Economic Growth and Development: Impact on Society and Environment
Economic Growth and Development
Unit 12: Economic Growth and Development
Economic growth refers to the continued increase in a country’s real output. When a country’s actual production increases, it raises the level of employment and income of its citizens, therefore increasing consumption. The state collects more taxes, which will raise revenue and increase public spending. The variables used to measure economic growth are real GDP and real GDP per capita.
Development occurs when there are a number of changes that improve the political, economic, and social aspects and enhance the quality of life for a country’s inhabitants.
Social Indicators
- Life expectancy
- Level of education: percentage of the population currently studying at different levels
- Degree of qualification of labor and industrial disputes
Economic Indicators
- Level of economic growth measured by GDP
- Degree of uniformity in the distribution of income
- Weight of national production sectors
- Percentage of GDP spent on research and development
Policy Indicators
- Degree of democracy
- Level of regulation of economic activity by the public sector
Factors Contributing to Development
Improve the level of productivity, which depends on productive human capital, natural resources, and technological expertise.
Savings and investment: Governments can encourage savings for income from investments to accelerate growth and raise living standards.
Education and training: Human capital is seen as crucial for enhancing productivity and, therefore, for enhancing economic growth.
Political stability: There must be a system of government that provides stability for its political life.
Free trade: Improves the possibility of economic growth in all countries, since it expands markets and, therefore, accessibility to a variety of products.
Population control: Spreading the higher income generated by growth among a smaller number of citizens, so that there is an increase in individual welfare.
Consequences of Development
Pollution, resource depletion, and environmental degradation: Growth achieved by the intensive use and abuse of natural resources is limited.
Concentration of the population in large urban centers and the abandonment of rural areas.
Enlargement of the gap that separates rich and poor nations.
Characteristics of Underdevelopment
Imbalance between population and resources: There are more people; therefore, there are fewer resources.
Low income per capita.
Imbalance between productive sectors: Agriculture predominates, but production is insufficient to cover minimum needs.
There is an economic and social dualism that is manifested in the coexistence of a backward productive sector and another advanced, modern one. The social aspect is reflected in the existence of a minority of the population with very high levels of wealth, as opposed to absolute poverty.
External Dependence and World Trade
Great external dependence and low participation in world trade: Trade relations are based on unequal exchange, and there is strong external debt.
External Debt: Debt held by underdeveloped countries and has the main characteristic of the impossibility of making it effective. Increased dependency limits their opportunities for growth and development. Reasons include unequal exchange in trade relations and the absence of investments that generate domestic economic growth. The accumulated debt of the third world amounts to 250,000 million dollars. They have to pay large sums in patents, and borrowings are diluted.
Environmental Problems
Caused by excessive and uncontrolled consumption of natural resources. Moreover, the increase in population leads to resource depletion, waste generation, and degradation of the planet.
Measures to Solve Environmental Problems
Promote the use of alternative and renewable energy sources.
Environmental education: Raising awareness and instilling the benefits of using natural resources responsibly.
Regulation, national and international standards in environmental matters and pollution.
Income and subsidies: The state can establish political and economic measures to tax-generating activities and subsidize negative reporting positive effects.
Sustainable Development
Meeting the needs of the present without compromising the ability of future generations to meet their own needs.
Fundamental Ideas of Sustainable Development
Satisfaction of needs: Seeks to meet the needs of the present without compromising the ability to do so in the future.
Environmental protection.
Strategy for Sustainable Development
Commit to growth with lower consumption of materials and energy.
Development should occur in both rich and poor countries.
Satisfy essential human needs.
Maintain a safe and sustainable population level.
Give a new approach to technology.
International cooperation.
Consider the economy and environment in decision-making.