Economic development means economic growth, plus changes. So, for economic development to occur there must be not only an increase in the GDP, but also change.
Economic growth is the increased ability of countries' economy to satisfy the needs and wants of its population overtime.
Explain the curve (PPC is Economy's current, PPC¹ is when it experiences growth)
However this is only one part of Economic Development. Change + Growth is equal to development, and there can be many different changes, that could include for example, change in the status of women, or the industrial sector (It's usual for an LDC to have 60-70% of its population working in low paying agricultureâ Changes could mean, more of an LDC's population to be involved in Secondary or tertiary industries. For example, 6% of Australia's population is involved in Primary industry.
- Development of a more sophisticated financial sector.
- Dynamic economyâ Where when conditions change, the economy is likely to grow and change.
- Changes in the distribution of income (Equality VS Efficiency) â Brazil (Debating going on if Brazil actually grew, because the poor only got worse off)
Evidence suggests that there is a substantial economic imbalance between the LDC's, Mozambique, Brazil, Nigeria, and the DC's, Switzerland, USA, Japan. This becomes clearer as we look at some of the economic indicators. - DC's have much higher living standards then the LDC's do. Eg/ Comparing the streets Frankfurt to the slums of Sau Paolo.
DC's generally have a much higher GDP/Capita than LDC's. eg/ Switzerland's GDP/Capita is 425 times more then the GDP of Mozambique (34000-80). This is one of the best indicators of imbalance.
The make up of the economy of an LDC's will typically rely on two industries to support their economy. For example, Fiji relying on Tourism and Sugarcane, while developed economies develop more manufacturing goods, away from agriculture.
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