developing world

Those countries that are less developed than the industrialized free-market countries of the West and the industrialized former communist countries. Countries of the developing world are the poorest, as measured by their income per head of population, and are concentrated in Asia, Africa, and Latin America. The early 1970s saw the beginnings of attempts by countries in the developing world to act together in confronting the powerful industrialized countries over such matters as the level of prices of primary products, with the nations regarding themselves as a group that had been exploited in the past by the developed nations and that had a right to catch up with them. Countries that adopted a position of political neutrality towards the major powers, whether poor or wealthy, are known as non-aligned movement.

Many development studies refer to developing countries as ‘the South’, and to developed and industrialized nations as ‘the North’, because most developing nations are in the southern hemisphere and most industrialized nations are in the northern hemisphere. Developing countries are themselves divided into low income, or least-developed countries (LDCs), such as Angola, Sudan, Bangladesh, and Myanmar; middle-income countries, such as Nigeria, Indonesia, and Bolivia; and upper-middle-income countries, such as Brazil, Algeria, and Malaysia. The developing world has 75% of the world's population but consumes only 20% of its resources. In 1990 the average income per head of population in the northern hemisphere was $12,500, 18 times higher than that in the southern hemisphere, and developing countries accounted for 10% of world exports of manufactured goods. In the 1990s the developing world increased its global share of merchandise exports by 17%, most of the share being in office and electronic equipment, particularly from Mexico, China, and East Asia. However, the exports of the majority of least-developed countries were still confined to primary commodities (cash crops and unprocessed minerals), and growth here remained slow and unpredictable over the period, declining in some years. More than a third of low-income countries saw exports decline in 2000. At the beginning of the 21st century, 1.2 billion people were still existing on less than $1 a day, with another 1.6 billion living on less than $2 a day.

Problems of the developing world Despite enormous differences in history, geography, social structure, and culture, countries of the developing world have the following characteristics in common: their modern industrial sectors are relatively undeveloped; they are mainly producers of primary commodities, which are affected by adverse weather conditions; their primary commodities are produced for Western industrialized countries, and are subject to fluctuations in supply and demand; and their populations are poor and chiefly engaged in agriculture. Other problems associated with developing countries include high population growth and mortality rates; poor educational and health facilities; high levels of underemployment and, in some cases, political instability. Countries of the developing world, led by the Arab oil-exporting countries, account for over 75% of all arms imports.

Economies of the developing world Until the 1990s the economic performance of developing countries was mixed, with sub-Saharan Africa remaining in serious difficulties and others, as in Asia, making significant progress.

In South East Asia the four so-called ‘dragons’ of Hong Kong, South Korea, Singapore, and Taiwan developed to such an extent that they are known as newly industrialized countries (NICs), with per-capita incomes comparable to many Western industrialized states. Malaysia and Thailand also developing quickly, along with, more erratically, Argentina, Brazil, Chile, Mexico, and Peru.

By 2000, merchandise exports in the developing world rose to 27% of the world total. For the first time, electronic and office goods accounted for a larger share of total exports than agricultural or mining commodities. In 2000, the value of merchandise exports from the least-developed countries rose to a record $34 billion, an increase of 28% over the previous year. However, this growth represented only a small number of countries: those whose exports are mainly manufactured goods, those with strong links to multinational companies, and oil-exporting countries. The exports of the majority of low-income countries remained confined to a few primary commodities, and these exports declined in 2000. Some countries involved in military conflict, such as Afghanistan and Somalia, saw exports fall to levels below that of the 1970s. In 2001, growth in exports and imports slowed even in high-performing countries, particularly in Asia.

Debt Failure by many developing countries to meet their enormous foreign debt obligations has led to stringent terms being imposed on loans by industrialized countries, as well as rescheduling of loans (deferring payment). In 1996 the World Bank and International Monetary Fund (IMF) launched the Heavily-Indebted Poor Countries (HIPC) initiative to reduce the debts of low income countries, in particular the interest being paid on debts. The 1999 Cologne Debt Initiative (or HIPC2) by members of the Group of Eight (G8) industrialized countries aimed to speed up debt relief, in order to release funds for fighting poverty rather than debt servicing (paying the interest). In December 1999, the UK government announced that it was to cancel debts owed to it by the world's heavily-indebted poor countries. By April 2001, 22 low-income developing nations were receiving debt relief of some $20 billion under the HIPC initiatives, although debt-relief campaigners pointed out that 16 of these continued to spend more on debt servicing than health.