Underdeveloped and developing countries are called third world countries because of their lack of basic development although originally countries that did not make allies with either the USA or the Soviet Union were called third world countries.
In most cases, these countries are underdeveloped and lack a self-sustaining economy. However, these countries are rich in natural resources and they can be utilized to create a booming economy as evidenced by India which has made itself one of the most rapidly growing economies in the world.
There are a plethora of economic issues that these developing countries face and most of them are economically dependent upon another country. Brain Drain, corruption, lack of jobs, political instability, outside interference, imperialism, colonization, foreign political investment, etc. are some of the major problems that affect a nation and its economic growth.
Traditional businesses and a lack of progressive feelings among people are what pull a country’s economy backward rather than forwards. A trait seen in almost all developing countries with backward economies is political instability and corruption.
According to a report by Transparency International almost $800 million was lost due to corruption in Palestine due to tax evasion.
Corruption affects the least wealthy the most, poorer people are more affected by corruption. Similarly reports from the same source show that 84% of households in Bangladesh had been victims of institutionalized corruption in 2010.
Regarding turning around the economies of the nations, there are a few ways in which a prosperous economy can be achieved by the third world or developing countries.
Here are five ways in which countries can develop their economies and further their financial prosperity.
Ways In Which Third World Countries Can Develop Their Economy
Proper Utilization Of Natural And Human Resources
While most developing countries lack financial prowess and political influence in the world, they have natural resources in abundance. It is not a lack of resources that is the problem but the way in which it is utilized. For example, diamonds are some of the most expensive resources in the world and Sierra Leone had huge reserves of diamonds all over the country.
However, a lack of competence by the government to properly utilize and distribute the diamonds led to a revolt and a military coup d'état. The conflict ensued for 10 years, 9 months, 3 weeks and 5 days and had anywhere between 50,000 to 300,000 deaths. Along with the human and natural losses the conflict put the country into economic turmoil.
A country needs physical infrastructures like roads, machinery, industries, etc. for its economy. While the short term initial investment in physical infrastructures may be high, the long term return from these infrastructures will be high.
If a country invests in developing its sea routes and land trade routes the cost of moving goods from one place to another is reduced which will inter help the transport and industrial economy.
The developmental activities of a country should be focused in the long term rather than the short term. Developmental activities should be sustainable and should not be a harmful factor for the environment.
Destroying entire forests to create a roadway will have a negative effect on the economy as well as the environment. By negatively affecting the natural resources third world countries will lose their economic strongpoint.
Maintaining Transparency In The Government
Developing countries have a small capital, to begin with, and with the corrupt officials in the high government posts, they lose out on most of the money that was to be invested into the development of the country.
When citizens have to pay money to get the tasks done that they as citizens of the country have a basic right to get.
Technology & Law
As the whole world has moved into the digital age, developing countries must also integrate technology into their developments. As technology becomes a part of all developed nations, third world countries also have to gradually incorporate tech into developing countries.
Similarly, unnecessary and unclear laws also cost a substantial amount to implement and maintain for the government. Millions of dollars every year are poured into implementing laws that may not be necessary for their country.