• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Business
  • Commerce
  • Management
  • Insurance
  • Banking Finance
  • Marketing & Advertising
  • Tech

Business Finance Articles

Your First Financial Choice....

  • Education
  • Career
  • Investment & Money
  • Accounting & Taxation
  • Transportation & Logistics
  • Industries

Characteristics of Developing Countries

Last Updated on November 12, 2021 By Lisa C. Townes Leave a Comment

In a country where the average income of people is much lower than that of developed countries, the economy depends upon a few crops, and where farming is conducted by primary methods is called developing country.

“A developing country is that in which per capita income is low when compared to the per capita incomes of U. S. A, Canada, Australia, and Western Europe.” According to United Nations Experts:

“The underdeveloped country is that which has low levels of living (absolute poverty, poor health, poor education, and other social services), low self-esteem (low respect, honor, dignity) and limited freedom (freedom of choice).” According to Michal P. Tadaro

“A poor agricultural country that is seeking to become more advanced economically and socially.” Wikipedia

Table of Contents

  • 22 Characteristics of Developing Countries
    • Exports of Primary Goods
    • Capital Deficiency
    • Over Dependence On Agriculture
    • Natural Resources
    • Out Flow of Best Brain
    • Market Imperfections
    • Inflation
    • Control of Govt
    • Capital Formation
    • High Degree of Illiteracy
    • Agricultural & Industrial Backwardness
    • Rapid Population Growth
    • Agriculture, Main Occupation
    • Consumption Pattern
    • Technical Backwardness
    • External Resources Dependence
    • Rare Collection
    • Inadequate Infrastructure
    • Social Aspects
    • Trade Deficit
    • Influence of Feudal Lords
    • Circle of Poverty

22 Characteristics of Developing Countries

Exports of Primary Goods

The primary and agricultural products are the main exports of these countries are International trade.

For example the main exports products maybe are rice, wheat, cotton yarn, fish and garments etc.

Capital Deficiency

The deficiency of capital in an important feature of developing countries. Therefore they are often called capital-poor economies. The shortage of capital is reflected in the very low capital-labor ratio in these countries.

Over Dependence On Agriculture

Above 50% of the population in lives villages, back-ward agriculture is the major occupation of the population. The agriculture sector is backward due to the old and traditional methods of cultivation. In-efficient farmers, tack of credit facilities, unorganized agriculture market, etc. 66.7% population is directly or indirectly dependent on the agriculture sector.

Natural Resources

Mostly there is a shortage of natural resources in developing nations and this is also a cause of their economic backwardness. In various poor countries, natural resources are available but they remain unutilized under-utilized and miss- utilized due to a capital shortage, less efficiency of labour, lack of skill and knowledge and limited home market.

Out Flow of Best Brain

The brilliant and brightest students in developing countries go to developed countries for higher education. After completing their education, they do not want to come back in their own country due to un-satisfaction with low salaries and material comforts, Therefore, they remain in search of better jobs in foreign countries.

Market Imperfections

The market imperfections are found. It is due to imperfection of markets, the productive efficiency in these countries is low and resources are miss allocated.

Inflation

High rate of inflation in poor nations causes economic backwardness. Due to high level of price, purchasing power and saving of the consumers tend to decrease.

Control of Govt

In underdeveloped countries, wealthy persons, landlords and elite class not only control the Government but also they have full control over all the major sectors of the economy. This rich class is not interested to solve the problems of the poor for their welfare but make government policies for their own improvement.

Capital Formation

In such countries, the per capita income is very low as compared to the developed countries. So their savings and investments are also low. Due to low savings and investments, the capital formation rate is also low. Per capita income of such countries is below than $24000 of developed countries,

High Degree of Illiteracy

The illiteracy rate is high in developing countries as compared to developed countries as compared to developing countries. Illiterate persons do not know the importance of economic development. These under developed countries have literacy rate is 40-70% while in advanced countries; it is near to 100%.

Agricultural & Industrial Backwardness

The Agricultural & Industrial sectors of developing countries are backward. These countries depend mostly on the Agricultural sector. The agricultural sector is contribution ranges from 15-25% of GDP. Due to low investment and improper utilization of the industrial sector is also backward.

Rapid Population Growth

A rapidly increasing population growth rate is one common feature of the developing countries, despite diversity exist in size, density and age structure. An increasing population growth rate adds to low per capita income and low rate of capital formation and there is no marked improvement in the living standards of masses.

The death rate has fallen due to advance in medical sciences but the birth rate does not yet show any significant decline.

Agriculture, Main Occupation

Most under developed countries are predominantly agricultural. A great maturity of population is engaged in agriculture and allied occupations. This excessive dependence is due to the fact that non-agricultural occupations have not grown at a rate compared with the increase in population. Hence, the growing labour force has to be absorbed in agriculture sector.

Consumption Pattern

The low level of earnings of the people is reflected in their low level of living in developing countries. The major portion of their income is spent on basic necessaries of life i.e. food, fruits, meet, eggs, milk etc. The proportion of expenditure on housing and clothing is very small and general poverty is reflected in their lives.

Technical Backwardness

Under developing countries are also in the backward state of technology which is reflected in high cost of production, high labor output, and capital-output rates, generally low productivity, unskilled and untrained workers, thus, it may be pointed out that technological backwardness is not only the cause of economic backwardness but it is also the result of it.

External Resources Dependence

The international trade, political activities and other economic activities are under the influence of other advanced countries in less developed countries. Their development plans are financed by the loans giving countries: these plans are made to serve the interests of foreign countries. So, poor nations are loans and grants receiving nations.

Rare Collection

The developing countries do not have such a huge capital or investment that they can produce a large number of basic needs of life. Rate of production is also low in developing countries. It is due to rare collection in the country.

Inadequate Infrastructure

To enhance the process of economic development, proper infrastructure is needed which is not available in poor economies. In these nations: roads, transport, telecommunication, sanitation, health, and education facilities are not at their best level. Government has reserved an amount of Rs,133 billions to develop the infrastructure.

Social Aspects

Under developed countries have also some factors such as joint family system, cast system, cultural and religious views, beliefs and values that badly affect their economic development.32.17% population is working population and remaining 60%+ population is depending on them.

Trade Deficit

Undeveloped countries usually export raw materials but import finished goods. The price of raw material is low but the price of finished goods is high. So, the balance of payment is unfavorable. These countries have more trade deficits.

Influence of Feudal Lords

In lower developed nations, the poor class is under the influence of feudal lords and tribal heads. The feudal lords want to keep the people backward and do not appreciate the development of the poor. About 50% poor borrow from landlords and 50% poor are working for feudal lords.

Circle of Poverty

The main cause of under developed countries remaining poor and under developed is that they are caught up in the vicious circle of poverty. It is because of their per capita income is low, low saving and investment, lack of capital, low purchasing power, low productivity thus the vicious circle is completed and a country remain poor because it is poor.

lisa
Lisa C. Townes

Lisa is a passionate travelers. She spends 3 months every year visiting different places worldwide. She has visited almost every famous place in the world. She herself is an affiliate blogger

Filed Under: Economy

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Primary Sidebar

Transparent Customer Transactions

In today's digital age, ensuring the security and … [Read] about 6 Tips for Secure and Transparent Customer Transactions

peson using laptoop

Are you filled with ambition to build a business … [Read] about 4 Steps Quick Beginner’s Guide to Easily Sell Products Online

How does Blender Make Money

We are out of the era where artists, video … [Read] about How does Blender Make Money?

How-Does-Digit-Make-Money

In a dynamic business environment, where … [Read] about How Does Digit Make Money?

workers doing there work

The COVID-19 pandemic has ended, changing the … [Read] about Unlocking Workplace Harmony: Balancing Control and Autonomy

technology

In an era where digital exchanges evolve rapidly, … [Read] about Harnessing WBT: The Future of Digital Exchanges

business managment

As a business owner, you should be familiar with … [Read] about Essential Tips for Effective Performance Management

Nicole-Junkermann-and-Lynn-Good

Gone are the days when people thought the business … [Read] about Nicole Junkermann and Lynn Good: The Powerful Ladies in Business Era

happy man hand holding the box

The business landscape in 2023 is vibrant and … [Read] about Dropshipping as a Side Hustle in 2023: How to Get Started

Tax documents on the table

Airbnb has revolutionized the hospitality industry … [Read] about Mastering Tricky Tax Terrain: The Importance of an Airbnb Tax Accountant in the UK

Non-Profit

In the dynamic business environment, the … [Read] about How Does a Non-Profit Make Money?

mental health a girl

Young adults frequently regard life as an exciting … [Read] about The Importance of Preventive Care for Young Adults

risk management

CFA is a widely recognized investment management … [Read] about How Hard is CFA Level 1

afterpay make money

In the modern era maintaining a high living … [Read] about How Does Afterpay Make Money?

Chime-Make-Money

Let’s admit it, dealing with essential tasks in … [Read] about How Does Chime Make Money?

Footer

  • About US
  • Contact Us
  • Blog
  • Comment Policy
  • Terms & Conditions
  • Privacy Rights
  • Privacy Policy
  • Follow Us On
  • – Google News
  • – Facebook
  • Entrepreneur Skills
  • Business Cycle
  • Business Ideas
  • App Makes Money
  • Be Wealthy
  • Psychology in HRM
  • HRM in Business
  • Businessman Qualities
  • Salespeople Types
  • Health & Business
  • Business Success Rules
  • Stress At Work
Copyright © 2018-2022 BFA