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Developed Versus Developing Countires

Updated on June 24, 2012

The total population of the world in 2007 will reach over 6.2 billion people. About there fourths of the world's population is living in developing countries and the remaining one fourth in the developed world, There is a marked difference in the standard of living of the people living in advanced industrial countries and those living in developing countries. The main indicators which differentiate the countries from the developing countries are in brief as under:

(1) GNP per Capita

One of the crude index of measuring the level of national well being of the people across the world is GNP per capita. In the advanced countries of the world, the GNP per capita far exceeds that of low and middle income economies. The income inequalities between the developed and under developed countries are not only large but the gap between them is increasing as the years pass. According to the World Development Report 2006, the GNP per capita of USA is as high as $41400, Germany $30120, France $30090 whereas it is around $510 of low income countries. GNP per capita of selected developed and underdeveloped countries is given below:

GNP per Capita in USA dollars

GNP per capita

Low and middle
income countries

GNP per capita
in 2003
USA 41400 Bangladesh 440Germany 30120 Pakistan 600France 30090 India 620





(2) Consumption of Word's Output

The developed nations account for about one quarter of the world population but they are estimated to consume about three quarters of the world's output. The developing countries with three fourths of population thus consume one fourth of world income. The result is that people living in developing countries have limited income. Their per capita income is near to the subsistence level.

(3) Unutilized and underutilized resources

In developing countries most of resources of the country remain unutilized or underutilized due to limited savings, unproductive uses of funds, inappropriate investment decisions, shortage of skilled workers, availability of low development technology etc. Whereas the advanced nations make full use of the resources available to them. The advanced countries have substantial resources, efficient and productive technology to make the best use of resources for production.

(4) Vicious Circle of Poverty

The developing countries are finding difficult to come out of the vicious circle of poverty due to limited savings, low level of investment. The advanced countries of the world are making full use of human and physical for the development and progress of their countries.

(5) Population

Birth rates and death rates are strikingly different between developing countries and advanced industrial countries. Birth rates in LDC's are generally at very high level on the order of 30 to 40 per thousand; whereas in developed countries it ranges from 6 to 12 per thousand. The crude death rate in developing countries is estimated at 10 to 20 per thousand; whereas in developed nations it ranges from 4 to 8 per thousand.

(6) Life expectancy

The life expectancy in low income countries is about 60 years (Pakistan 64 years) industrial advanced countries, the life expectancy is around 77 years.

(7) Secondary school enrollment

The secondary school enrollment in developing countries is about 40% of the population. In developed countries it is about 95% of the population (Pakistan 46%)

(8) Percentage of population in urban areas

The percentage of population in urban areas in LDC's is about 27% whereas in advanced countries it is about 80% (Pakistan 50%)

(9) Population below the poverty line

The population below the poverty line varies from country to country. In Pakistan, 28.5% of the people live below the 'poverty line. In India 28.6% of the people fall below the poverty line. In USA., UK,. South Africa, Saudi Arabia, Italy, Ireland, France, Austria, the persons falling below the poverty line are Nil.

(10) Voiceless ness and powerlessness of the people

In developing countries, there is lack of voice, power and independence of the people. Their voiceless ness subject themselves to rudeness, in human treatment and exploitation at the hands of the institutions of the state and society. In advanced countries of the world, people are not maltreated at the hands of institutions. They have full liberty to raise their voice against any unjust any injustice. The people, therefore, work with standards and reaching new heights.

(11) Debts.

During the last two decades, the developing countries are heavily burdened with international loans and also domestic loans. It is feared that many debtor nations may default on their outstanding loans. The advanced countries have nations must recognise the helplessness of the poor nations to repay the debts. These debts should be written off or reduced to soft loans for attacking poverty of the people living in LDC's.

(12) Social overhead capital.

The developing countries are often burdened with inadequate social overhead capital, ranging from poor public health, and sanitation facilities to inadequate roads, the telephone, air service etc. As there social overhead are expensive to provide, therefore, the developing countries are not able to provide on large scale. The industrial advanced countries, having huge resources at their disposal have spread a net work of social overhead in their own countries for accelerating the rate of economic development and raising the living standard of their citizens.

(13) Inequality in incomes

As the years pass, the income gap between the developed and developing countries is widening. The developed countries should, therefore, open market opportunities to poor nations to build up their assets and break the vicious circle of poverty for coming closer to the advanced nations.

(14) Market economies

The industrially advanced countries have developed market economies based on large stock of capital goods, advanced production technology and well skilled lab our force and well knit market. Whereas the developing countries suffer marketing deficiency like that of infrastructure deficiencies, weak bargaining position of the producers etc. The unskilled labour force. low production technology force productivity to low level .

(15) Information technology .

There is a rapid advancement in information technology in advanced countries of the world. The revolution in information technology in all the sectors of the economy has brought potential benefits to them. It has helped them in expanding goods and services at the national and international level, decreasing the cost of production, reducing inventories, reduced transportation costs, expediting access to information etc . The developing countries are far behind them in learning and adoption of information technology for rapid growth of the country. Accounting for management


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      otude victor. 5 years ago

      Men! This is really a good article. And if this is really a conventional yardstick, it therefore means that Nigeria still have a very long way to go. But, the western Europe remain inescapable for the underdevelopment of Africa and the rest of the third world nations.

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      FINANCIAL ACCOUNTING 7 years ago

      Good article on Developed Versus Developing Countires