The problem of development adds a new dimension to the economic problem. Assess the validity of this statement using examples from developing nations. Your answer should include reference to at least two developing nations. Economics is said to be the study of how man uses limited resources to fulfill his unlimited wants. By this definition the only way we measure success in this area is only by production of goods but the economic development theory adds a new dimension to this definition. Bench marks like standard of living, health and education are added to measuring how developed a country is. As most developing nations grow in production and wealth, there also comes the issue of also growing in these three areas. These problems that development has brought with it are part of a common theme in developing nations. These problems are: 1. The Resource curse: When development occurs especially when it is due to the advancement of a resource that is in high demand, there tends to be an over focus on that resource causing a neglect of other resources that could create further development. This for example is the case of Nigeria where the production of crude oil is the main focus by the government. Nigeria is the 12th largest oil producer in the world and the largest in Africa and with the prices of crude oil remaining relatively high there has been an over-dependence on the resource by the countries government as the petroleum industry is the largest industry and the main GDP generator (U.S Energy department of energy, 2011). This is dangerous because of the volatility of crude oil prices which then cause alot of instability if prices reduce drastically. It is also a problem because only one sector of the economy that is located in one region is being developed, which gives jobs to those in one sector of the economy. Nigeria has over 10 natural resources that can be commercially explored such as : Tin, gold, natural gas, concrete; but because of the lack of investment in these sectors, there are thousands of people with expertise in this sector without jobs. There is also lost revenue that could have been gained from investment (New york Times, 2007). 2. Slums and Bustees.: The epicenter for economic development is in the urban areas. The urban area is where development starts from, where the high paying jobs usually are. This causes people from the rural areas to migrate from the rural areas to the urban, in search of greener pastures. Most of the time those doing the migrating are usually low-skilled workers of which there is a lot of supply. Those who get to the urban areas soon have to face joblessness due to the little jobs available to them and those who get these jobs also face the high living costs associated with urban areas. These two factors bring about the development of slums in these developing nations. These slums are characterized by small living spaces, unhygienic environments and high crime. This is the case when you consider the city of Nairobi. Nairobi is the most developed city in Kenya and also the capital of the country, which causes an urban bias with most of development investment invested in the city. This has caused a drastic rural to urban migration to the city, out of which Kibera was created. The largest slum in the whole of Africa. This slum is characterized by pollution and crime. This causes a reduction in standard of living and rise in diseases (Kibera UK Charity, 2007). 3. Environment degradation: Following the former case of Nigeria, the exploration of crude oil though helping development has caused pollution in its surrounding environment as well as the leaks killing the fishes in the sea, thus destroying the livelihood of the locals which has caused widespread poverty and reduction in standard of living.
CLASSICAL THEORIES OF ECONOMIC DEVELOPMENT.
It was viewed as a series of stages of economic growth that every country must pass, both developed...
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