Economic growth: an increase in the real output of an economy over time (less multidimensional)

Economic development: qualitative measure of the county’s standard of living (more multidimensional)

• involves reducing widespread poverty and reducing income inequalities and decreasing employment opportunities

Sources of economic growth in less developed countries:

• Increases in human capital (improvements in training and education)

• Increases in physical capital ( improvements in machinery will benefit productivity)

• New technologies (can induce economic growth as efficiency in manufacturing increases)

• Institutional change (encouragement of entrepreneurship)

• In the long term, economic growth is usually necessary for economic development

  • an increase in the quality of life tends to require an increase in real incomes

Sustainable development: economic development that is conducted with depletion of natural resources

• Relationship between sustainability and poverty: poor people in LEDC’s have to rely more on the environment than rich countries/people

  • Environment may be their source of food, fuel, sanitation, and waste disposal. However, the use of the environment results in further environmental problems

Characteristics of LEDC’s: (Less economically developed countries)

• Low levels of GDP per capita

• High levels of poverty

• Relatively large agriculture sector

• Large urban informal sector

• High birth rate

Formulas:

• Child dependency ratio: % of population under 15 / % of population 15 to 64

• Old age dependency ratio: % of population over 64 / % of population 15 to 64

Millennium Development Goals

• These are the world's targets for addressing poverty and improving the global standards of living. These goals are to...

  • Eradicate extreme hunger and poverty

  • Achieve universal primary education

  • Promote gender equality and empower women

  • Reduce child mortality

  • Improve maternal health

  • Combat HIV/AIDs, malaria and other diseases

  • Ensure environmental sustainability

  • Global partnership for development

The role of Aid:

• Programme aid: funding provided for specific programmes which is dependent on the recipient adhering to specific conditions.

• Project aid: aid which is given for a specific purpose, including support for schools and hospitals.

• Humanitarian aid: food aid, medical relief and emergency relief aid which is often provided by nongovernmental organisations (NGOs)

• Official development assistance: aid which is granted to economically less developed countries by governments is called.

• Foreign aid: money, food or resources given or lent by one country to another.