Economics/Country status

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Question
All the world nations are not economically equal. They are bracketed into Under developed, Developing and Developed. What is the basis for this classification ? Can you make it understandable to a common man ?

Answer
I thank you for selecting “allexperts” and particularly me, to answer your question. This is an important knowledge everyone should have. But nobody has provided an answer, understandable by all commom man.
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I am  providing an extract from my book  “Essential Economic enquiries and  Innovative Inter-Operable Answers” in  Pages 95 to 100.  
ISBN : 978-1497411678.     
You can see at  <www.drvsrs.com/store/page1.html#26>
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There are multiple criteria to classify the economic status of a country. Gross Domestic Product (GDP or Total production value of commodities), Percapita income (Person’s Income per year), Level of health / hyghene,  Level of industrialization, Level of employment, Human development index  etc…
Refer : http://www.slideshare.net/ecumene/14-development-definitions-and-measuring-devel

But all these measures area quantitative with questionable accuracy and difficult to gather the right data. But I am providing a straight forward and directly observable and measurable answer to you.

1.   Balance of Payment Approach.

Balance of payments = Difference between receipts of goods, services and money from other nations and supply of goods,  services and money to other nations.

a)   A Developed nation keeps an eye on their balance of  payments  and reduces it to a possible minimum. Hence their currency exchange rate in the international market is high.
b)   A Developing nation has a loose control on their balance of payments. Over a period of time it increases. Hence their currency exchange rate in the international market has a medium or low trend.
c)   An Under Developed nation has a no control on their balance of payments. Borrowing funds from overseas is mandatory for their survival. Over a period of time it increases. Hence their currency exchange rate in the international market has a low trend.

2.   Budgeting Approach.

a)   A developed nation budgets their Income first, Expenses second. By this approach, (Income – Expense) is positive or a surplus. They apportion the surplus for productive use, within the country. If the (Income – Expense) is negative or a deficit, they will domestically create the sources to meet it or arrange for external assistance with plans for quicker repayment.
b)   A developing  nation budgets their Expense first and  Income second and end in a deficit budget. They have sizeable internal income. But all their Internal income are apportioned to meet the expenses. Then they find external financial sources to make up the deficit. They also do not properly plan for the repayment of the external loan funds.
c)   An under developed nations budget their Expense first and  Income second and end in a deficit budget. They have limited internal income and all of them cannot meet their expenses. Then they find external financial sources to make up the deficit. They do not properly plan for the repayment of the external debts.

3.   Citizen Behaviour Approach

When the national election is announced,

a)   The citizens of a developed nations evaluate the credibility and capability of every candidate competing in the election. Vote for only those who are sincere to the nation, adequately qualified and capable of directing the nation towards economic and social development.  Hence optimum capable persons get elected.
b)   The citizens of a developing nations evaluate the candidates as who can satisfy their personal needs (even though they are against the development and security of their nation), accept money from the candidates and vote for them. Mostly socially popular candidates like Cine stars, Terrorists, Robbers etc.. or persons of  deleterious and dangerous nature get elected.
c)   The under developed countries are in poverty, without sufficient basic needs (food, shelter and clothing). So the self assumed leaders, irrespective of their sincerity to the nation, incapable of  developing the economy and social upliftment, get elected.

4.   Discrimination

Discrimination is a social tool to divide the citizens of a nation on religion, caste, sex, race, community etc… and accordingly provide or not provide education, jobs, essential needs, health and hygiene  etc.. It was used by British rulers in South Africa, on White and Black colour basis of the human beings. Now discrimination is eradicated in all the nations in the world. But, still it is practiced and promoted in many countries.

a)   A developed nation, treats all their citizens as equal and considers the provision of essential needs, education and other opportunities for all the citizens, at equal level. Even if there are any discrimination in the country, the government takes appropriate action to remove them.
b)   The constitution of a  Developing nation will say that all citizens have equal rights and opportunities. But enacts amendments and legalise  the discrimination of  citizens on religion, sex, caste, race and as many factors as possible.  Based on these division criteria, they create quotas and reservations on education, all opportunities and supply of essential needs.
c)   Under developed nations have low population.  The citizens are either business men or workers. They are discriminated on the basis of wealth possession. There is little scope to discriminate the citizens left back in the nation, on criteria of apartheid.

5.   Essential Need Approach.

Food, Shelter and Clothing are the essential needs of the human being in all over the world.

a)   A developed nation is where people can get their essential needs within their annual income, and save a portion of their income.
b)   A developing nation is where people can just get their essential needs within their annual income and cannot save.
c)   An Under developed nation (or Least developed nations) is where people cannot get their essential needs within their annual income and suffer. Also the essential needs may not be available. So, the question of saving does not arise.
6.   Elected Member Behaviour Approach

a)   The elected members in the ruling responsibility of a Developed nation, think and behave as the government properties, facilities and funds belong to the nation. They use them for the benefit of the nation and people. They enjoy the money and perquisites as per the provisions in the constitution.
b)   The elected members in the ruling responsibility of a Developing nation, think and behave as if the government properties, facilities and funds belong to them. They use them for the benefit of the persons elected first, and then the reminder (if any left) for the benefit of the people, who elected them. They over enjoy the money and perquisites against the provisions in the constitution. The ruling hierarchy from top to bottom will be corrupt and protect  this robbery by the elected members.
c)   The Under Developing nations, do not have much wealth. They surrender the national wealth to the benefit of powerful developed nations. The developed national investors, utilise the natural wealth and labour, for their native country’s welfare and benefit. The citizens, who elected them, get marginal benefit by way of improved income, by giving their knowledge and work, at relatively lower value.   

7.   Fund Utilisation Approach

a)   The elected members of a Developed nation, utilise the funds (internally generated and from external loans) for the development of the nation and people. The quality of products and services provided from the utility of these funds will be  of high value.
b)   The elected members of a Developing nation, steal and perform large scale scams on the funds (internally generated and from external loans).  The quality of products and services provided from the utility of these funds will be  low and unworthy. Hence the elected members cheat the people who elected them and boost their wealth. The ruling hierarchy from top to bottom will be corrupt and frame laws to protect  the robbery of the elected members.
c)   The Under developed nations generate minimal domestic funds due to under utilisation of the country’s resources. They borrow large funds from abroad. They  lead the nation into debts and people of knowledge and skills emigrate to developed nations in search of jobs and affordable living.

8.   Government’s Right Approach

a)   The constitution of a Developed country proclaims that the elected government’s duty is to provide continuous and uninterrupted  public services (Electricity, Essential needs, Travel,  Water, etc… ) to the citizens who elected them.
b)   The constitution of a Developing country proclaims through amendments, that the elected government has the right to interrupt or stop any  public service, without any notice  to the citizens, who elected them.
c)   The under developed nations do not have any specific provision on the special rights of the government on public services. This is because of shortage or non availability of commodities and services.   

9.   Pricing Approach

a)   The Corporate Organisations (both in Government and private) in a Developed nation strive towards price reduction of essential commodities (food, shelter and clothing) at top priority, in order to reduce poverty at home.  Also they reduce the price of luxury items at a planned phase, for all the citizens to enjoy the luxury at increasing phase. They achieve these by applying the modern management techniques to reduce the cost of production and services.
b)   The Corporate Organisations in a Developing nation (both in Government and private) work to boost the income, luxury and enjoyment of the management and their employees. They collect the money required for their extravagant needs, by increasing the prices of commodities/services, and pool it from the customers. So, they progressively increase the number of people below poverty line in the country.
c)   The corporate organizations in an under developed nation are dominated by the developed country nations. They produce goods and offer services, at prices of benefit to their respective native nations and  their citizens.  These prices may or may not be palatable by the native citizens.

Reference : Author’s Book -  Poverty : A Corporate Creation & Ratio Controls For Eradication.  ISBN : 978-1484087442.
See at : http://drvsrs.com/stores/page1.html#25

Note : The above measures of the status of development of a nation is supported by the nations given in the example below.

Examples of countries :

   Developed Nations -  Australia, Canada, UK, USA, Many countries in Europe, Arabic nations.
   Developing Nations  -  India, Egypt, Srilanka, Many West Indian nations, Some African nations.
   Under Developed Nations -  Angola, Benin, Many African and Asian nations.
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Basically a B.Sc (Physics) from the University of Madras, India. Started the career in production engineering under German and Italian experts. MBA in Management from IIM, Ahmedabad (India). Ph.D (Management) from the University of Bomaby (the first ever awarded in this subject). Headed the computer centres of Multi nationals; "Data Processing expert" of the Commonwealth, London (To implement World Bank and UNDP Computer softwares); "Consultant Adviser" to the Caribbean Development Bank (CDB), Barbados. Associated with Nobel Laureate in Economic Science-1979, Arthur Lewis (Past President of CDB) & 4 more on his introduction. Visiting professor to many universities. A Trained ISO 9001:2000 Quality Auditor. Over 40 years of combined experience in Accounts, Computer Software, Economics, Engineering, Management, Science, Technology, Research & Development and Qulaity systems. Author of over 60 Application Research papers. Currently a free-lance consultant in ISO Quality Systems, Socio-Economic development acceleration, Innovative software designs. Can answer any question in Theoritical/Applied-economics with an in-depth and innovative dimension. I DO NOT ANSWER : 1. STATISTICAL data & analysis. 2. PRIVATE questions, as they do not appear for PUBLIC view & search 3. Examination & Project report oriented questions. Website http://www.drvsrs.com

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Experience in the area Over 40 years in Industrial, Service and Economic development sectors. Socio-economic development oriented expertise (1982-86). With Commonwealth Fund for Technical Cooperation, London as a "Data Processing Expert". With Caribbean Development Bank, Barbados (UNDP,World bank set up) as a "Cnsultant Adviser". See "http://www.drvsrs.com/drvsrs.htm" and "http://www.drvsrs.com/publication.htm". National & International awards. R & D Author at http://ideas.repec.org/e/psu50.html and http://www.ssrn.com/author=360079

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