Obstacles To Development Faced By Most Ldcs Economics Essay

It is reported that “In the nearly 200 members of the United Nations, except that the members of OECD are the industrialized developed countries, the rest of them are developing countries with unequal levels of development.” (Zhiping, 78) We can see from these words, in the international community, developing countries have a huge family. And members in this family have different levels of development, based on their different political, economic and social circumstances. However, no matter what are the differences among the developing countries, they all have a large gap with developed countries. Specially, with the further deepening of the economic globalization and integration, the gap between high developed countries and low developing countries becomes larger and larger. According to the development economic theory, there are many obstacles to the economic growth and development of the low development countries. This paper will demonstrate what obstacles affect the development of the low developing countries from the situations both at home and abroad.

Domestically, there are various aspects, including political, economic, social and historical factors. For the political obstacles, it embraces “Government stability, political independence, and government’s economic policies.” (Linlin, 48) It is different from the developed countries, “most low developing countries have experienced a long-term instability of the domestic political, wars, and frequent changes of the government, which seriously hinder the economic growth and development.” (Linlin, 53) As we know that government play a major role in a country’s economic development, and it can provide a steady development environment for the economic growth. If a country has a less powerful or independent government, it will be the most serious obstacle to development, because the political environment of a country has a very close relationship with its economic policies. A suitable economic policy can help economic growth and promote the social and political development, or a bad policy will hinder the development and even hault the growth that has alreay begun.

As for the economic obstacles, economic growth is based on economic development. There is a “poor vicious cycle” exist in the economy of LDCs. (Chongtai, 98) The low developing countries have a low income, lower level of technologies, and then they have less capital to put into production, so they have less output and then they can get less income. This kind of vicious cycle is a serious obstacle to economic growth. Moreover, the low developing countries have a low per capita income. Even though some countries have experienced a rapidly economic development and accumulated lots of income, while they have a rather low per capita income. The reason for the low income per capita is that LDCs have low productivity and undeveloped technologies, and human capital and resources are not used adequately. Additionally, the economic and finical policies of low developing countries are not complete. On one hand, government has excessive intervention in the economy market, which leads the market lose much freedom and gradually lose the capability of self-regulation. On the other hand, government has no effective policiy and system to control the economy market, so many good capital and resources are wasted because they cannot be used reasonably.

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For the social and historical obstacles, most developing countries have experienced a long time colonial domination, which cause them spend lots of time to find the appriorite management system to develop their politics and economy. Moreover, the population growth rate is also a main problem for the economic development of low developing countries, such as China and India, each of them will account for about one fifth of the Earth’s total population. This problem will bring many problems such as the huge burden of raising children and the intense competition on the same jobs.

From the international point, some economists believe that “the major obstacle to development faced by the developing countries comes mainly from the external conditions of the developing world, especially the various international political and economic pressures provided by the wealthy industrialized countries, which damage the efforts that the developing countries make for their development,” (Weiping, 123) These obstacles include “the unequal international economic order, the deterioration of the terms of trade, and some obstacles that posed by developed countries.” (Weiping, 126) Naturally, we cannot deny that the low developing countries can also get economic benefits from existing among the high developed countries. For instance, low developing countries can learn advanced technologies from the high developed countries, and these developed countries have set good examples for LDCs to make economic policies, manage the industries and supervise the different economic systems. However, these little advantages can not prevent us to conclude that the various obstacles that the developed countries posed to developing countries cause a slowly growth of LDCs’ development. For example, the international trade is the important condition for development, and LDCs can gain benefits from the fair and free trade environmant, while the developed countries limit various kinds and quantities of trade goods of developing countries, or implement the so-called trade protection, just like the U.S. put restrictions on Chinese exports of steel, which demage the development of bilateral trade, especially for the developing countries.

In conclusion, since 1980s, more and more scientists begin to do research on the deep-seated problems and obstacles that hinder the economic growth and development of the low developing countries. Based on their analysis, they have pointed that “only good and efficient institutional arrangements are the real driving force for economic development in developing countries.” (Keqin, 67) And an efficient institutional arrangement can greatly save the transaction costs of the social economy, which has been confirmed by the historical development and economic growth experience of the western industrialized countries, and also are confirmed by the economic growth results of some developing countries, like China and India. Therefore, further completing and improving the economic system and institution is the most effective way for LDCs to overcome the obstacles and realize the development. However, the low developing countries should develop their economy on the premise of protecting the ecological environment and achieve the sustainable development, or it bring a large loss for their countries.

Work Cited

Zhiping, F. (2003). “The Main Factors Affect the Development.”Economic Development. P 78. 2003. Xi’an Economic Development Press.

Linlin, A. (2000). “Economic Growth and Development Analysis of Developing Countries.” The New Development of Economic Development. P48-53, 2000. Wuhan University Press.

Chongtai, T. (1989) “The Main Obstacles Faced by the Developing Countries.” Developmental Economics. P98. 1989. Shanghai the Public Press.

Weiping, H. (1998). “How to Realize the Economic Growth and Development of Developing Countries.” Economic Development. P123-126. 1998. China Republic University Press.

Keqin, L. (2003). “The Environmental Analysis of the Sustainable Development.” Theoretical Frontiers. P 67, the 5th edition, 2003. Zhengzhou University Press.