In today's global economy,
much of the world's production along with the global supply chain is increasingly being
offshore by the industrialized parts of the world like
America and Europe to the developing countries of Africa,
Asia and Latin America,
home to about three-fourths of the world's population.
On top of this, much of the world's resource wealth from energy and minerals to
agricultural products and timber are located in
far-flung and relatively primitive parts of the developing world.
Business executives and investors who do not have a firm grasp on the macroeconomics of
these developing countries are likely to miss out on
big opportunities with respect to elements such as the development of new markets,
the acquisition of natural resources,
new production opportunities, and leveraging the global supply chain.
That's why in this,
and our remaining modules of this lesson,
we are going to more closely focus on the less-developed or developing nations of
the world using the framework of
the four wheels upon which the engine of economic growth and productivity ride.
Remember its human resources,
natural resources, capital formation and technology.
To begin, let's explain in this module
more precisely what we mean by a developing country.
Here, some economists prefer
the term less-developed country while others do indeed say developing countries.
Regardless of which term is used,
the most important characteristic of
developing countries is that the people have low per capita incomes.
In addition, people in developing countries
usually have poor health and a short life expectancy,
suffer from malnutrition, and have low levels of literacy.
To put a human face on this,
just put yourself now in the shoes of a typical
25-year-old in a low income countries such as Madagascar, Malawi, or Uganda.
Your annual income may be a few thousand dollars.
Your life expectancy, is years below that of the average person in an advanced country.
And already two of your brothers and sisters have died before reaching adulthood.
You can barely read, and you work
very long hours in the fields without the benefit of machinery,
and with, but one-sixtieth of the horsepower of a prosperous North American worker.
At night, you sleep on a mat in a one room house along with your parents,
and grandparents, and five children.
Your house has no electricity,
indoor toilet, or fresh water supply.
You have little household furniture perhaps a table and a radio,
and your only mode of transportation is an old pair of boots.
While, despite much sickness in your village,
qualified doctors are far away tending to the needs of wealthier families.
You and your fellow citizens in the poorest countries constitute over half of
the world's population but must divide
amongst each other less than 10% of the world's income.
You're often hungry, and the food you eat is mainly roughage or rice.
You have little or no hope of ever seeing your life improve.
This is a grim life indeed.
The question of course is,
just what is going wrong here in your nation that lead you in
such poverty midst the globe featuring huge pockets of vast riches and wealth?
The answer may indeed be found in a deeper look at
the four wheels of growth and productivity we have been discussing in this lesson,
as they apply the less developed nations in the world.
So when you're ready, let's start in our next module with
both quantity and quality of the country's human resources.
