ECONOMIC TRANSITION- DEVELOPMENT

• STANDARD OF LIVINGis mostly to do with economics mainly with how much money people have and individuals in an economy’s wealth
• QUALITY OF LIFEis determined by social and environmental factors. It can be said that it sums up all factors that affects a person’s well-being and happiness

• Development includes wealth, but it also includes other important aspects of life too
• Development occurs when there are improvements to indidvidual factors making up quality of life
• Development occurs in low-income countries when :
  • the local food supply improves due to investment in machinery and fertilisers
  • a new road or railway improves the accessibility of remote provinces 

·         GROSS DOMESTIC PRODUCT PER PERSON (PPP) = total value of goods and services produced in one year divided by the population of the country in question. The figure received is then adjusted to take into consideration the purchasing power of money in the country ( purchasing power parity/PPP)

-          it is expressed in US$, as to allow countries to compare figures

-          it is an economic measure of development and thus more related to standard of living

-          CRITISISM: it does not take into account goods and services produced by peasant farmers and people in the informal economy thus it is seen that it tends to underestimate the production of poorer countries, making them look poorer than they may be in reality.

·         HUMAN DEVELOPMENT INDEX (HDI) is calculated by considering a country’s :

•  GDP per person (PPP)
•  Adult literacy and other aspects of educational provision
• Life expectancy at birth

-          It is more likely to reflect the quality of life in a country

-          It is usually difficult to calculate

-          It is given as a number between ZERO ( very low development) to ONE ( very high development)

·         Over the years there have been many attempts to classify countries according to their level of development. This has changed continuously, as a system would be introduces, then later deemed inappropriate and replaced with a different system.

·         More recently, the development continuum was introduced. This is a more detailed classification that reflects the fact that countries move from one category to another as they develop.

HICS :Developed countries whose populations enjoy high living standards

Oil rich HICS :  High GDP per person

          Wealth mainly in the hands of a few people

          High consumption

         Weak secondary and tertiary sectors

NICS :  Countries that have industrialised rapidly since 1970

          Such as, Brazil, Taiwan, Mexico

FCCS :  Former communist countries

          Found in Eastern Europe

Upper MICS :   GNI per person lower than in HICS

          Industrialisation is not proceeding as rapidly as in NICs

Lower MICS :  GNI per person higher than in LICS

          Slower industrialisation leading to economic development

          Poor people living in countryside

LICS:   Poorest countries

          Low living standards

         Low life expectancy

        High level of subsistence farming