kids mean additional labor force and additional labor force means additional income and wealth, etc. also stimulate people in developing countries to give birth to more children. This is also supported by the thought of conservatism existed in such nations.
The Problem of Unemployment and Underemployment
Unemployment and underemployment are other major problems and common features of developing or underdeveloped nations. The problem of unemployment and underemployment in developing countries is emerged due to excessive dependency on agriculture, low industrial development, lack of proper utilization of natural resources, lack of workforce planning, and so on. In developing nations, the problem of underemployment is more serious than unemployment. People are compelled to engage themselves in inferior jobs due to the non-availability of alternative sources of jobs. Underemployment problem in high extent is found especially in rural and back warded areas of such countries.
Excessive Dependence on Agriculture
The majority of the population in developing nations is engaged in the agriculture sector, especially in the rural areas. Agriculture is the only sole source of income and employment in such nations. This sector has also a higher share of the gross domestic product in poor countries. In the case of the South Asian economies, more than 70 percent population is, directly and indirectly, engaged in the agriculture sector.
The development of a nation is a positive and increasing function of innovative technology. Technological use in developing countries is very low and used technology is also outdated. This causes a high cost of production and a high capital-output ratio in underdeveloped nations. Because of the high capital-output ratio, high labor-output ratio, and low wage rates, the input productivity is low and that reduces the gross domestic product of the nations. Illiteracy, lack of proper education, lack of skill development programs, and deficiency of capital to install innovative techniques are some of the major causes of technological backwardness in developing nations.
Duality or dualism means the existence of two sectors as the modern sector or advanced sector and the traditional or back warded sector within an economy that operates side by side. Most developing countries are characterized by the existence of dualism. Urban sectors are highly advanced and rural parts are having the problems like a lack of social and economic facilities. People in rural areas are majorly engaged in the agriculture sector and in urban areas they are in the service and industrial sector of an economy.
Lack of Infrastructures
Infrastructural development like the development of transportation, communication, irrigation, power, financial institutions, social overheads, etc. is not well developed in developing nations. Moreover, developed infrastructure is also unmanaged, and not distributed efficiently and equitably. This has created a threat to development in such nations.
In developing nations, the productivity of factors is also low. This is due to a lack of capital and managerial skills for getting innovative technologies, and policies and managing them efficiently. Malnutrition, insufficient health care, a healthy support system, living in an unhygienic environment, poor health and work-life of workers, etc. are factors that are attributed to lower productivity in the developing nations.
High Consumption and Low Saving
In developing countries, income is low and this causes a high propensity to consume, a low propensity to save and capital formation is also low. People living in such nations have been facing the problems of poverty and they are being unable to fulfill most of their needs. This will compel them to expend more portion of their income on consumption. The higher portion of consumption out of earned income results in a lower saving rate and consequently lower capital formation. Ultimately these countries will depend on foreign aid, loans, and remittance earnings that have limited utility to expand the economy.
The above-explained points show the state and characteristics of developing countries. Apart from explained points, excessive dependency on developed nations, having inadequate provisions of social services like education facilities, health facilities, safe drinking water distribution, sanitation, etc., and dependence on primary exports due to lack of development and expansion of secondary and tertiary sectors of the economy, etc. are also major characteristics of developing countries of the world. These countries are affected more severely by the economic crisis derived from the coronavirus of 2020. So, challenges to development for developing nations have been added furthermore. In a summary, the major characteristics of developing countries are presented in the following table.
|1||Low Per Capita Real Income|
|3||Rapid Population Growth|
|4||The problem of Unemployment and Underemployment|
|5||Excessive Dependence on Agriculture|
|8||Lack of Infrastructures|
|10||High Consumption and Low Saving|
Ahuja, H.L (2016). Advanced Economic Theory. New Delhi: S Chand and Company Limited.
Todaro, M.P. & Smith, S.C. (2009). Economic Development. New York: Pearson Education.