Economic can save and use it for future purpose.

Economic
development works in many countries and part of the world but it is important
to understand why is it not showing results in rest of the places, why people
are not climbing the ladder of evolution or why people  are stuck to the low  stages.

 

The main pathways by which the economies grows are listed
below-

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·     
Savings
–  Every household of the economy should
decide to consume a part of their earing and take the rest to the market.  The share invested in the market shall reap
more income. There will a capital accumulation because of the savings which
will increase the productivity of the household.

·     
Trade –  All households should engage themselves in
the process of trading. If you are specialized in a anything, a two way process
can be formed so that the market expands and the increase the efficiency.

·     
Technology
– Change according to the time and accepting the changes which are coming
can increase the efficiency out the work one does and can help in generating
greater results. The results can be multiplies when right technology and
development process is used.

·     
Resource
Boom – Any kind of help is a resource. The government can help the
economies in excelling and controlling.

 

The Gross Domestic Product (GDP) per capita results when all
the four factors work together – 

Increase in the trade and the specialization,

Saving and the accumulation of the capital,

Rise in the level of output by technological advancements,

Greater share of the natural resources per individual.

 

Reasons for the lower household incomes in the poor nations-

 

·     
Insufficiency
of savings –  sometimes the families
or the individual do  not produce or work
up to a level where they can save and use it for future purpose.  They spend or utilize everything what they
have as they earn very limited amount.

·     
Absence
of Trade – There are times when people hear about an opportunity but do not
have access to it due to poor connectivity like shipment or road  problems or violence. Sometimes the authority
looking after the trade practices control the price which makes trade
impossible or there are interventions from the government side also.

·     
Limited
Knowledge- People in the poor nations don’t have proper access to the
education. They are not aware about the trends which are prevailing the
economy. They are technically backward. Due to the lack of exposure, the
upcoming generations aren’t efficient to meet the growing standards.

·     
Decline
in the level Natural Resource-  This
also leads to decline of the environment. People use their resources without
thinking of there importance. Even developed nations try to take advantage
of  the poor nations. Usage of resources
for not generating profit results in low level of income and poor living
standards.

·     
Growth of
the Population – things remain unchanged from generation to generation and
the size of the population just increases. Families don’t have enough money to
survive. The thinking of more shall make more money lands people in hunger and
being underdeveloped.  With the size of
the population increasing and the economy being the same, life in a poor nation
becomes very difficult to live.

·     
Barriers
of the Cultures-  The cultural
difference and the environment is always an obstacle to progression. Every
culture has a different set of beliefs. The values and the norms vary which
undermines the population of the nation. The demographics also affect a lot.

Culture also involves ethics, religious views and social norms.  If they norms are too rigid, they  hold back the development of the nations.

·     
Failures
of the Government –  The government
has to look after various factors like- finance, infrastructure, services
provided to all the people. The should take the steps in making the nation to
grow and people should not be exploited. There should no illegal activities and
everyone is give equal rights.

·     
Geopolitics

·     
Fiscal
Trap – The government has the duty towards the citizens and should provide
them the facilities like health, education, power, roads etc. the government
should look at the taxation policy and see if its feasible according to the
population. The government should clear all its debts with the savings rather
than new investments. This creates a load on the people of the economy.

 

The role of Overseas
Development Agencies in removing poverty

 

Poverty is something which is created by the man and can be
eliminated or decreased by the efforts. When a nation overcomes the problem of
charity, it does not implicate the action of charity but the justice which the
economy achieved.