Question

What information would you want to have available before recommending that your state or locality adopt certain economic development tools?

Answer 1

Economic development is the entire process by which a nation's economic, social and political well-being is improved.  Economic Development indicates change in a country’s economy that includes both qualitative as well as quantitative improvements. Some people consider economic growth and development same. However, it is not so. Economic growth is just one aspect of the entire process of economic development. Economic development also takes in account environmental issues.

As a country progresses and develops, its internal structure, population and finances changes. Some of the important indicators of economic development are as follows:

1. GDP per capita
The gross domestic product per capita indicates the strength of the economy as it is the economic value of a country's output of goods and services and indicates the strength of its economy. High GDP per capita is an indicator of a sophisticated stage of economic development.

As per data released by the Central Intelligence Agency, the nations with the high GDP per capita are Qatar, Macau, Liechtenstein, Monaco, and Luxembourg. On the other side countries with lower GDP per capita are the Central African Republic, Niger, the Democratic Republic of the Congo, Burundi.

2. Levels of Economic Development
The Countries in which most of their population is employed in agriculture are considered less developed. Countries with high urbanization (more urban areas and cities) are generally considered better developed and vice-versa. For Instance, in between 1percent to 2 percent of the population in the United States is employed in agriculture, while Zambia has 85 percent of its people working on farms.

3. Poverty Level Per Capita GDP
As GDP per capita of a country grows, the poverty rate declines. Consequently, People earn more money & begin to gain wealth.

It is a general observation that countries with low GDP per capita also have a higher proportion of people living in poverty. For instance, South Sudan and Yemen all have nearly 50 percent of their people living below the poverty line. These facts and figures are in contrast to a high GDP country like Switzerland. Switzerland has only 6.6 percent of its population living below the poverty line.

4. The Human Development Index
The Human Development Index (HDI) is a composite metric of education, health and per capita income that has been created by the United Nations Development Programme. Countries with the highest HDI are Australia, Switzerland, Norway, Denmark and the Netherlands. The countries with the lowest HDI are Eritrea, Niger, Gambia, Ethiopia and Afghanistan.

5. Higher Incomes and Life Expectancy
With a development in any country, its citizens move out of poverty, and their is surge in life expectancy People have more money and can afford better medical care.

Monaco has a life expectancy of 89 years. whereas Japan and Singapore have life expectancy of 85 years. Norway, Liechtenstein, Sweden, and Switzerland have life expectancies above 82 years.

Countries such as Somalia, Central African Republic, Zambia, and Mozambique have life expectancies barely above 50 years.

Birth rate, Death rate, and Infant mortality rate

These measures also assist in evaluating economic development.

6. Physical Quality of life Index
Physical Quality of Life Index (PQLI) measures the most basic needs of the people.

PQLI is determined by taking into account 3 measurements,

a. Infant Mortality Rate (IMR)
b. Life Expectancy at age one
c. Literacy rate

7. Employment and Housing – People with jobs have the capability to spend and invest. Consequently, both of these actions drive the economy. Each month, The Bureau of Labor Statistics (BLS) releases a report of Unemployment every year. Similarly level of housing is also an indicator of Economic Development.