Economic development Essay
“Economic development is a process by which an economy is transformed from one that is dominantly rural and agricultural to one that is dominantly urban, industrial, and service in composition. ” . Measurement of the Economic development of a country has always been a challenging task for economists.
Unlike economic growth which is quantifiable in terms of GDP and per capita GDP, Economic development is a collective phenomenon, which apart from the per capita GDP, involves health ( life expectancy, infant mortality, immunization etc. ) education ( literacy rate, average years of education etc. ) and other economic factors ( poverty level, unemployment rate, inequality etc. ) . Economic growth, no matter how large scale, alone does not make a country economically developed.
While economic growth depends on the economic factors, economic development takes into account several diverse factors such as the country’s development objectives with the available resources- both natural as well as acquired, core competencies, per capita productivity levels, human resources and its development through opportunities in education and skills development, advancement in technology, bilateral relationship with neighboring countries and the world at large, access to international markets and resources, accessibility for international companies and financial institutions and so on.
Economic development happens when a country has the system in place to take the benefits of the economic growth to all segments of the society. This functioning of the system determines the Economic efficiency. Dudley Seers, the economist says that problems related to illiteracy, health, population growth, urbanization, and agriculture reforms, all effect a country’s economic development, and to determine the appropriate economic development of a nation is difficult.
The concepts of “redistribution with growth” ( RWG) and “basic human needs” ( BHN) are attempts by various economic institutions to establish a reliable index for measuring economic development. However, economists still use GDP and per capita GDP as the premier yardstick of a nation’s economic development. In this paper, in order to examine the measurement of economic development and to establish its indicator, the facts and data of a specific country are used as sample. The country of choice in this paper is United Arab Emirates. 2.
Profile of the country and development records The United Arab Emirates ( UAE) is a constitutional federation, established on 2 December 1971, consisting seven emirates. They are Abu Dhabi, Dubai, Sharjah, Ajman, Umm al-Qaiwain, Ras al-Khaimah and Fujairah. Covering an area of 83,600 sq km along the southeastern tip of the Arabian Peninsula, UAE shares its borders with Qatar on the west, Saudi Arabia on the south and west, and Oman on the north and east. The capital of UAE is Abu Dhabi, also capital of the Emirate of the same name.
Though Four-fifths of the UAE is desert, it is blessed with a variety of contrasting landscapes splattered with shifting sand dunes and rich oases, Rocky Mountains and fertile plains. UAE has an estimated population of 2. 23 million. The majority of the people live along the two coastal areas. In the summer, the climate is hot and humid with temperatures reaching 50oC. Arabs, formerly nomadic Bedu and agriculturists, are the nationals. Economic Background The oil price rise of 1973 shifted the focus of the economy from traditional industries of pearl production, fishing, agriculture, and herding to petroleum and related products. The U. A.
E. has huge proven oil reserves, estimated to last the next 150 years. Over 70% of total imports are in manufactured goods, machinery, and transportation equipment. Another important foreign exchange earner, the Abu Dhabi Investment Authority–which controls the investments of Abu Dhabi, the wealthiest emirate–manages an estimated $600 billion in overseas investments. Jebel Ali, a free trade zone and a deep-water port, houses more than 6,000 companies from more than 120 countries for manufacturing and distribution with a 100% duty exemption. Except in the free trade zones, all business units require at least 51% local citizen ownership.
This is to encourage the local people into leadership positions. Even though inequalities exist and the standard of living is different from region to region in the UAE, the poverty level across is close to zero. This can be attributed to the strong policies taken by the leadership devoting a high percentage of the petroleum revenue for betterment of the poorer nationals. Geo-political issues – implications The leadership of UAE has always been diplomatic in its views on globalization. Never getting drawn into controversial issues such as 9/11, Iraq etc.
While quite a few of the countries in the Gulf region, are finding it a challenge to get the globalization and liberalization policies going, UAE has been successful in separating the two issues. UAE is blessed with a flexible style of government and relatively higher wealth of the country’s citizens. But UAE has to be alert to the sudden changes in economic situation if political instability surfaces through unpredictable events. The UAE federal government has often taken a subtle critical stand on US policy on the Arab-Israeli conflict and Iraq, but has never allowed these to affect its relationship with the US.