Underdevelopment

Economists and sociologists have studied economic inequality between countries, trying to understand the causes of underdevelopment. Some see it as a type of historical setback that can be overcome by passing through certain stages as developed countries have already done. Others see it as a situation characterized by a dualism that paralyzes society; the dominion of a privileged minority and the submission of a poor majority that lives in traditional conditions, and the economy; an archaic agriculture that coexists with a modern economy geared toward the exterior. Third parties make underdevelopment a situation of misery and blockage, a product of the development of rich countries, leaving underdeveloped countries dominated, plundered, and corrupted by their colonizers.

Characteristics of Underdevelopment

Even though there are marked differences between countries, this diversity of ideas obliges one to describe underdevelopment. One fundamental characteristic is rapid demographic growth, a situation caused by immersion in the first (reduction of rate [Page 1634]of mortality) and in the second (reduction of rate of natality) phases of demographic transition, bleak life expectancy, and a particularly young social makeup; correspondingly suffering from nutritional and medical deficiencies, illiteracy, underemployment, and low living standards.

Another trait of these countries is the dominance of the primary sector, with a mediocre industry yielding low outputs and a confined tertiary sector, which as a whole cannot absorb the surplus of farm labor. Depending on the North/South exportation of a few raw materials, they also have a trade debt. Their savings are insufficient with the added inconvenience that capital should be used on services for an increasing population. To develop, they must take on a large external debt that converts the rate of demographic growth into the contrary of that of the gross domestic product (GDP). In this framework, transportation is insufficient, regional differences are clearly pronounced, and industrial regions are lacking, which furthermore concentrate on the coast just as the sprawling and anarchic housing development.

The phenomenon of underdevelopment has been named many ways by international organizations according to changing theories or expectancy of reaching development. While in 1949, the U.S. president Harry Truman (1884–1972) assigned his country the mission to favor “the improvement of living conditions and economic growth in underdeveloped regions,” the French economist and sociologist Alfred Sauvy (1898–1990) termed poor countries as Third World in 1952, in clear reference to the Third Estate of the French Revolution (1789). As development theory rhythms were changing, this term evolved: during the 1960s, the term least developed countries (LCD) emerged, as did the terms developing countries (contrasting the North/South and the center/periphery, especially in the 1970s, the Fourth World in the 1980s, and in the 1990s, prior to development, some countries are called emerging markets.

The question arises of how to measure if a country is underdeveloped. It is often considered that a low GDP per capita (GDP/pc) is a symptom of underdevelopment. In 2005, the World Bank distinguished three country groups by income: a first division gathered countries with an average income of less than $875; a second division separated into two groups with an mid-range income, and GDP/pc of $876 to $10,725; and a third division of countries with a GDP/pc of more than $10,725. Countries are considered underdeveloped when their income is less than $875 and some in the middle subgroup up to $3,466. However, this indicator has its defects, because it does not show how the average income is distributed, and the U.S. dollar does not have the same value in a rich country as it does in a poor one.

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