The Least Developed Countries

(LDCs)
Note: Cape Verde was removed from the list in 2007 so is no longer a LDC (therefore there are 49)
 LDCs

Since 1968 the world's poorest countries have
been classed as least developed countries.

UN calls them 'the poorest and most
economically week of the developing countries
with formidable economic, institutional and
human resource problems, which are oftern
compounded by geographical handicaps and
natural and man-made disasters'.

This list contains 49 countries:

33 in Africa (all sub-saharan)

Others in southeast Asia and a number of small
island states in the Pacific.
 Features of LDCs:

Low incomes, measured as less than $800
GDP per capita per year averaged over a 3-
year period.

Human resource weaknesses: based upon
indicators of nutrition, health, education levels
and literacy.

Economic vulnerability: share of manufacturing
in the GDP, per capita energy consumption,
and population displaced by natural disasters.
 Other Problems in LDCs:

Ongoing and widespread conflict – e.g. Darfur
in Sudan.

Extensive political corruption.

Lack of political and social stability.

A form of government that is authoritarian in
nature, such as a dictatorship.
 Quality of Life

People live in poverty in all LDCs.

A large majority of the population has an
income too small to meet their basic needs.

In 2005 it was estimated that 277 million people
were living on less than $1 per day.

In some cases incidence of poverty has been
falling but the actual number has been
increasing over the long term.

Still dependent on external finance.

In 2006 net aid payments reached $28 billion.
 Debt

From the 1970s countries developing countries
found themselves in a dbet crises.

The problem can be attributed to:

Increasing oil prices.

Higher interest rates.

Falling export prices.

Problems of domestic economic management.

No hopes of the debts being repaid and heavy
interest accumulating.

By October 2007 17 LDCs were recing debt
relief under the HIPC initaitive (Heavily Indebted
Poor Countries).
A possible path for development???

Rostow's Model
 The Rostow Model

One of the first and most simple models to
account for economic growth.

Put forward by W.W. Rostow in 1960.

Based on a study of 15 countries, mainly in
Europe.

He suggested all countries had the potential to
break the cycle of poverty and develop through
the five linear steps.
 5. High mass
consumption
Level of Development

4. The drive to
The maturity

3. Take-Off

2. Preconditions
for take-off

1. The
Traditional
Society
Time
 Stage 1: Traditional Society

Subsitence economy based mainly on farming.

Very limited technology or capital to process
raw material.

No development of industries and services.
Stage 2: Preconditons for take-off

Often needs external injection of cash to move
into this stage.

Extractive industries develop.

Agriculture is more commecialised and
becomes mechanised.

There are some technological improvements
and a growth of infrastructure.

Development of a transport system encourages
trade.

A single industry begins to dominate.
 Stage 3: Take-Off

Manufacturing industries gwo rapidly.

Airports, roads and railways are built.

Political and social adjustments are necessary
to adapt to the new ways of life.

Growth is limited to one or two parts of the
country (growth poles) and to one or two
industries (magnets).

Numbers in agricultures decline.
 Slide 4: The Drive to Maturity

Growth is self-sustaining.

Economic growth spreads to all parts of the
country and leads to an increas in the number
and types of industry (multiplier effect).

More complex transport systems develop and
manufacturing expands as technology
improves.

Some early industries decline.

There is rapid urbanisation.
 Stage 5: The age of high mass-
consumption

Rapid expansion of tertiary industries and
welfare facilities.

Employment in service industries grows but
declines in manufacturing.

Industry shits to the production of durable
consumer goods.
Approximate date of reaching a new
stage of development:

Stage 2 3 4 5
UK 1750 1820 1850 1940
USA 1800 1850 1920 1930
Japan 1880 1900 1930 1950
Venezuela 1920 1950 1970 -
India 1950 1980? - -
Ethiopia - - - -
 Criticisms of Rostow's Model

Rostow suggested that capital was needed to
make countries development – despite large
injections of aid countries remailn at traditonal
stage.

Countries that move towards take-off stage
have occurred huge national debts.

Historical evidence indicates this sequence is
not universal.
 ACTIVITY

Complete Rostow model 'Living Graph Activity'

 Homework

Read page 197 – 201

Answer questions page 201 (all parts in detail –
e.g. more than a page)