Indicators of Economic Development

Indicators of economic development

1. Per capita income

   Per capita income of a country is the average income of the people of a given country in a particular year. It is calculated by dividing the total annual income of the country by the population of that country. The total annual income of a country is also referred to as the Gross National Product (GNP) or the Gross Domestic Product (GDP). It is always given in monetary terms.

2. Birth rates

   Birth rate is the ratio of total live births to total population in a specified community or area over a specified period. The birth rate is often expressed as the number of live births per thousand of the population per year.

3. Population growth

   This is an increase of population. In developing countries, the population growth is higher compared to the developed countries. Over the last 50 years, world population has grown very rapidly compared to any previous time. The reason for population growth in developing countries is the high birth rate. Birth rates remain high even though death rates have fallen.

4. Life expectancy

   This is the average number of years newborn babies can be expected to live if health conditions stay the same. Life expectancy is lower in developing countries compared to in developed countries. In developed countries, the deaths of children under the age of five accounts for 1.3% of all deaths, while in developing countries the figure is 10.5%.

5. Literacy rates

   Literacy is the ability to read and write. Literacy has strong connections with education, openness to change and labor productivity. Literacy is an objective of development.

6. Energy consumption

   The consumption of energy in a country is highly correlated to the degree of industrialization. The poorest countries use very little energy, while the richest industrial countries use a lot of energy. The most common energy used by poor nations like Tanzania is firewood. Industrialized countries use gas, solar energy, and hydroelectric power.

7. Rural–urban migration

   People in developing countries tend to migrate from rural to urban areas. Cities in these countries grow rapidly. The purpose of migration is to get employment. Most of these migrants remain unemployed and are subjected to poverty.

8. Unemployment

   This is a situation whereby able and mentally fit people in a country are jobless and/or do not have formal jobs. There is a high rate of unemployment in developing countries and it is a serious matter in our societies, particularly among the youth in urban areas. The high level of unemployment may result in civil unrest, fall of standards of living, and increased crime like drug abuse, robbery, prostitution, theft and loitering. The other effects are child labor to subsidize family income, separation of families and increased number of street children.

9. Poverty

   Poverty refers to the state of being poor. Poor people are those who fail to enjoy better living conditions in the society they live in; they are unable to meet the basic needs of life, which are food, clothes and shelter. Poverty is the most distinguishing feature between developing countries and developed ones. This type of poverty has been eradicated in developed countries. Poverty is a hindrance to economic development.