Developing Countries: Obstacles to Development - Video Tutorials & Practice Problems

Developing Countries: Obstacles to Development

now let's discuss why these developing countries tend to have difficulty growing economically. So they have obstacles to their development mainly uh these that we have listed here so we have availability of natural resources. So many D. V. C. S. Developing countries they lack natural resources necessary for production and growth. They might be you know countries with a lot of desert land or just not land that just doesn't have much to offer. And in some cases when they do have natural resources well they're owned by multinational corporations from the industrially advanced countries. So even if they do have natural resources they might not even own them because they're owned by outside countries. So that's an obstacle for their development. Next is human resources that are not properly utilized. First that they have large populations. They have high unemployment and low human capital right Because education is not as available in developing countries and what what tends to happen as well is when they have when they do have trained and motivated workers. Well they tend to leave the developing country to go to an industrial advanced country uh to find better opportunities in those in those countries. So their human resources just aren't aren't doing their best. They're either next is capital goods. So the availability of capital goods, capital goods being things like factories and equipment and basically more capital goods is more production. Right? More production more productivity. That's the whole idea right there. If there's more capital per worker available well then they they're able to be more productive on the job. Right? Think about a person sewing a t shirt by hand or a person running a machine that shows 100 t shirts an hour, right? Uh, in that case the more capital that's available leads to more productivity. So when there's low, low capital available, well, it leads to local, low productivity. So what ends up happening is that the investment in capital proves to be difficult because those that would invest in the capital, maybe those who have more money to invest in these developing countries, let's say the rich citizens, well, they might just tend to invest in industrially advanced countries as well because it's a safer investment. There's less risk to invest in in an I A. C. Rather than a developing country. Next is technology, technological advancement. And this has to do with the same thing with with capital. When there's more technology, right? More technology, more tech. Let me space that out. More tech is more productivity as well, Right? If you have more technology available. However, a lot of times in these developing countries, they don't have the technology available. And when they do want to apply a new technology, it requires investment. So, it's the same problem that there is with capital, it requires investment in infrastructure and in new capital goods as well. To apply these new technologies. Another problem is sociocultural factors. So in some of these developing countries, they have tribal allegiances where they have, um, basically tribes set up throughout the country, rather than national allegiance. So the tribes aren't so concerned with the economy of the nation as a whole, they just want to make sure that their tribe is okay, right? They have this tribal allegiance and this happens mainly in africa. Also, religious beliefs can get in the way right. They can limit the length of a work day, or they can just take up time in the day where maybe you have to do some sort of ceremony, you have to go pray throughout the day and it takes away from the productivity and as well as using resources. So, in a very religious country, well, instead of using resources for productivity and growth economically, they're using those resources for the religion. Um and and growing the religion. And finally, the last one here is institutional factors. So this is things that problems with the government. So a lot of these developing countries have corruption in the government, where the government is basically just funneling funds to their to their own private accounts, uh taking bribes, things like that. The public schools tend to be inadequately staffed, leading to low human capital when there's not good schools and tax systems can just not be good. They can be unjust. They can be arbitrary and they're not collecting taxes in an efficient manner. Ok, So these are all problems that occur in developing countries, each one has their own specific unique set of problems um that that that basically gets in the way of their economic growth. Alright, so let's pause here and let's move on to the next video.