Question

What are the indicators of economic development, performance and potential. Give examples.

Answer 1

As a country develops it changes the nature of its internal structure, economy and population. While there are several gauges available for assessing these changes, the most common measures of economic development are per capita Gross Domestic Product (GDP), poverty level, life expectancy, the proportion of farm workers and improvements in physical quality of life.

The gross domestic product is the economic value of the goods and services produced of a country, and shows its economy's strength. Higher GDP per capita is an indicator of a more advanced level of economic growth. As the per capita GDP of a nation increases, the rate of poverty decreases. People earn more money, get more affluent and start accumulating capital. Poverty rates in per capita low Income countries also have a higher proportion of people living in poverty. For example, the Democratic Republic of Congo has 63 per cent of its population living in poverty, according to estimates from the Central Intelligence Agency.

Countries that employ the majority of their population in agriculture are considered to be less developed. Countries with more urban areas and towns are seen as more advanced. The Human Development Index (HDI) is a composite index developed by the UN Development Program to assess a country's level of economic development in three areas: education, health, and per capita income.