Lop Sided Development of Developing Countries PDF

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Mini research paper about the uneven development of developing countries....

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Lop Sided Development

An Academic Paper Presented to ___________

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Background Case Study – Uneven Development in India Although India has undergone rapid economic development in the last 20 years, it has great variations in wealth within the country. Generally, the states in the south and west (with the exception of Rajasthan) have a far higher level of development than the states in the north and east. These disparities are due to several reasons: Coastal locations such as Mumbai (in Maharashtra) historically benefitted from being linked to trade routes with the rest of the world. This is in contrast to landlocked states such as Bihar. This gap increased further when coastal locations allowed the south and the west to develop large container ports, which linked these states to an increasingly globalized world. The south and the west also had the lowest rates of natural increase compared to the high rates of natural increase in the north and the east. In Kerala, in the south, fertility rates are now 1.7 the same as in the UK. The Green Revolution (and also the increase in food exports) was greatest in the south and the west compared to the north and the west. Rajasthan, which separates the rich states of Gujrat and Haryana, is often affected by drought and crop failure due to the failure of the monsoon. These reasons led to the positive multiplier effect in the south and the west where a high level of development created a well-educated work force. This then attracted foreign investment from transnational corporations, further increasing the wealth of the south and the west. In contrast, the north and east of India are landlocked, therefore cannot directly trade internationally. This deters foreign investors from these regions. This can result in a lack of schools, transport networks and employment opportunities causing young people to move out of the region towards successful cities. This is known as brain drain.

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Introduction As nations continue to move forward into a more globalized world, they are also in a great position of developing their own economies. Globalization has changed the world into a much better place. Countries are now interrelated for various purposes, may it be for the betterment of their way of living, or of economic developments. However, not all countries experience the same situation in terms of development. Most developing countries like India, Philippines and Nigeria have experienced lop sided development in their own economies. Lop sided or uneven development in its simplest terms is the uneven development of an economy (Christophers, 2009). It exists in different levels and dimensions in an economy. According to Christophers, “This unevenness is seen to exist in various dimensions – different sectors of the economy, for instance, developing to varying degrees and at different rates – but, for geographers at least, ‘uneven development’ ordinarily implies uneven geographical development (2009).” Geographical uneven development is the most common kind of lop sided development experienced by developing countries like the Philippines and India, and South Africa.

What is the Problem/Thesis or Issue all about? With the growing concern of scholars and economists about development and its unevenness, various debates have been formed as to if lopsided development is a hindrance to developing countries or if it is a way for these countries to rise. General knowledge of the public has been that lopsided development is an enemy to the economy. However, according to Hirschman, “Development is a chain of disequilibria that must be kept alive rather than eliminate the disequilibrium of which profits and losses are symptoms in a competitive economy.” Thus, the researcher has addressed his curiosity and came up with this study which aims to clear the fog pertaining to the arguments in the said field. The researcher then ended up with the thesis statement: Lop sided development is not a hindrance to developing countries.

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How does this affect Global Business? After centuries of technological advancement and global economic improvement, the world is now more connected than ever. Globalization is the term coined to describe the emerging interconnectivity of countries. According to Fernando, Globalization is the spread of products, technology, information, and jobs across national borders and cultures. In economic terms, it describes an interdependence of nations around the globe fostered through free trade (2009). Globalization is the reason why people have access to almost everything today. From products, services and information, people can already access it without any hassle. It made people’s lives better and made economies competent. One of the main factors why Globalization has emerged today is because of Global businesses. Global businesses are those businesses which cross borders or does their transactions in two or more countries. These businesses are affected by various factors, and these

are

social,

legal,

political,

technological,

and

economic

(https://www.essaysauce.com/%20business-essays/global-factors-and-strategy/).

Lop

factors sided

development falls under the economic factor. This kind of development is a common economic phenomenon and It affects global businesses in numerous ways. Unevenness in the sectors of an economy and from a geographical standpoint both influences global businesses in their decision making. This inequality shows which sectors are more profitable than the others and in which places are their businesses can be most advantageous (Lipton,1962). This information is crucial for global businesses. This unevenness is a great factor to consider in Global business in terms of decision making. The unevenness itself and the changes that undergoes through it all influences Global businesses.

a. Does it do good for the economy? In what way? Contrary to public belief, uneven development is actually good for both the economy of a country and of global businesses if it is treated right. This is based on the Unbalanced Growth 4

Theory proposed by Hirschman, Rostow, Fleming and Singer.

According to H.W. Singer,

“Unbalanced growth is a better development strategy to concentrate available resources on types of investment, which help to make the economic system more elastic, more capable of expansion under the stimulus of expanded market and expanding demand” (Unbalanced Growth Theory: Explanation, Process and Priorities (economicsdiscussion.net)). It is of common knowledge that resources are scarce, especially in developing countries. The Unbalanced Growth Theory is the key for these resources to be used in the most efficient way. Investors and Global businesses could also take advantage of the unevenness and earn efficiently and effectively. Due to lop sided developments, economic leaders can actually focus on the growth of some key sectors of the economy. Lop sided development could also generate externalities. Hirschman further explained that the growth of industry A leads to or stimulates the growth of industry B and C and so on (Theory of Unbalanced Growth (weebly.com)). Industries being interrelated in the economy, what happens in one, always has effects on the other. This is the nature of an economy. Not only does uneven development benefits one or two industries, but it actually has a domino effect on the other industries as well. Hirschman also added that growth of output of industry A may generate the demand for the products of B and C and also may reduce the marginal cost of production in these industries (Theory of Unbalanced Growth (weebly.com)). The lop sided developments of a country could also create complementaries as added by Hirschman. For example, if the people having the capability to influence an economy and focus on one particular industry like tourism, it will also lead the growth to surrounding industries both directly and indirectly related to tourism.

Recommendations/ Insights As superb how advantageous lop sided development maybe, it also has its downfalls. The Unbalanced Growth Theory will only work if it is done right. Economic leaders should also not force their economies to be unbalanced. Both balanced and unbalanced economies have pros and cons. However, lop sided developments of developing countries are therefore not 5

hindrances. Economic leaders of these countries can either use the unevenness in their favor, or do what they must and rebalance their economies. Unbalanced Growth Theory: Explanation, Process and Priorities. Economics Discussion. (2015, August 11). https://www.economicsdiscussion.net/economic-development/unbalancedgrowth-theory-explanation-process-and-priorities/4630.

Christophers, B. (2009). International Encyclopedia of Human Geography: Chapter. Uneven Development. Elsevier.

Fernando, J. (2021, May 17). Globalization. Investopedia. https://www.investopedia.com /terms/g/globalization.asp

Essay Sauce, Global factors and strategy. Available from: [Accessed 19-07-21].

Lipton, M. (1962). Balanced and Unbalanced Growth in Underdeveloped Countries. The Economic Journal, 72(287), 641-657. doi:10.2307/2228442

P. (2015, August 11). Unbalanced Growth Theory: Explanation, Process and Priorities . Economics Discussion. https://www.economicsdiscussion.net/economic-development/unbalancedgrowth-theory-explanation-process-and-priorities/4630

Sangha, N., Singh, G., Singh, Y., & Bajaj, S. (2021). Theory of Unbalanced Growth . https://acaneretuedutr.weebly.com/uploads/9/0/1/5/9015786/theory_of_unbalanced_ growth.pdf#:~:text=Merit%20of%20The%20Theory%20of%20Unbalanced%20Growth %20%EF%82%97,The%20theory%20considers%20all%20aspects%20of%20growth %20planning. 6

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