Examine the Indicators used to measure development and assess their usefulness

and obtain than other indicators. This one figure also plainly shows whether an economy is contracting or expanding, which enables a country to be separated into either a developed or developing country. Furthermore, since GDP is a quantitative measurement it can be used to compare countries and used to create a hierarchy of countries. However there are limitations to its use and validity. The biggest dethronement of GDP is that it hides inequalities and therefore can be misleading. For example if you looked at the GDP of Iran it might seem quite developed (because the GDP is quite high), but in reality there are some really wealthy and some really poor people. Secondly, GDP doesn’t include statistics on the informal economy, which are very prominent in less developed countries. For example, black market trading or unreported cash payments for goods and services. Therefore simply using GDP as a measurement for development could make a country appear less developed and poorer than in reality, due to the measurement’s ignorance towards certain aspects of an economy. The GDP’s frequent use implies that it is the only measurement for economic growth, which is false. Other indicators of economic development include Purchasing Power Parity (PPP), which is basically GNP adjusted to local living costs. It takes into consideration the local income of a country and what it can buy there, not considering the price of commodities on the international market. Therefore it gives a more accurate statistic representing the wealth of a particular population. PPP also takes into account trade, unlike GDP. This is a huge benefit of using PPP since trade is usually a big part of a country’s economy and some measurements e.g. GDP, misses this out which is misleading and could suggest a country is less developed than it actually is. PPP gives a more accurate representation of a country’s economy. Occasionally the Sectorial Balance is used to determine the development of a country’s economy. This looks at the rising levels of material production and consumption. The higher the number of people employed in agriculture in a country, the lower the stage of development the country is in – indicated by the DTM. In developed countries, mechanised farming methods reduce labour requirements. For example in Kenya (a developing country) 80% of the working population is employed in agriculture. The Sectorial Balance indicates how far a country has been able to industrialise, thus indicating its economic development since industrialisation is expensive. However a limitation of this measurement is that some countries have developed through agriculture yet this wouldn’t be identified using the Sectorial Balance. However the DTM shows that less developed countries in stages 2 and 3 most commonly have economies which are predominantly based on agriculture, which shows that the Sectorial Balance would be more than often, rather accurate. However development isn’t simply just based on the economy of a country.  Social factors also contribute to a country’s development. To measure this Adult Literacy rate is a good indicator. It shows the percentage of adults in the country who are able to read and write. One negative aspect of this is that literacy is a relative concept, therefore no measure can separate literate from illiterate. A cut-off point is not entirely accurate since there are many different forms of literacy, some adults cannot differentiate between ‘you’re’ and ‘your’ however we do not class them as illiterate. Despite this the Adult Literacy Rate reflects the education system of a country and one can deduce from the rate how many children are in school and how many stay in school. For example the UK’s rate is 99% (99% of the population can read and write) this shows that nearly all children attend school and are able to read and write at the end of their education, indicating our education system is rather effective, which shows the UK to be socially developed. Development can also be measured using demographic data such as infant mortality, life expectancy, natural increase mortality rates and population density. All of which are important when comparing countries. Usually these rates are reliable for depicting the development of a country, for example a country with high mortality rates e.g. South Africa – 17.2, is likely to have poor health care, diet and sanitation hence why so many people are dying. Therefore reflecting that a high mortality rate shows a country to be less developed. All these measures have limitations when they’re used on their own, since they’re averages therefore they don’t show up elite groups in the population or variations within a country. For example if you looked at the GNI (Gross National Income) of China, it might seem quite developed since it’s very high; except there are still a vast number of the population who are rather impoverished. These measurements also shouldn’t be used on their own because as a country develops, some aspects develop before others, so it might seem that a country’s more developed than it truly is. This is why composite indicators are often used e.g. HDI.