Different tools, such as gross domestic product (GDP), are used to measure economic aspects of different countries, which are separated into three categories:
Often, countries in the same category are located close to each other in the northern or southern hemisphere. One reason for this is their shared history and colonial heritage. Countries that became rich during this time still have a lot of wealth today: they are called developed countries. Countries that struggled to develop their economies in the 19th and 20th centuries are still struggling today and are known as developing countries.
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The vast majority of developed countries are located in the northern hemisphere. Most of them are in Europe and North America, although Australia and Japan are also considered developed countries. These countries industrialized during the 19th and 20th centuries and are now major producers of goods and services. They have a lot of capital in the form of material and financial resources, which allows them to create more wealth.
Another factor favouring their economy is the presence of a large concentration of high-tech industries such as IT and aeronautics. By innovating and producing high-value goods and services, these industries create wealth for the country.
High-tech industries include IT, research, pharmaceuticals and aerospace industries.
Most people who live in developed countries enjoy a high standard of living. Goods and services, such as schools and hospitals, are easily accessible. In industrialized countries, people generally have better access to government-funded social benefits, especially in health care and education. However, social inequality can still exist in these countries.
Germany is one of the most populated countries in Europe. More than three quarters of its population (77.5%) live in urban areas.
Germany experienced a major period of industrialization in the 19th and 20th centuries, making it a major European power. Based on purchasing power parity (PPP), where all currencies are valued at the same rate, Germany has the fifth largest economy in the world and the largest in Europe.
Germany has a highly skilled workforce. Its steel, automotive and chemical industries are some of the largest in the world and are technologically advanced.
The German people have access to many social benefits provided by the government. These benefits include wages, unemployment assistance and access to health care and optometry.
Purchasing power parity is a way of converting the different currencies around the world into a common currency to compare the purchasing power of each currency.
In recent decades, a new category of countries has appeared: emerging countries. These countries are currently in the process of industrializing. They are characterized by their high economic growth and their export of industrial products. The exploitation and export of natural resources is another important part of their economy.
The rapid industrialization of emerging countries allows them to reduce the economic gap between themselves and developed countries. Their economies sometimes even compete with developed countries’ economies. As a result, emerging countries are changing the global economic order.
However, these countries’ development leads to major social inequalities. Some regions remain highly underdeveloped, and the distribution of wealth among the population is highly uneven.
Because these countries’ economies change over time, it is difficult to establish a definitive list of emerging countries. There is often talk about the BRICS: an acronym for the emerging countries of Brazil, Russia, India, China and South Africa. Between them, these countries account for nearly half of the world’s population and almost a quarter of the global economy. Countries such as Colombia, Peru, the Philippines, Indonesia and Sri Lanka also have strong economic potential, so they are also considered emerging countries.
India is one of the most populated countries in the world. Just over a third of its population lives in urban areas (34.9%).
India’s economy is diverse. Almost half of India’s labour force works in traditional or modern agriculture. Other major parts of the economy are manufacturing and services, especially information technology services. India has had a high rate of economic growth of around 7% for almost 20 years. By comparison, the GDP growth rate of the United States, one of the world’s largest economies, has been between 1.55% and 2.93% since 2010.
India’s urban areas are more developed than its rural areas. The hospital network in urban areas is extensive thanks to various government initiatives. However, people living in rural areas may struggle to have access to healthcare services and sometimes have to travel long distances to get the care they need.
India is considered an emerging country because of its strong economic growth over the past several years. However, major inequalities exist among its people. Some people reap the benefits of economic growth, while the rest remain in poverty. For more details, see the summary table.
The majority of developing countries are located in the southern hemisphere. Because these countries are not very industrialized, their economies are mainly based on exploiting and exporting natural resources. It is mainly foreign companies based in developed or emerging countries that exploit their raw materials. The raw materials are sent directly abroad for processing. This creates little wealth for developing countries, who are largely dependent on the economies of developed and emerging countries.
A low gross domestic product (GDP) per capita means a low level of wealth, which greatly limits a country’s development. As a result, the majority of the country’s population is unable to access goods and services, such as schools and hospitals. They usually have jobs related to the exploitation of natural resources. The agricultural sector is also very active, but provides little benefit to the local population since the goods produced are mainly destined to be exported. Another factor to consider is the high level of debt in these countries. Their debt makes it difficult to obtain loans to finance their economic development.
Gross domestic product (GDP) is used to calculate a country’s wealth by measuring the total value of all goods and services produced within that country over a given period, usually 1 year.
The birth rate in developing countries is generally higher than in other countries, and the average age of their population is lower than in developed countries. See the concept sheet about Demographic Changes for more information on this topic. In many cases, democratic institutions are not well established or the country is run by a totalitarian government where civil rights are not always respected.
An institution is an organization governed by rules and laws that plays a specific role in society. This role may be political, social, economic, religious, etc.
Yemen is one of the poorest countries in the world. Its population has great difficulty feeding itself. Access to health care varies from one region to another, but is generally limited.
For several years, despite its poverty, the country enjoyed relative political stability under a democratic regime. The country’s economy was partly based on the exploitation and export of oil. The majority of the population still works in agriculture and livestock.
In recent years, violent armed conflicts have led to political instability and difficult living conditions. Since then, Yemen has experienced numerous financial problems, several transport and communication infrastructures have been destroyed and the country is struggling to feed its people. As a result, Yemen’s social and economic development has taken several steps backward.
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The Human Development Index (HDI) is a socioeconomic indicator that determines the average quality of life of a country’s population by measuring life expectancy, level of education (access to education) and economic output (GDP per capita). The HDI is presented on a scale of 0 to 1. The closer the index is to 1, the higher the quality of life. For example, Canada’s HDI in 2014 was 0.91, while Ghana’s was 0.58.
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The Gini index, or Gini coefficient, measures income inequality among a country’s population. It is calculated on a scale of 0 to 100. At 0, all incomes within the country are equal. The closer the index is to 100, the greater the income inequality.
|
|
Germany |
India |
Yemen |
|---|---|---|---|
|
Human Development Index (HDI) |
0.936 |
0.640 |
0.452 |
| Germany | India | Yemen | |
|---|---|---|---|
| GDP per capita (2017 estimate) | $50,800 | $7,200 | $2,500 |
| Gini Index | 31.7 | 35.1 | 36.7 |
| Percentage of the population living in poverty | 16.7% (2015 estimate) | 21.9% (2011 estimate) | 54% (2014 estimate) |
| Percentage of the population with access to electricity | 100% |
|
|
| Percentage of the population with Internet access | 89.6% (2016) | 29.5% (2016) | 24.6% (2016) |
| Breakdown of the workforce by sector of activity |
|
|
No specific data. The majority of the population works in the agricultural or livestock sectors. Services and industry account for less than a quarter of the workforce. |
|
|
Germany |
India |
Yemen |
|---|---|---|---|
|
Life expectancy at birth |
81.1 years |
69.7 years |
66.9 years |
|
Mortality rate at birth |
3.3/1000 births (2020) |
35.4/1000 births (2020) |
41.9/1000 births (2020) |
|
Government spending on health care (% of GDP) |
11.1% (2016) |
3.7% (2016) |
5.6% (2015) |
|
Number of doctors per 1000 inhabitants |
4.21 (2016) |
0.78 (2017) |
0.31 (2014) |
|
Percentage of the population with access to sanitation facilities |
99.2% (2015) |
39.6% (2015) |
53.3% (2012) |
|
Level of risk from serious infectious diseases |
- |
Very high |
High |
|
Percentage of the population with access to safe drinking water |
100% |
|
|
|
|
Germany |
India |
Yemen |
|---|---|---|---|
|
Literacy rate (percentage of population over 15 years old who can read and write) |
99% (2003) |
(2018) |
(2015) |
|
Average number of years of education |
17 |
12 |
9 |
|
Government spending on education (% of GDP) |
4.8% (2016) |
3.8% (2013) |
- |
Developing and emerging countries are largely dependent on the economies of developed countries, especially for their exports.
Several initiatives are underway to change this situation. Developing and emerging countries are establishing economic treaties to increase trade between themselves and thereby increase their wealth without relying on developed countries.
The Group of 77 (G77) is a group of developing countries seeking to promote greater cooperation between so-called countries of the South, mainly developing countries. The group has 134 member countries, including China.
The Southern Common Market (MERCOSUR) has five permanent members: Argentina, Brazil, Paraguay, Uruguay and Venezuela, which was suspended for failing to comply with the rules of the agreement. Associate countries include Bolivia, Chile, Colombia, Ecuador, Guyana, Peru and Suriname. The goal of this agreement is to establish a common market between the South American countries.
Why does fair trade exist? To ensure that profits from international trade are distributed more equitably.
Developed countries benefit more from trade than developing countries. Large companies, most of which are based in developed countries, look for ways to reduce their production costs as much as possible to increase their profits. To do this, they buy raw materials at the lowest possible price, without taking their real production cost into account. This quest for the lowest possible price leads to injustices, especially in developing countries:
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Very poorly paid workers
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Poor working conditions
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Producers make very little profit, which means fewer opportunities for development
The origins of fair trade go back over 60 years and its objectives include:
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Creating business partnerships between producers in developing countries and distributors in developed countries to open new markets
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Paying a fair price for the products
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Protecting workers’ economic and social rights
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Contributing to sustainable development
Fair Trade is designed to create better economic and social conditions for producers and consumers. Consumers can rest assured that fair trade certified goods were produced in a way that respects producers’ rights.
Organizations such as Fairtrade and the World Fair Trade Organization (WFTO) help promote and coordinate the fair trade movement around the world. Fair trade certified products bear these organizations’ logos.
The Manduvirá Cooperative was founded in 1975 to facilitate access to credit for small-scale producers in the Arroyos y Esteros region of Paraguay. It now has over 1000 members and exports fair trade certified organic sugar to over 30 countries.
The Cooperative offers several services to its members such as access to loans at reasonable rates and support to increase the productivity of their organic farms.
To find out more about this Cooperative: Cooperative Manduvira Ltda.
Giguère Groulx, Jean-Félix and Marie-Hélène Laverdière. Immédiat. Richesse, 2017, p.16-17.
Ladouceur, Maude and Alain Parent. Globe. Cahier d’apprentissage, 2014, p.157-160.
Monot, Alexandra and collabs. Atlas géopolitique. Les enjeux du monde contemporain, 2017, p. 111-115.