Economic Growth and Development Essay examples

2921 Words Nov 26th, 2009 12 Pages
{draw:frame} Introduction The world has been divided into developing, under-developed and developed countries. And the race has been always to move from under-developed to developed counties. But the confusion lies herein in this process of movement from the under-developed/developing countries to developed countries. When should a country consider itself to be moving in the right direction i.e. towards its goal of being a developed country? Surveys are made and reports being churned out that state the economic growth of a nation. Does the rate of this economic growth a true indicator in this regard? If that is true why is it then that even in the 21st century decades after the industrialization and years after globalization the …show more content…
Natural resources: Natural resources refer to resources that are naturally available to mankind like arable land, oil and gas, forests, water and mineral resources. Some high income countries like Norway and Canada has grown primarily on the basis of their large output in agriculture, fisheries and forestry. However in today’s modern world natural resources is not mandatory, though important, for economic growth. Countries like Japan had virtually no natural resources but thrived by concentrating on sectors that depend more on capital and labour than indigenous resources, while New York City prospers mainly on its high-density service industries. Capital formation: Accumulating capital is a vital factor of economic growth because it requires a sacrifice of current consumption over a period of time. Countries that grow rapidly tend to invest more in new capital goods and infact 10 to 20% of output may go into net capital formation. By capital formation we not only mean factories and computers. There are investments undertaken by the government that lay the framework for a thriving private sector which are called ‘social overhead capital’, and consist of large-scale projects that precede trade and commerce. Roads, irrigation and water projects, and public health measures are such important examples. All these involve large investments that tend to be indivisible and sometimes have

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