THE SPECIAL PROBLEMS OR OBSTACLES TO ECONOMIC DEVELOPMENT OF DEVELOPING COUNTRIES
The process of economic development shall not only generate an increased or enhanced means for production but it shall also make a room for the equitable distribution of such resources. Thus by the terminology economic development it is meant a process to raise the per capita output with the scope for an equitable distribution; attainment of the higher level of productivity in relation to almost all sectors and a far better level of living for general masses. To achieve the path of economic development in an underdeveloped economy is really full of hurdles or the impediments.Attaining the higher level of economic development is the function of level of technology. Economic development is thus process which relates to raising the rate of capital formation, i.e. both physical capital and the human capital. The problem of economic development for the developing nations has been the never ending one after the World War II. The Least Developed Countries are defined by political scholars as “Countries at a relatively low level of economic growth and development.” Problems of economic development are the problems of accounting for observed diversity in the levels and the rates of growth of the per capita income across the countries and across time.
There are numerous of obstacles that the developing countries face in the path of economic development. One of the major hindrances in economic development which are faced by developing countries isVicious Circle of Poverty .It is considered as one of the major constraints or obstacles to the path of economic development of the underdeveloped countries. Vicious circle in the underdeveloped countries represented by low productivity is resulted from capital deficiency, market imperfections, economic backwardness and poor development.
This vicious circle operates not only on demand side but also on supply side.
Low productivity results in low level of income and low rate of savings leading to low rate of investment, which is again responsible for low rate of productivity. Thus the vicious circle of poverty is resulted from various vicious circles related to demand side and supply side of capital. These vicious circles of poverty are mutually aggravating and it is really difficult to break such circles.
Increase in the population is also affecting the economic development of the less developed countries. The populations of less developed countries are sharply increase. Most of the less developed countries are facing many problems in the path of their economic development. The mostly countries in Asia and Africa, the rate of population growth between 2% to 3% which affects the economic growth and this is the big hurdle for the developing countries.
When population is increase then there is abundance of inefficient human resources in less developed countries. Ineffective human resources are also a major hurdle in the path of economic development for developing countries. Though there is an extra labour in the developing countries but these labours having no knowledge or skills. It is easy to say that due to high population so that result is poverty and it makes the families to fulfill their basic need that isfood, cloth, and house only. Developing countries are deteriorating due to untrained and unskilled labors are there So production system of developing countries are also going backward.
An external debt is also major problem for developing countries in economic development. When government takes actions for some major projects then he has to take loans from international nations. So these services and debts are chargeable and increase day by day. When we are taking loans from external resources then we have to follow the conditions of donors and this is the obstacle in the economic growth of developing countries.
Backward Technology is also one of the main reason due to which developing and underdeveloped countries could not achieve the goal of economic development. The less development countries are neither able to purchase new and modern technologies nor able to adopt latest technology. The developing countries are having large number of labors but there is lacking of capital resources. So developing countries technology is backward and due to the backwardness of technology the developing countries production system also fails.
Political inconstancy is also big hurdle for the developing countries of their economic development. Most of the developed countries and less developed countries are confront this problem of the political inconstancy which results from the regular change in the government, corruption and also disturbed the internal law and rules. Such type of political inconstancy causes uncertainty about the future steps and it affects the economic growth or development of the less developed countries.
Moreover, the corrupt administration in these developing countries outcome the huge leakage of public fund which is given to them for developmental activities.
It has been rightly observed that economic development “is not just a matter of having plenty of money nor is it purely an economic phenomenon. It embraces all aspects of social behavior, the establishment of law and order, scrupulousness in business dealing, including dealings with the revenue authorities, relationship between the family literacy, and familiarity with mechanical gadgets and so on. ”
The economic development of country is not easy and doesn’t simply requires the removal of these basic hurdles/barriers like market imperfection, An external debts, Increase in the population and vicious cycle of poverty but with this removal it also requires some special actions which are related to economic development like participation of the people, economic organization and equality income and so on.
The participation of People is very necessary in developmental activities or projects and also legal and principle force behind all the developmental activities and projects by the under developed countries. If people participation is not in their schemes or projects then this economy strategy can’t be effective.
It was observed, “Popular enthusiasm is both the lubricating oil of planning and the petrol of economic development—a dynamic force that makes all things possible.”
The role of Economic organization in economic development of less developed countries is also very important. For making the development planning and strategies of a nation’s effective it has to be undercover by the proper economic organizations for the encouragement of such economic development and not restraining it in any way. The economic organizations of the country should be active and always present to respond for the various requirements of the planning for economic development.
A proper balance between private and public sectors initiatives is also very necessary to involvement of such an effective economic organization. If the countries want to achieve rapid economic growth then the underdeveloped countries should introduce rational reorganization of their economy.
The developing countries are highly attaining the Administrative Efficiency in their countries. The existence of the stable strong, efficient and the honest government machinery appears to be considered an important condition for the economic development.
The developing country shall also build up domestic base for the purpose to achieve economic development. It means whatever the initiatives has taken for the purpose to achieve economic development that shall come from within their economy of such underdeveloped country not outside country.
There are many other factors which have degrade the economic growth of developing countries. Among these we may mention the following:
Pellagra System: In the developing countries like India, agriculture has been carried on in a very effective manner. Lack of adequate irrigation facilities and fertilizers, primitive agricultural practices, proclivity the peasant, outmoded systems of tenure. uneconomic holdings arc some of the reasons for the backwardness of Indian agriculture. Excessive dependence on agriculture itself is a major cause of the economic backwardness of the e countries.
Lack of Technical usuage: The use of modern techniques in the field of agriculture, trade and industry is indispensable for economic progress. But industrialists and businessmen in under-developed countries are blissfully ignorant of such techniques and thus Recife terribly handicapped in the economic race.
Lack of Technical knowledge: The use of modern techniques in the field of agriculture, trade and industry is indispensable for economic progress. But industrialists and businessmen in developing countries are blissfully ignorant of such techniques and thus face terribly handicapped in the economic race.
Social Structure, Not only have the economic factors handicapped economic progress of the developing countries but social factors, too, have played their part to keep them economically backward, Social structure has proved inimical to economic progress. Among the social forces impeding, for instance, India’s economic progress we may mention the following
Joint Family acts as another serious obstacle to economic progress of the developing countries {for example INDIA}. Tile system breeds drones, seriously imperils the will and the power to save, since cartloads to extravagance on the part of sonic members. It kills initiative and enterprise in the younger nonmembers of the family. for they expect to be comfortably looked after by Dickhead of the family, In short, the joint family system results in shortage of capital and low rate of capital formation which is a major cause of the tardy economic growth in India
But in 1975-76, owing to certain government measures and cooperation of the people putting in greater effort, there was a welcome hanger on the economic front. Consequently, the process of development picked up with amazing speed
with the advanced countries have also kept the developeing countries in a state of development. In other words, international trade has worked to the disadvantage of the developing countries and perpetuated their poverty. As Prof. Raul Archbishop has observed, there has been a secular stagnation in the terms of trade of the developing countries. He says that “over the last seventy years. the peripheral developing countries have suffered with fatal effects of a continuous weakening in their capacity to impact. It has led to the weakening of the capacity of their existing primary producing industries to support their growing population, it has resulted in a failure to transmit to them the benefit of technical progress; it has finally lowered their rates of capital formation and thus of their economic growth.
Foreign trade has a very large ‘spread-effect’ on developing economics. That IS, developing economics arc exposed to the beneficial effect of foreign trade in terms of economic development. On the other hand. developing economies are on exposed to the cyclical effects of foreign trade chichi inevitably results in economic instability and impedes economic
unemployment on large scale in developing countries is still in a large number. As Gunner Myrdal observes in his hook “Economic Theory and developing Regions” foreign trade has only yielded ‘backwash’ effect in the economies of developing economies. We thus see how development of developing countries has been adversely affected by international economic relations.
There are some economic obstacles of economic growth which is necessary to be shown here:
Lack of capital:
There is lack of capital and foreign exchange in developing countries .Lack of capital and foreign exchange are a big hurdle in way of economic development. Per capita income is very low . level of per capita income is also very low.
Poverty it comes because of low income
poverty is the greatest obstacle in way of economic development. In developing countries there is low income that leads to low saving and low investment. Low level of investment causes low rate of capital formation, which stops the economic development.
Backward in Natural Resources
No doubt, developing countries including india have rich and many kind of resources. But due to backward state of technology these resources are un-utilized, under-utilized or mis-utilized. So, the improper utilization of natural resources is also a obstacle in the development process.
Backwardness in quality,quantity of technology
Use of backward technology is another problem of economic development. Due to use of backward technology productivity level of our labour and its efficiency is very low. Productive quality and quantity is also inferior due to use of old means of production.
Inflation
High rate of inflation is also a main obstacle in a way of economic development. Due to inflation purchasing power of people decreases, their consumption increases and saving decreases. Low saving leads to less investment and a country remains poor and backward.
Low Per Capita Income as compared to developed nations:
Per capita income of india is very low as compared to the rich nations. Low per capita income is due to low level of national income and high rate of population growth. Low per capita income results in low saving and low investment. So, in the economy, capital formation rate is low that is a serious obstacle in way of economic development.
Debts which is internal and external in nature:
To operate some major projects in our countries, government has to take loans from national and international resources . These debts and their services charges are increasing day by day. While taking loans from abroad we have to follow the terms and conditions of foreign donors that is the obstacle in our growth and development process.
Dualistic Economy
Dualistic economy refers to the huge difference between various economic sectors. There are vast regional and income disparities in india. There is co-existence of fully advanced and fully backward state of technology in the same sector at the same time. Similarly, population of india is very rich and very poor; it is also a hurdle in economic development.
Deficit Balance of Payment;. Higher imports volume than exports are an obstacle in way of economic development.
B. SOCIAL OBSTACLES
These are the major social obstacles in way of economic development of Pakistan:
Illiteracy
Due to illiteracy our farmer and industrialists are ignorant. Efficiency and productivity level of our labour is poor due to illiteracy. Use of modern techniques of production is impossible due to illiteracy. Accordingly, illiteracy is a difficulty in way of economic development.
Low Living of Standard
Low level of living is a obstacle in the way of economic development. Poor population is not provided appropriate facilities to make high standard of life. Low level of living, low income, inadequate housing facilities, poor health etc. are the problems of economic development.
Unproductive form of Expenditure:
Most of the expenditure of people is unproductive like expenditure on various rural fairs and festivals. People in developing countries prefer to keep resources in cash form in lockers at home. If They invest in real estates and in gold and silver ornaments. These resources can be used for economic development.
Rapidly Rising Population
In developing countries like india population growth rate is very high The rapid backward population growth is also a obstacle in way of economic development. This rapidly increasing population leads to starvation and various crimes against the society.
C. CULTURAL OBSTACLES
Some Cultural obstacles are given below:
Customs and Traditions:
In developing countries like india, people spend huge portion of their incomes on customs and traditions. Sometimes they have to take part in the arrangements of rural festivals that reduce their savings. People have to spend more on marriage, birth and death times in our country.
Wastage of Resources in Litigations
Legal process is very costly and lengthy in india. Especially, the large part of our farmer’s income is wasted in litigations. It is wastage of resources and reduction in the rate of saving.
Low Participation of Women: The low proportion of participation of women in economic activity that is also an obstacle in the way of economic development.
flow of the Best Brain
Brain drain is also a problem in way of economic development. In our country, honour, dignity, self-esteem and authorities of qualified person is very low. So, they are bound to go abroad to provide their services for other nations.
In-efficient Entrepreneur
Due to illiteracy and lack of training institution in our country entrepreneur is in-efficient. In-efficient entrepreneur is a cause of economic backwardness. Illiterate entrepreneur cannot maintain the proper record of his business to earn maximum profit.
Conclusion:
Economic development in developing countries is facing a lot of obstacles . It is very difficult to remove all these obstacles but with proper hard wrok we can remove . Government should adopt self-reliance policy and adopt modern technology to remove these complications.
