Economic Development Essay
Economic development is the increase in the standard of living of a population. Economic development includes economic growth among the main criteria. Economic growth is a sustained growth from a simple economy to a modern one. The study of economic development includes theories of the causes, the process, and the policies by which a nation improves the economic, political, and social well-being of its people. Economic development theories relate to the causes of industrial-economic modernization, the phases of economic development, and the organizational related aspects of enterprise development; it requires sociological, economic, and cultural researches on the evolution of markets and industrial organizations within modern societies. From other perspectives, economic development of embrace improvements in a variety of indicators such as literacy rates, life expectancy, poverty rates, health, and education. In fact, these indicators are more related to economic growth so that development goes often with growth.
Scientists often argue that poor countries and mainly “third-world countries” have experienced very fast economic growth with barely little economic development and especially during the periods where they served as resource providers for industrialized countries. Other economists claim that economic growth causes or contributes to economic development, because according to this perspective, because at least some of the increasing income is spend on human sustainable development such as education and health; this is actually the most reasonable approach regarding this link that joins growth to development.
As economic development relates directly to human development, we can understand this relationship with so many different explanations. For instance, an increase in disposable incomes often leads to improvement in health and nutrition among others. Other people may define economic improvement of social outcomes related to different so called basic necessities such as clean water supply, education, social safety and so on. The main point here is that, regardless of the approach used to connect economic development to human development, the outcome is always the same: economic development aims to improve the well-being of citizens based on different scales of priorities depending on the level of economic enhancement of societies; enhanced economies go over the basic necessities to provide a higher quality of life.
Technically, we mean by economic development the increase in per capita income or the increase in national gross product (GNP); it deals with macroeconomic causes of long term economic growth, and microeconomic issues such as the incentives of households and firms. This involves mathematical methods like differential equations and optimization. Scientists define three building blocks of most economic development models: the production function to explain the relationship between development and the level of output, the saving function to relate development to investments, and the labor supply function to join development to private incomes.
In addition to the different mathematical methods used to calculate economic development, the HDI (human development index) is another widely used process to calculate development. This does not mean that the HDI replaces the other methods, but rather adds many other aspects for a considerable understanding of economic development. The HDI measures education and health besides GNP, and so is multi-dimensional. Another advantage of HDI is that it focuses on the ultimate objective of economic development and not only the means used to reach it. By far, it is the widely used approach for measuring economic development because it is more meaningful than the GNP or any other methods for there are much greater immoderations in income distribution in the distribution of life expectancy and literacy.
Politically, economic development is a rigorous struggle on the part of responsible governing body in a country. Every political agenda of political bodies includes economic and human development. Sustained economic growth provides opportunities and sufficient incomes for the labor force on the one hand, and profitable business prospects for employers. Private sector investment plays the most significant role for providing those opportunities and support economic growth; it can be the only machine for economic enhancement with other initiatives to boost investments so that to make people feel they are the most needed. So this takes part of the action plan of every representative body.
In Morocco, the economy tends to be more and more of a private aspect, and it started in 1993. This development made the government less involved in a lot of sectors that privatization integrated. However, it is still a normal economy directed by the demand and supply. Due to its GDP, Morocco is now the fifth economy in Africa and is competing with Tunisia about the first place in North Africa. During the early period, Morocco did not know plenty of important events. The agriculture sector was the first and most important one that the Moroccan economy was hoping to develop. Moreover, some importance was given to the tourist sector. This was the period between the 1969 which explains different mistakes that made Moroccan development go a little bit slower. In the 1900’s, a new strategy took place by imposing some new policies and the government trying to make it diverse in terms of the economy. The economic growth stabilized the Moroccan economy and made the 21st century the best period of all. The only sector to survive and keep having a success was the agriculture and that had a great impact on the economic development. Some of the issues that Morocco used to work on and that affected its development were the economic growth; the high rate of unemployment was strongly related to the fact of having a low economic growth. Some other sectors kept integrating the Moroccan economy for a better development such as telecommunication and gas exploration. With all this development in the beginning of the 21st century poverty was still there.
The most recent developments in the Moroccan economy appeared to some of the best since it is one of the countries that best dealt with the general economic crisis. Morocco is no more focusing on the secondary problems but more on social problems such as the lack of drinkable water, poverty, and making more important investments to link rural cities to markets. In 2008, Morocco’s economy was expected to grow by 6.5%. part of the secret under the development of Moroccan economy is better off because of the diversification that did not concentrate on agriculture this time, in addition to the industrialization and tourism sectors that were recent but helpful. In 2009, the expectation of the growth was 5.7% which is pretty much the same as the expansion of the economy. And to give some number, Morocco’s economy has a rank of 21 over the world. It is also known that Morocco has a Human Development Index of 0.567 that is considered medium. And this HDI is in fact a ranking tool used among countries so that they know about life expectancy, education and GNI of each individual. So basically, it’s like a kind of income or standard of living.
Some solutions for a higher economic development would vary in Morocco because of the diversification in the sectors that becomes a frequent fact. And some of them would be the government intervening by creating some expansion of the economy and this by imposing new rules to respect. The government would have to be responsible of all big industries and no privatization would be effective in this case.
Finally, modernization of the economy was an important thing to do by Morocco to have a better preparation to a better development. Morocco invested $ 1.3 billion planning a 5 years project. The growth rate was supposed to reach 6.2% due to this amount invested; however, in 1964, the rate was only 3% and not sufficient for a good economic development. The second plan included the development of two important sectors that are agricultural and modernization sector. At the end of 1972, both agriculture and irrigation had to increase. The 1978–80 plans was one of stabilization and retrenchment, designed to improve Morocco's balance-off payments position, but the 4% annual growth rate achieved was disappointing.
Essay on Economic Growth and Development
894 Words4 Pages
Economic growth is a necessary but not sufficient condition of economic development.
There is no single definition that encompasses all the aspects of economic development. The most comprehensive definition perhaps of economic development is the one given by Todaro:
‘Development is not purely an economic phenomenon but rather a multi – dimensional process involving reorganization and re orientation of the entire economic and social system.
Development is a process of improving the quality of all human lives with three equally important aspects. These are:
1. Raising peoples’ living levels, i.e. incomes and consumption, levels of food, medical services, education through relevant growth processes.
2. Creating…show more content…
Amartya Sen defines economic development in terms of personal freedom, freedom to choose from a range of options. While economic growth may lead to an increase in the purchasing power of people, if the country has a repressed economy, there is lack of choice and hence personal freedom in restricted. Hence once again growth has taken place without any development.
While economic growth may result in an improvement in the standard of living of a relatively small proportion of the population whilst the majority of the population remains poor. It is how the economic growth is distributed amongst the population that determines the level of development. Taking into consideration the trickle-down theory of economics by
Lewis, if the growth in economy is not sufficient to satisfy the needs and wants of the upper sections, nothing or very little shall trickle down to the lower sections in the hierarchy of society. Thus, the gap between the rich and poor widens and though economic growth has impacted a certain section of society, this cannot be considered development. Another example is an increase in the defence output of a nation, which accounts for an increased GDP but does not in any way contribute to economic development.
Economic growth is not enough in itself to measure economic development as even if there has been a leap in the income of people in a particular nation,