economy-nov-dec2010

INFOCUS | WORLD | ECONOMY

Developed Defined

Developed countries are shown in blue (According to the IMF, as of 2008)

T

he term developed country is used to describe countries that have a high level of development according to some criteria. Which criteria and which countries are classified as being developed, is a contentious issue and is surrounded by fierce debate.

Economic criteria have tended to dominate discussions. One such criterion is income per capita; countries with high gross domestic product (GDP) per capita would thus be described as developed countries. Another economic criterion is industrialization; countries in which the tertiary and quaternary sectors of industry dominate would thus be described as developed.

More recently another measure, the Human Development Index (HDI), which combines an economic measure, national income, with other measures, indices for life expectancy and education has become prominent. This criterion would define developed countries as those with a very high (HDI) rating. However, many anomalies exist when determining “developed� status by whichever measure is used.

Countries not fitting such definitions are classified as developing countries.

Similar terms Terms similar to developed country include advanced country, industrialized country, more developed country (MDC), more economically developed country (MEDC), Global North country, first world country, and post-industrial country. The term industrialized country may be somewhat ambiguous, as industrialization is an ongoing process that is hard to define.

The term MEDC is one used by modern geographers to specifically describe the status of the countries referred to: more economically developed. The first industrialised country was Britain, followed by Belgium, Germany, United States, France and other Western European countries. According to some economists such as Jeffrey Sachs, however, the current divide between the developed and developing world is largely a phenomenon of the 20th century.

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INFOCUS | WORLD | ECONOMY

Definition Kofi Annan, former Secretary General of the United Nations, defined a developed country as follows: “A developed country is one that allows all its citizens to enjoy a free and healthy life in a safe environment.” But according to the United Nations Statistics Division, There is no established convention for the designation of “developed” and “developing” countries or areas in the United Nations system.

And it notes that The designations “developed” and “developing” are intended for statistical convenience and do not necessarily express a judgement about the stage reached by a particular country or area in the development process.

Human Development Index (HDI), which combines an economic measure, national income, with other measures, indices for life expectancy and education has become prominent.

The UN also notes In common practice, Japan in Asia, Canada and the United States in North America, Australia and New Zealand in Oceania, and most European countries are considered “developed” regions or areas. In international trade statistics, the Southern African Customs Union is also treated as a developed region and Israel as a developed country; countries emerging from the former Yugoslavia are treated as developing countries; and countries of eastern Europe and of the Commonwealth of Independent States (code 172) in Europe are not included under either developed or developing regions.

According to the classification from IMF before April 2004, all the countries of Eastern Europe (including Central European countries that still belong to the Eastern Europe Group in the UN institutions) as well as the former Soviet Union (USSR) countries in Central Asia (Kazakhstan, Uzbekistan, Kyrgyzstan, Tajikistan and Turkmenistan) and Mongolia, were not included under either developed or developing regions, but rather were referred to as “countries in transition”; however they are now widely regarded (in the international reports) as “developing countries”.

In the 21st century, the original Four Asian Tigers (which are Hong Kong, Taiwan, Singapore and South Korea) are considered “developed” region or areas, along with Cyprus, Czech republic, Israel, Malta, Slovakia and Slovenia.

Human Development Index The UN HDI is a statistical measure that gauges a country’s level of human development.

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While there is a strong correlation between having a high HDI score and a prosperous economy, the UN points out that the HDI accounts for more than income or productivity.

Unlike GDP per capita or per capita income, the HDI takes into account how income is turned “into education and health opportunities and therefore into higher levels of human development.” A few examples are Italy and the United States.

Despite a relatively large difference in GDP per capita, both countries rank roughly equal in term of overall human development. Since 1980, Norway (2001–2006 and 2009), Japan (1990– 91 and 1993), Canada (1992 and 1994–2000) and Iceland (2007–08) have had the highest HDI score. Countries with a score of over 0.800 are considered to have a “high” standard of human development. The top 38 countries have scores ranging from 0.902 in Malta to 0.971 in Norway.

Many countries listed by IMF or CIA as “advanced” (as of 2009), possess an HDI over 0.9 (as of 2007). Many countries possessing an HDI of 0.9 and over (as of 2007), are also listed

by IMF or CIA as “advanced” (as of 2009). Thus, many “advanced economies” (as of 2009) are characterized by an HDI score of 0.9 or higher (as of 2007).

The latest index was released on October 5, 2009 and covers the period up to 2007. The following are the topm 10 countries with a “Very high human development” of above 0.900.

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Norway 0.971 (▬) Australia 0.970 (▬) Iceland 0.969 (▬) Canada 0.966 (▬) Ireland 0.965 (▬) Netherlands 0.964 (▲ 1) Sweden 0.963 (▼ 1) France 0.961 (▲ 3) Switzerland 0.960 (▬) Japan 0.960 (▬)

Other lists of Developed Countries Only three institutions have produced lists of “developed countries”. The three institutions and their lists are the UN list (shown above), the CIA list and the FTSE Group’s list, whose list is not included because its association of developed countries with countries with both high incomes and developed markets is not deemed as directly relevant here.

However many institutions have created lists which are sometimes referred to when people are discussing developed countries. The

IMF identifies 34 “advanced economies”, The OECD, also widely known as the ‘developed countries club’ has 30 members. The World Bank identifies 66 “high income countries”.

The EIU’s Quality-of-life survey and a list of countries with welfare states are also included here. The criteria for using all these lists and for countries’ inclusion on these lists are often not properly spelt out, and several of these lists are based on old data.

IMF advanced economies

Economist’s Quality-of-life survey of 2005 Research about standards of living and quality of life by the Economist Intelligence Unit resulted in a quality-of-life index. As of 2005, the highest-ranked economies are 1.

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Ireland Switzerland Norway Luxembourg Sweden Australia Iceland Italy Denmark Spain Singapore Finland United States Canada New Zealand

16. Netherlands 17. Japan 18. Hong Kong 19. Portugal 20. Austria 21. Taiwan 22. Greece 23. Cyprus 24. Belgium 25. France 26. Germany 27. Slovenia 28. Malta 29. United Kingdom 30. South Korea

n Countries described as Advanced Economies by the IMF. According to the International Monetary Fund the following 34 countries are classified as “advanced economies”: • Australia • Austria • Belgium • Canada • Cyprus • Czech Republic • Denmark • Finland • France • Germany • Greece • Hong Kong • Iceland • Ireland • Israel • Italy • Japan • Luxembourg • Malta • Netherlands • New Zealand • Norway • Portugal • San Marino[19] • Singapore • Slovakia • Slovenia • South Korea • Spain • Sweden • Switzerland • Taiwan • United Kingdom • United States The CIA has a modified version of an old version of the IMF’s list of Advanced Economies. The CIA notes that the IMF’s Advanced Economies list “would presumably also cover” some smaller countries. They are: • Andorra • Bermuda • Faroe Islands • Holy See • Liechtenstein • Monaco

Newsweek’s Quality-of-life survey of 2010 Research about standards of living and quality of life by Newsweek, resulted in the “world’s best countries” index, measuring: “health, education, economy, and politics”. As of 15/8/2010, the highest-ranked countries are: 1.

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Finland Switzerland Sweden Australia Luxembourg Norway Canada Netherlands Japan Denmark United States Germany New Zealand United Kingdom South Korea

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The term MEDC is one used by modern geographers to specifically describe the status of the countries referred to: more economically developed.

France Ireland Austria Belgium Singapore Spain Israel Italy Slovenia Czech Republic Greece Portugal Croatia Poland Chile 

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2010  India-China Chronicle |41|