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CHARACTERISTICS OF LESS ECONOMICALLY DEVELOPED COUNTRIES - Coggle Diagram
CHARACTERISTICS OF LESS ECONOMICALLY DEVELOPED COUNTRIES
Poverty and capital deficiency
Many LEDCs are caught in a vicious cycle of poverty
low levels of income
low levels of savings
low levels of investment needed to increase productivity
Absence of dynamic entrepreneurship
Cumbersome bureaucratic procedures that dampen their enthusiasm for new initiatives
High levels of unemployment or disguised employment
Many people will be working unpaid employment or working at tasks where production per person per low (so they are, in effect, unemployed)
Underdeveloped natural resources
Many LEDCs have:
poor-quality land
are prone to either flooding or a lack of rain
have fewer mineral deposits
often land-locked with restricted access to the outside world
Lack of infrastructure
Communication and transportation in LEDCs are not fully developed
Power generations are insufficient to meet national demand
Education and technology training may be low
Workers may lack skills that enable productivity to be increased
High level of population growth
Narrow export base
Over-reliance on a limited number of commodity exports means that fluctuations in the world commodity prices cause the whole economy to experience problems
Worsening terms of trade
imports of manufactured goods are greater than their exports of primarily agricultural goods or raw materials
Social, religious and cultural traditions
Hold back the pace of change and development in the country
Vulnerability to natural disasters
Vulnerability to events in the rest of the world
inflation in developed countries may cause their governments to increase the rate of interest
Makes borrowing for investment or trade very expensive
Unemployment or trade deficits in developed countries may bring about protectionist measures
A fall in the world trade, thus affecting LEDCs' exports