Economic Development of Third World Countries

Running head: ECONOMICS
Economics
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ECONOMICS
Economic development of third world countries
Introduction
The economic development is termed as the economic growth which is accompanied
by the changes in output distribution along with the economic structure. The third world
countries are known as those countries which are typically poor with underdeveloped
economies. In these countries poor infrastructure, low level of education, limited access to
health along with improper sanitation (Dixon, 2015). The term “third world” is used for
describing a developing nation. These countries are mostly characterized by low standard of
living and poverty.
The third world countries are mostly underdeveloped in nature which are mainly because-
Lack of capital formation: It have been found out that many developing countries lack
capital formation which is termed as the main obstacle of development. For this reason, the
nation will not be able to achieve economic progress when the rate of capital accumulation
will be low.
Poor strength of currency: The currency strength is referred to the relationship between the
currency of nation and the US dollar (Rodwin & Sazanami, 2017). The currency of
developing countries are usually very weak in nature and therefore when these countries will
rely on the imported raw materials rom the rich nation, it will find it expensive on the global
market.
Economic system: The third world nations will not be able to raise the necessary resources
either with the help of foreign trade or colonial exploitation. The economic system of these
countries are quite poor in nature where they can follow capitalist path of development that
will need an efficient market system.