economy,growth & development :ideas from around the world that clicked name: sandesh paudyal ca...

Economy ,Growth & Development :Ideas from around the world that clickedName: Sandesh PaudyalCA Final

Hatemalo Nepali Students Group

Development Definition

• Enhancement of nations four fold capital stock• Capital of material goods• Natural capital such as soil, land, forests• Human capital including health, education• Social capital including mutual trust and social

harmony

JOSEPH STIGLITZ



Common Features of Developing Countries

General poverty and low living standard Low per capita income Over dependence on agricultureUnemploymentBackward industrial sectorLow level of productivityDualistic economyIn-appropriate use of Natural resourcesInflationUnsatisfactory Foreign Trade

Economy and Political UnstabilityPolitical Instability and Economic Stability are deeply related “The propensity of change in the executives of the government whether by

constitutional or unconstitutional means is known as Political instability”

In country’s where government is stable, the likeliness of social unrest/revolutions are low and people can focus on productive activities.

According to the Harvard Dash report instable government are more likely to be beneficial to the economic agents.

HOWEVER one thing that needs to be mentioned here is that political instability cannot itself be a scapegoat for non-development.

Ethiopian AirlinesThe rise of Bhat BhateniSuccess of Nepali Cricket Team


Examples of growth out of DebrisSouth Korean Experience

In 1950 the Korean war broke out between present North and South Korea destroying almost one third of national production facilities and most infrastructure. Since then trade policies of South Korea has taken many shifts from import substitution to globalization and there has been large impact in the economy.

All through 1950’s and 1960’s Korea stood as an under performing economy with almost 50% of its national budget funded through foreign aid and grant and its foreign policy revolved around attracting foreign aid.

Steel and cement were produced internally to shield from dependency.


South Korean experiences continues

In 1962 S. Korea embraced the policy of massive industrialization based on export. Export incentive development strategy was introduced and export of labour intensive light manufactured goods were encouraged. This was more pronounced in textile and electric machinery industries. They had comparative advantage over other countries because all the requisite manpower could be easily absorved. Imports were discouraged.

The trade grew at the rate of 40.8% during all of 1960’s

Natural and gradual shift to heavy electrical company


Reasons

• Rapid growth charecterized by increasing agriculture productivity, shift of labour to industry, steady growth of capital stock of education and skills

• At no point was agriculture neglected, land reform the fragmantation was regulated

• Some may argue with the aid but it carried out extremely active industrial upgrading policy, promoting indegenious industry to take charge,


The Vietnamese Experience

Vientnam today known as developing planned economy and market economy. Since the mid 1980’s through doi moi reform period Vietnam has made a shift from a highly centralized planned economy to a socialist oriented market economy which uses both directive and indicative planning. Currently in the process of being integrated in global economy

Vietnam war from 1954 to 1975 seriously strained the economy.

The situation was worsened by 1.5 million civilian and military deaths and subsequent exodus of 1 million including tens of thousands of professionals

Bulk of industries are SME’s

PWC forecasts the Vietnamese economy to be fastest growing economy by

2025Hatemalo Nepali Students Group

Vietnamese experience continues


• The government second five year plan 76 to 81 aimed for extraordinarily high annual growth rates in industrial and agriculture sector. But this optimistic policy was not conquered and economy remained dominated by small scale production , low labour productivity, unemployment, material and technological bottlenecks.

• But focus on liberalization, institutional transformations, structural reform,and opening to global economy did wonders. The poverty fell to 32% in 2003 from 70% in 1990.

• Not only economic growth, there has been a fundamental structural change too (% of GDP contributed by various sectors)

• Agriculture reform such that from a food importer it is now the second biggest rice exporter behind Thailand.

Vietnamese Experience Reasons:

Scientific farm allocation between individual and large scale farmers.Increase in proportion of capital and labor forceApplication of advanced biotechnology to diversify productsTrade liberalization and export promotion.Encouragement of FDIPromotion of Private EnterpriseImport SubstitutionProtection of interest of Domestic goods.


The Taiwan Experience


• Emphasis on education• Extensive infrastructure development• Early and thorough land development• Very high rate of saving and investment• Diffusion of commercial ideas from

Japan and US• Effective Government policies

Innovative Policies that worked:Bolsa Familia(Brazil)/ Progresa(Mexico) They are both the innovative social program taken by the

respective governments. Health, nutrition and education are complements in the struggle

to end poverty Mexico learned from its inefficient state run subsidy distribution

program where it learned that the benefit were taken away by urban poor rather than hard to reach rural poor

Direct cash transfer of around $55 per month In turn families commit to keep their children in school and take

them for regular health check ups Spending abilities helps to reduce short term poverty and

increase long term human capital


Change with Public Participation• The municipality of Rosario in Argentina undertakes

participatory youth budget which engages 1000 youths annually to prepare budget for youth related services.

• In Bahrain 16,000 young people engage through focus group to formulate national youth policy.

• Research by Dasgupta(1990) clearly shows the direct relationship between increase in Gross National Production and peoples participation and involvement.

• Bottom Up model of development.• Efficiency, Effectiveness, Self-reliance, Bootstrapping,

Coverage, Sustainability• Countries like Ghana, Cameron, Bolivia have tried their hands in

public participation and consultation and with positive result.


NGO’s Role for social and economic enhancement Case Study of BRAC(Bangladesh Rural Adv. Comm)

• Benchmark for how NGOs can extend their activities in face of deficiencies in government and private sector actors.

• The poverty is chronic and structural, government is under capacity and plagued by corruption

• Almost self reliant, 70% from internal source, productive enterprise it has established (Bootstrapping)

• Twin aim of poverty reduction and income generation• Microcredit plus plus• Education to local children, less homework, women teachers

from village 97%• Flexible class hours• Over 1 million students in 8000 schools, 65000 teachers• Now has its affiliates in Afghanistan, Pakistan, Sudan, Sierra

leone, LibiyaHatemalo Nepali Students Group

Conclusion

• Accountability• Participation• Knowledge of Right and Duties• Optimum utilization of resources• Responsibility


economy,growth & development :ideas from around the world that clicked name: sandesh paudyal ca...

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