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Factor Affects To The Low Income Country Has The Greatest Impact Of Economic Growth Term Paper

Low Income Countries Economic status of North Korea

A less developed country is that country with a Gross Domestic Product (GDP) of less than 2% of global trade in goods relative to other countries. Less developed countries are known for less industrialization and more often than not a high dependence on foreign aid. These countries are grouped as the poorest and weakest market economies and consist of more than 880 million people. They rely heavily on exports of agricultural products whose prices keep on fluctuating fetching low price in the international market while they import most of the industrial and manufactured goods from developed countries a reason for continued balance of payment deficits, resulting into high debt burdens which have kept them as beggars' in the international community thus a continuous vicious cycle of poverty (UN-OHRLLS, 2011).

Less developed countries are also characterized by low level of socio-economic development with weak human and institutional capacities, low income disparities and inequalities and more often than not suffer from bad governance, political instabilities, internal and external conflicts. To name just but a few, the less developed countries include; Angola, Madagascar, Malawi, Togo, Cambodia, Bangladesh, Yemen, Solomon Islands, and Haiti.

The economic position of a nation is extensively determined by the way the natural resources are utilized as well as the utilizing the skills as well as the human resources that the nation has within it populace. The extent to which these two are utilized will greatly influence the trend of the economy of that particular country. Even though the economy of a nation are exhibited through the tangible objects like factories, infrastructure, businesses, homesteads, hotels, theaters, books, clothing, highways among many others, Adam Smith stated that the abilities and skills...

This indicates that even if the other physical items are taken away from the nation by wars or natural disasters, they can still use the skills and rebuild their country back to its feet. This has been the strength that many countries, ravaged by war and strife over an along period of time, have tapped into in order to revive their economies back to competitive levels as is the case with Rwanda that saw destruction by war in 1990s and now it is on its revival path to economic stability among the underdeveloped nations.
North Korea is considered to be among the poor nations or the underdeveloped nations in Asia. It is recorded to have a GDP of $40 billion by the year 2010 hence still considered a poor nation in terms of economic stability (Index Mundi, 2011).

In most developed economies, the market structures are know to be open and will minimal regulations that are protective in nature and can deter outside investors from venturing into the country. However, on the other hand the market structure in North Korea is such that the government has a tight control over the operations of the market and the market is surrounded with a heavy cloud of secrecy particularly at the policy making levels and the local market and investment levels. This makes it hard for potential investors to access data and if any is accessed then it is unreliable. This difficulty in venturing into this market is further made worse by the unreformed communist rule with a highly centralized control system over everything including the foreign investments; as a matter of fact most investments are government owned. Indeed, it was ranked the least free market in 2011 among the 41 Asia-Pacific countries (The Heritage Foundation, 2011). These are conditions that make it impossible to invest hence remaining behind economically even among the other…

Sources used in this document:
References

Bloomberg News, (2010). China's North Korea Ties Risk Angering Trade Partners. Retrieved December 15, 2013 from http://www.businessweek.com/news/2010-11-29/china-s-north-korea-ties-risk-angering-trade-partners.html

Jane's Information Group, (2009). Natural resources (Korea, North), Natural resources.

Retrieved December 15, 2013 from http://articles.janes.com/articles/Janes-Sentinel-Security-Assessment-China-And-Northeast-Asia/Natural-resources-Korea-North.html

The Heritage Foundation, (2011). North Korea. Retrieved December 15, 2013 from http://www.heritage.org/index/country/northkorea
Travel Documents Systems, (2011). North Korea: Government. Retrieved December 15, 2013 from http://www.traveldocs.com/kp/govern.htm
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