Economics Development: Assignment 4 Analysis and Strategies

This economics assignment explores key concepts in development economics, addressing critical issues faced by developing countries. The assignment begins by examining the limitations of traditional agricultural systems in the modern global economy, highlighting their inability to compete and contribute to GDP. It then delves into the importance of land reform as a precondition for equitable rural development, emphasizing its role in resource allocation and attracting investment. The concept of comprehensive or integrated rural development is defined, contrasting it with urban development and emphasizing the need for technological innovation and resource management. The Heckscher-Ohlin model is described, explaining its role in international trade based on comparative advantage and factor endowments. Finally, the assignment analyzes the relationship between inward-looking strategies and debt crises, arguing that such strategies can help minimize reliance on imports and manage financial obligations. The assignment covers essential topics, providing a comprehensive understanding of economic development challenges and strategies.

Running head: Economics Development
Economics Development
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Table of contents
Question 1: Why is maintaining the traditional agricultural system not a viable option for most
developing countries........................................................................................................................3
Question 2: Why might land reform be a precondition to equitable rural development?...............3
Question3: What is comprehensive or integrated, rural development?...........................................4
Question 4: Describe how the Hecksher-Ohlin model....................................................................5
Question 5: Relationship between the inward looking strategies and debt crisis............................5
Reference list...................................................................................................................................7

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Question 1: Why is maintaining the traditional agricultural system not a viable option for
most developing countries
In most of the developing nations, traditional agriculture system is mostly outdated in
nature. Maintaining the outdated agriculture system in the modern world of the business will not
be viable in the sense that through the inclusion of modern tools and technologies will not
increase the production ability of the traditional sector because of the demand of the agricultural
products in the developed nations is highly inelastic in nature (Benería et al.2015). Apart from
this, due to the existence of the intermediary in the economy, the condition in the traditional
sector is becoming worse. The farmers are not getting the desired level of prices for their
agricultural products and the economies who are selling the agricultural items to other countries
as part of trade is getting affected by low price that is in turn having an effect on the terms of
trade. This is one of the important aspect in the sense that most of traditional products are not
being able to compete with the modern goods and services and they are not being able to
contribute to the GDP of the country. Through the development of traditional agriculture sector,
these economies are unable to use modern tools and a technology that is in turn is having effect
on the resource distribution. Most of the developed nations looks in increasing the resource
utilization and is looking mainly for the development of service sectors. Countries like UK,
Australia are using software and technology business that is helping in the development of
international trade. Another reason for the lack of development in the traditional or agro-based
sectors is using labor intensive production functions.

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Question 2: Why might land reform be a precondition to equitable rural development?
Development of land reform in the rural area is going to highlight the incorporation of the
policies that will allow the reformers to increase the valuation and the judgment. Through the
innovations in the technologies that has been used, land reform will bring the development in
every sphere of the rural life. Through the innovation in the reform, process will definitely
increase the participation of both reformers and investors (Economics Discussion, 2015). In the
rural area, the successful land reform will bring projects and due to sublime condition or the
policy framing will be definitely inviting the investors from outside to come an invest in the
economy (Economics Discussion, 2015). Through the development of any kind of reform will
ignite the development and allocation of resources. It is important for the reformers to maintain
the harmony and will be allowing them to think the goals and objectives in the long-run in an
effective and innovative way. This will bring the information of business into the economy and
will be aiming to achieve the objectives in a developed way. Through the development of the
land reform most of the villages aims in fighting with the poverty. However, it has been seen that
only 18% of the programme is being accomplished due to inadequate technical capacity and
budgetary support of implementing agencies, lengthy legal disputes regarding coverage and land
transfers (Openknowledge.worldbank.org, 2019).
Question3: What is comprehensive or integrated, rural development?
Comprehensive rural development will be aiming to indulge the development of better
aspects that will bring the involvement of better innovations in the technologies and the process
of the productions that will be used. Through the development of better and effective level of the
incorporation of the policies will be bringing the best out of every model that will allow the rural
countries to bring the effectiveness of the policies (Kanev and Terziev, 2017). The

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comprehensive way of rural development will be automatically aligning the development
according to the urban structure. Through the incorporation of better development of the
resources, mitigating factor will be keener for the development of the technologies that will be
making way of development (Kanev and Terziev, 2017). The comprehensive way of rural
development will look into the opportunities of economic development by identifying the costs
and benefits that the economy is demanding. On the other hand, in order to increase the resource
channelization the integrated models are being used so that the best technologies can be used.
Integrated rural model will be to help the economy in identifying the development of the
economy. In order to incline the development of business in innovative way will be aligning the
long run objectives that will bring the innovations in the technologies.
Question 4: Describe how the Hecksher-Ohlin model
Hecksher-Ohlin model indulge the development of the international trade based on the
comparative advantage. The development of better innovations in the model and the model
claims that the country that is having high comparative advantage will be looking to indulge the
development of better incorporation of the better resource distribution among both the human
and capital resources. This will definitely allow the incorporation of the opportunity costs that
will be developing the business. In order to increase the efficiency of the resource distribution
will be bringing in more innovations in the form of better development of the resources. Through
the incorporation of better innovation in the business will definitely increase the resource
utilization.
Through the Hecksher-Olin model will be looking to increase the development of the
comparative advantage through the development of sector specific development. Factor supplies
in the form of land and resource capital that will allow sectors to increase the specific sectors to

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deal with the smooth trading. The major important assumptions that are lying within the HO
model is the existence of perfect competition and two countries are participating in the trade
using two goods that are made using two factors. The second assumption of the HO model is the
factor endowment is fixed in the whole economy.
Figure 1: Assumptions in the HO model
(Source: Thirlwall and Pacheco-López, 2017)
Question 5: Relationship between the inward looking strategies and debt crisis
This is an important concept in the sense that inward looking strategies will be crucial in
handling the debt crisis. It is important for the estimation of better product manufacturing and the
economy will not have to depend entirely on the outer countries for the import of technologies
and raw materials. Economy like Canada will be highly benefited from this strategy as they are
in a developing stage that is hindering them in making a participation in the international trade.
Through the incorporation of better development, the inward strategies will be helpful in debt
crisis as this actually minimizes the expenditure of the money through imports and the economy
will be able to pay the money to the world bank or any other financial institutions from which the
loans has been taken (Miletzki and Broten, 2017). It is highly important for the economy to focus
more on the development of the resources that will automatically increase the resource
utilization. Through the incorporation of the inward looking strategies, it will be easy for them to

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identify the development of building raw materials that will automatically indulge the economy
in improving the implementation of better implementation of better accessibility of both human
and capital resources.

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Reference list
Benería, L., Berik, G. and Floro, M., 2015. Gender, development and globalization: Economics
as if all people mattered. Routledge.
Economics Discussion. (2015). Heckscher-Ohlin's Theory of International Trade. [online]
Available at: http://www.economicsdiscussion.net/heckscher-ohlins-theory/heckscher-ohlins-
theory-of-international-trade/10697 [Accessed 4 Apr. 2019].
Economics Discussion. (2015). Mundell-Fleming Model: Meaning and Main Message (With
Diagram). [online] Available at: http://www.economicsdiscussion.net/open-economy/aggregate-
demand/mundell-fleming-model-meaning-and-main-message-with-diagram/15836 [Accessed 4
Apr. 2019].
Kanev, D. and Terziev, V., 2017. Behavioral economics: development, condition and
perspectives.
Miletzki, J. and Broten, N., 2017. Development as freedom. Macat Library.
Openknowledge.worldbank.org. (2019). [online] Available at:
https://openknowledge.worldbank.org/bitstream/handle/10986/18545/495030ESW0WHIT1Final
Report1FULLTEXT.pdf?sequence=1&isAllowed=y [Accessed 5 Apr. 2019].
Thirlwall, A.P. and Pacheco-López, P., 2017. Economics of development: theory and evidence.
Palgrave.
Van den Berg, H., 2016. Economic growth and development. World Scientific Publishing
Company.