It is very desirable to have growth, because it creates extra resources which can be used to reduce poverty, that is equal to an increase in real national income, which afterwards allows more goods and services for consumption, what is the foundation for the more desirable development. Therefore growth is the major objective which developing countries strive for. For example in Zambia the government takes over the entrepreneur role to support growth.
But Economic Development is not only a much broader concept (see curve below in “PPF –development” right diagram), it also combines economic growth with an improvement of the standard of living, which benefits both rich and poor people (because necessities are needed by both):
diagram 2: PPF- development
But the problems of developing countries for growth and development are lacks in the infrastructure (includes machines, skilled, specialized, divided labor, technical knowledge) to produce modern goods and services more efficiently, too rapid population growth for available resources, not enough savings to finance investment and large foreign debts.
Problems of developed countries of growth are features like increases in noise, anxiety, , congestion, pollution and that extra machines can be produced only by using resources currently involved in making consumer goods and services, as well as the high risk of losing the traditional way of life, as seen today for example in the United States.
Developed and developing countries grow and develop by improvements in the quantity and quality of the FOPs that a country has available with respect to the limitations of the FOPs (e.g. diminishing returns). Increases in the supply of labour can increase economic growth, increases in the population can increase the number of young people entering the labour force, increases in the population can also lead to an increase in market demand thus stimulating production. The quality of labour depends on the educational provision in the country. Improving the skills of the work force is seen as being an important key to economic growth. Many developing countries have made enormous efforts to provide universal primary education. As more and more capital is used, labour has to be better trained in the skills to use them.
The level of investments and the quality of investments will directly affect the level of economic growth. The efficiency of the labour force and the other factors of production will depend upon the amount and quality of capital they have. But only in developing countries a lot of the investments come from abroad.
To conclude the key issues concerning economic development and economic growth are very essential to developing countries, since they lack in both. But if they manage - inventions and innovations must be encouraged - to obtain economic growth and economic development they will be efficient over time.
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