TEP 02: Development

Welcome to TEP Lecture 02: Development. Today, we are again honour to invite Dr.John Pacs Professor of Economics and Social Science from the University of Centreford. Well, let welcome him.

*Applause. Dr John Pacs move up to the mic, hold his breath and starts to speak.

Good Evening and before we started, I had a pretty significant response on my last lecture about Poverty Reduction. I just want to clarify that all measures and policies has its pros and cons and the purpose of the last lectures was to introduce some of the common measures taken to alleviate poverty. Well, there are other ideas which I had not introduced and I shall go through it in another lecture if time allows.

For TEP Lecture 02, we are going to explore on the topic of development. Looking at the NS and RL world, we see development of the country both large and small. Some countries that had a rapid rate of development while some fallen to a stagnation or had slow development in the country. We will be looking at how to measure the development of the country, what constitute high or low development of the country and the factors that affects process of development.

So what is development?
Development is the continuous and ongoing process of improving standard of living of people to give them better quality of life. Standard of living means living condition in which people live. It depends on the accessibility to basic needs such as education, healthcare and other amenities. Quality of life means lifestyle of the people and the degree of satisfaction that the people had with their living condition.

So, how do we measure development and what constitute development of the country? Well, one of the widely used statistics is the Human Development Index or HDI. It calculates development by combining the average life expectancy, education index, adult literacy rate, gross enrolment index (level of education among the population) and gross domestic product of the country. In short, it takes into account of three factors: economic well being, health and education of the people in the country.

Economy well being: The performance of the country’s economy affects the standard of living and the quality of life of the citizen. If the economy of the country is doing well, then the people are likely to have better income and job which leads to better standard of living and quality of life. If the economy is doing badly, then the opposite effect will happen. To know how well an economy is doing, we can look into the average income or GDP per capita in the country. GDP per capita refers to the economic wealth of a country measured in terms of the total value of the good and services produced by each resident of a country. It is by dividing the GDP or the total revenue generated by the country with the population in the country.

Employment Structures: The proportion of labor forces that are subscribed into certain economic sector or industries can really affect the wealth or the income of the people and the country. This is because certain sectors can produce high value goods and service than other sectors. To understand this, we firstly classified the industry into 3 groups: primary industry, secondary industry and tertiary industry.

In a primary industry, it involves in resource extraction such as agriculture, mining, timber and fisheries. Resource extractions produce unrefined goods and are usually value in bulk or wholesale, so it does not generate lot of income. In a secondary industry, it involves in manufacturing and it includes mineral processing, factory production and construction. This is where the industry produces high value and refined products that are able to generate more income and profits for the nation. If the majority of the workforces reach this stage, it usually considered the industrialization period for the country. Next, it is the tertiary industry. At this point, the majority of the employment should come from the tertiary sector and both primary & secondary industry deployed more automatons to improve productivity but demand for labor forces in both sectors goes down. It included financial services, logistics, tourism, media, hospitality, healthcare, education and others that are related to services.

Here are some examples of employment structures:

• Ghana is a developing country in the sub-Saharan Africa. It mainly depends on agriculture, timber and mining as a source of revenue for the country that why huge proportion of the labor force represented the primary industries. Agriculture already takes on 55% of the country’s workforce. Manufacturing and services play a small role in the economy of Ghana but both sectors are growing. Based on 2009 UN data, HDI of the country is 0.526 and was graded 152nd in the world.

• Brazil is a developing and highly industrialized country in the South America. Agriculture takes about 15% of the labor force with the rest goes to other form of resource extraction. Most of the labor forces in the manufacturing sectors had been continuously replaced by machinery and automaton. Tertiary industry takes on a huge chunk of the labor forces and this is because tourism plays an increasingly huge role in the economy, leading to a rise in revenue and demand in services. A 2009 UN data shows the country’s HDI at 0.813 and was graded 75th most developed country in the world.

• UK is a developed country and the sixth largest economy in the world by GDP. It is also the first industrialized country in the world. The UK economy relies heavily on tertiary industry and sectors like finances, healthcare, education and tourism plays a huge role in the economic output of the country. Primary and secondary had fallen significantly in the past few decades as many mineral resources ran out and manufacturing are replaced by smaller industrial units or outsourced to other countries. Based on 2009 UN data, the country’s HDI is 0.947 and graded as 21st most developed country in the world.

Employment Opportunities: It refers to the availability of jobs in a country. More employment opportunities mean more jobs and this led to more employment, which therefore increase income per capita. Once people had more income, they had more purchasing power to buy more goods. Therefore, increase in demand for goods and service which lead to more jobs. So, this cycle goes around and the economy would expand.

Education: Education is continuous process of learning and gaining knowledge and skills. It is the fundamental for a country to provide basic education for the people in order to advance its development and growth. People having better skills and knowledge are able to provide better services and produce high value added goods for the country, leading to better work productivity and increases in economic growth. We can measure the level of education in the country by the Literacy rate. It is the percentage of adult in a country who can read or write. Higher education equipped people with skill to efficiently use technology such as computer and machines for working purposes. Higher level of education also breeds intellectual and technocrats that provides innovation and physical solution to alleviate the challenges of development in the country. Engineers and scientist usually formed part of this group. Furthermore, it benefits the quality of life of the people as education exposed people to fine arts and literature. Another very important point about education is that, it helps people to break out of the poverty cycle. Better education allow better opportunities for better and higher income jobs.

Health: Health refers to the general well being of a person with regard to his or her mental and physical conditions. The health condition of the people depends on the accessibility and availability of medical and healthcare to the people. Standard of living of the people will improved when the country are able to keep the population physically healthy and strong. So, what indicates the level of health in the country?

Life expectancy and infant mortality rate are measures that indicate how well the healthcare is in the country. Everyone here should know that Life expectancy is the based on the average number of years that person are expected to live and Infant mortality rate is the number of infant deaths (one year of age or younger) per 1000 live births. Short life expectancy and high infant mortality rate tell us that the country had poor healthcare, sanitation and lack of clean water.

Better medical amenities, accessibility to medical services, sanitation and water treatment resulted in an increased life expectancy and infant mortality rate. Sanitation allows people to dispose waste more hygienically, resulting in reduction of contamination and diseases. Sufficient clean water supply such as piped water and water treatment facilities are vital to the well being of the people in the country.

Another factor that defined the average level of health of the person in the country is the healthcare system itself. How government distributed healthcare to the people depending what kind of means or mechanism, this basically defined the whole healthcare system of the country. There are many mechanisms to distribute healthcare but most of them are target on affordability of medical healthcare, sustainability of spending, amount of coverage and quality of medical service.

The Another Factor(Human Rights): Basically, I had gone through three factors affecting development that are taken into account for calculating Human Development Index. However, development does not stop there. When people get better educated, their level for satisfaction increased and had greater awareness of their right and freedom in the country. So we can consider in Human right as a factor of development. Accessibility to political and civil right such as voting rights, fair trial, due process, human rights and rule of law, creates an environment for people to settle difference and expressed their dissatisfactory in a non-violence manner. This creates a platform for promoting equality and peace in the society as it allows voice of minorities and dissidents to be heard. Democratic system brings ideas of people to political debates, providing changes to resolve their dissatisfaction. The resultant is an increased in level of satisfactory and improvement in quality of life as their rights and movement are not suppressed or taken away when voicing their out ideas.

Coming to the end of my lecture, I shall warn about development that moves along with no regards to the environment or sustainability, which will lead to stagnation in the growth of a country. Why is it so? Nowadays, environmental disasters are caused by the contamination and pollution due to the effect of economic growth. In RL, we see the oil spill destroying the livelihood of the coastal people in the gulf of Mexico, the reckless damming of river that displaces million of people and destroy the environment, the problem of excessive resource extraction around the world, melting of ice cap that threaten to raise sea level and cut off river source that fed billion of people and many more. Countries need to be more aware of their environment and resources around them. Any form of growth that develop the country but destroy the environment around them will be self-defeating. Hopefully in another lecture, I can talk about the sustainable growth. Thank you!