10 Characteristics of Developing Countries

We explain what developing countries are and what their economy is like. We also explain their characteristics and obstacles.

What are developing countries?

The term “Developing countries” It refers to economic development of a countryalthough it can affect all aspects of it (political, social, etc.).

The economy of these countries is in a state of transitionbetween underdevelopment and fully developed economies. The criteria used to determine that a country is developing, and thus distinguish it from an underdeveloped country, are:

• The human development index. It must exceed 0.800. This index is determined based on data on per capita income, life expectancy and education.
• Rent per capita. It must be greater than $8,000.
• Economic deployment. A growing economy can determine that a country is developing, even if the other two criteria do not meet the requirements.

See also: Emerging country.

Characteristics of developing countries:

1. Social change

It is common in these countries due to the migration of populations from rural to urban areas.

2. Infrastructure

For development to be possible and for a country to be able to distinguish itself from an underdeveloped country, a certain infrastructure must exist. That infrastructure It must be physical (means of transport and communication, available technology) as institutional (legislative framework). However, technological development may depend on other countries.

3. Internal economy

One of the requirements for a country to enter the development path is that there are savings and a significant investmentHowever, this feature is not enough.

In this countries There is often a high rate of unemploymentIn countries with high levels of per capita income, low employment or precarious employment in a sector of the population results in large differences in the quality of life between inhabitants. This allows for very cheap labour.

4. External economy

Developing countries are often in a situation of dependency within the framework of the international division of labour. The consequence is that Trade exchanges are subject to the rules of richer countries.

Due, A significant portion of their resources are often used to pay interest on debtsThis is because the reforms imposed to maintain funding are not adequate to promote sustained growth of the local economy.

Business relationships are usually of Export of raw materials and import of industrial productsThe less dependence on foreign industries, the higher the level of development of the country.

5. Financial market

In developing countries that maintain inefficient policies, their subsequent development is seriously compromised. In such cases, Financial markets are underdeveloped and there are fixed monetary exchange rates, public deficit financing that generates inflation, and widespread indexation of both wages and prices.

6. Policy

Politics It is usually unstabledue to its economic dependence on central countries. Internal struggles between different ideologies can prevent a stable and lasting project.

On the other hand, if this trend is interrupted and the political situation stabilizes, steps can be taken decisive measures that benefit or harm economic developmentThat is to say, economics and politics affect each other mutually, and their interaction is vital for the development of the country.

7. Poverty

Poverty is always a central problem in developing countriessince even when development is underway, economic benefits are not distributed equitably throughout society.

This means that a significant sector of society continues to live in conditions similar to those of an underdeveloped country. These sectors They may suffer from hunger, social exclusionlimitations in access to health services and education.

8. Migration

In this countries There are migratory phenomena in both directions. Due to the limited opportunities for growth for some sectors of the population, it is common for people suffering from poverty to move both within the country’s borders and to neighbouring countries in search of better opportunities.

Besides, The most benefited sectors also migratealthough to a much lesser extent, seeking better educational or professional opportunities, since the benefits that local development has brought them allow them to pay for these trips. If these migrants subsequently return to their country of origin, the learning they have gained in turn contributes to national development.

On the other hand, if a country advances in its development and is located in a region of underdeveloped countries, There will be immigration from those poorer countriesseeking opportunities that, however scarce, improve the conditions that the country of origin could offer.

9. Heritage

The drive for development and the real economic needs suffered by a significant part of the population can lead to these countries benefit from investments and infrastructure creation even if the consequence is the destruction of historical heritage (for example, the demolition of historical buildings to make way for new, more efficient buildings) or of environmental heritage (for example, the introduction of mining industries without proper environmental care supervision).

10. Obstacles

Within the world order, there are certain obstacles for individual countries to be successful in their economic development:

• Demography. Due to the unprecedented increase in the global population, investments are quickly absorbed and capital accumulation is difficult.
• Technology. Industrial growth depends on technological growth, a factor that requires specific learning, which makes growth difficult.
• Transport. Transport costs are so low that, without protections limiting imports, domestic markets can be invaded by manufactured products from already developed countries, preventing the development of local industries.

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