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Question
Sir.  I have a doubt.
Impoverished Turkey is a developed country. While ultra rich Brunei, Dubai, Singapore, Taiwan and  South Korea  are developing  countries. How so?
Please answer,
yours, Jose. India  

Answer
Hi Jose,

Thank you for posing this very ticklish question of development economics.

You are very much right to question, from the angle of wealth and income, the validity of the point that Turkey, which is impoverished, may be construed as a developed country, while countries where there are people with very high incomes, such as Brunei or Dubai, are designated as developing countries.

Your question, on the face of it, appears quite legitimate. However, if we take a harder look at what the terms "developed" and "developing" imply --that is to say, what the real dichotomy between these two terms confronts us in development economics --then this apparent anomaly in designations of economies in terms of development may become clear. Let me begin with a preview of what we mean by "development."

When economists say a country is developed, they mean the economy is measured in different yardsticks: the important ones, often considered, come out something like:

(a) how technologically developed and independent the country is [by technology we mean the way production takes place on the basis of techniques of production (proportions of factors used)];
(b) how much the population of the country has overall information, scientific and otherwise; i.e., what the average level of information or knowledge is;
(c) what is the productivity per head of the people in the country?;
(d) is the productivity per capita sustainable, esp. in the long run?

So, the U.S. or Japan or France or Australia across four continents are "developed" in the senses as above. Take the case of Brunei.

There are some very rich people, no doubt. But what about the majority of the people. The income distribution is extremely skewed. [Of course, American income distribution is also skewed, but by American standards, an average poor American many times richer than a poor guy in Brunei.] The per-capita productivity of the people of Brunei is also very low. This goes all over Arabian peninsula --too many people are living like primitive people. Technologically, these countries are behind Turkey.

However, on the basis of the above, Singapore is more developed than, say Brunei.

You may be surprised why Taiwan and South Korea, which are also technologically developed, do not come within the purview of "developed" countries. It is again we have to consider the country "as a whole" with its "total population" and its "production per person." Too many people are wallowing in poverty, with very little education, having little exposure to technology, while no doubt few people are producing even cars. When we talk of "development," we need to view that across the country in the light of those few implications mentioned above about what may determine how far a country is on the path of development.

One caveat: This demarcation of "developed countries" is based on subjective reasoning and must not be considered "water-tight definitions."

I hope this answers your question. If you have further questions, please do not hesitate to ask. Best.  

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Eklimur Raza

Expertise

It appears some students in this website are confused about elasticity of demand and the slope of the demand curve when they are trying to figure out why rectangular hyperbola comes up in case of unitary demand curve. First, they don't know that RH can be depicted in a positive quadrant of price,quantity plane. Secondly, they make the mistake that the slope of RH is constant at -1. Two points could help them: first, e=1 at each and every point of the RH, because the tangent at any point shows lower segment=upper segment (another geometric definition of e); yet slopes at different points,dQ/dP, are different; second, e is not slope but [(Slope)(P/Q)]in absolute terms. Caveat: only if we measure (log P) along the horizontal axis and (log Q) up the vertical axis, can we then say slope equals elasticity --in which case RH on P,Q plane is transformed into a straight-line demand curve [with slope= -tan 45 deg] on (log Q),(logP) plane, and e= -d(log Q)/d(log P). [By the way, logs are not used in college textbooks --although that is helpful in econometric estimation of elasticity viewed as an exponent of P, when demand equation is transformed into log-linear form.] I have not found the geometrical explanation I have given in any textbook followed in undergraduate and college classes in Canada (including the book followed in a university where I taught for a short time and in the book followed in George Brown College, Toronto, where I teach.

Experience

About 11 years' teaching economics and business studies, and also English, history and elementary French.Practical experience in a development bank, working with international donor agencies like the World Bank and the ADB. Experience in free-lance journalism, including Canada's "National Post."

Organizations
I teach micro- and macroeconomics at George Brown College (continuing education), Toronto, ON, Canada.

Publications
Many articles and editorials, on different subjects, in English newspapers. Recently an applied Major Research Paper, based on a synthesis of the Solow growth model and the Lewis two-sector model, has be accepted by Ryerson University, Toronto. Professors Thomas Barbiero and Eric Cam, Ryerson University, accepted the paper.

Education/Credentials
Master degree in Interantional Economics and Finance and diploma with honours in Business Administration from Canada.

Awards and Honors
Received First Prize in an inter-university Literary Contest.

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