What does it mean for a country to be

‘developed’ ?

Is economic growth the sole measure of a

nation’s progress, or are there other factors
we should consider?
 Comparing Countries Development
(GDP and other indicators)
Presented by Group 2 (Batch 2) :-

Avala Chaitanya Aviral Ayush Ranjan Aman Bawane Sri Sai Anurag Yashwanth Boda
22114016 Vishwakarma 22114018 22114020 22114021 22114022
22114017
Why is it even important to compare
countries’ development ?
1. Understanding Global Disparities :
Comparing countries' development allows us to gain a deep understanding of the vast
disparities that exist across the world. This knowledge is crucial for addressing issues of
global inequality, poverty, and social justice. It helps us identify areas in need of improvement
and provides a foundation for international cooperation.
2. Policy and Resource Allocation :
For policymakers, comparing development indicators is essential for making informed
decisions about resource allocation. It helps governments and organizations target areas that
need the most attention, whether it's in education, healthcare, infrastructure, or economic
development.
3. Identifying Best Practices :
Comparative analysis helps us identify best practices. When one country excels in a particular
area, such as education or healthcare, it provides a model for others to learn from and adapt
to their own contexts.
4. Economic and Investment Decisions :
For businesses and investors, understanding the development level of a country is crucial for
making economic and investment decisions. It guides choices about where to invest, expand,
or establish partnerships.
5. Human Well-Being and Quality of life :
At its core, comparing development is about improving human well-being and enhancing the
quality of life for individuals around the world. It's about ensuring that people have access to
basic needs, opportunities, and the chance to lead fulfilling lives.
What are the main indicators of development ?
1. Gross Domestic Product (GDP)
2. Gross National Income (GNI)
3. Gender Inclusivity
4. Education and Development
5. Health and Development
6. Birth and Death Rate
7. Employment and Labour Force
8. Human Development Index (HDI)
9. Income Inequality and Poverty
Gross Domestic Product (GDP)
 In simple words, GDP is the total market value of a country’s output.

 By definition, it is the market value of all final goods and services produced within a given
period of time by factors of production located within political boundaries of nation.

 Some important points to note in the definition of GDP are:

• In estimating GDP, the income earned by the foreigners in the country are included
and the income earned by residents abroad and remitted to the home country are
excluded.
• The value of intermediate goods is not counted in GDP.
• GDP does not count transactions in which money or goods changes hands but in
which no new goods and services are produced.
 There are many methods to calculate GDP like income method, expenditure method and
production method. Out of these, the expenditure method is most commonly used and its
formula is:
GDP = C + I + G + NX
where, C = Consumption expenditure
I = Gross Private Domestic Investment
G = Government Expenditure
NX = Net Exports = Exports – Imports

 GDP per capita is the GDP of a country divided by its population.

 GDP per capita measures a country’s economic output per person. It is often considered
an indicator of a country’s standard of living; however this is inaccurate because GDP per
capita is not a measure of personal income.
Gross National Income (GNI)
 The gross national income (GNI), previously known as gross national product (GNP) is
an estimate of the total value of all the final products and services turned out in a given
period by the means of production owned by a country's residents.

 GNI is calculated using the following formula:

GNI = GDP + Net Factor Income from Abroad (NFIA)

Where, NFIA includes the earnings that residents of a country receive from their investments,
employment, or business activities in foreign countries, minus similar earnings that foreigners
receive within the country's borders.

 While GDP measures the market value of all final goods and services produced in a
given country, GNI measures income generated by the country's citizens, regardless
of the geographic location of the income.

 It is used to measure and track a nation's wealth from year to year.

Gross National Income (GNI) per
capita is gross national income
divided by midyear population.

GNI per capita is a key indicator of

a country’s economic growth and
development. It provides a more
accurate picture of how the
economy is doing for the typical
citizen by accounting for population Figure: A world map showing gross national income per capita in 2021, based on data
size and wealth distribution. from the World Bank

In 2022, GNI of India was 3.37 trillion USD ranked at 5th and GNI per capita of
2380 USD ranked at 147th in the world. Source: World Bank
Gender Inclusivity

 Gender equality is a critical indicator of development and societal progress. It refers to

the equal rights, opportunities, and treatment of individuals, regardless of their gender.

 Promoting gender equality leads to inclusive and sustainable development and fosters
social cohesion and economic growth.

 Why Gender Equality Matters in Development:

• Social Justice: Gender equality is a fundamental human right. It is essential for ensuring
fairness and justice in any society.

• Economic Growth: Countries with gender-equal policies tend to experience higher

economic growth rates and increased productivity and innovation.

• Social Stability: It contributes to social stability and harmony. When all individuals have
equal rights and opportunities, it can lead to more cohesive and peaceful societies.
 Gender Development
Index (GDI)
 The Gender Development
Index (GDI) is an index designed
to measure gender equality.

 Values close to 1 indicate higher

gender equality.

 GDI is the ratio of female HDI to

male HDI.

 The GDI measures differences in

male and female achievements in Image Source:
three basic dimensions of human https://images.cnbctv18.com/wp-content/uploads/2023/01/gender-equality-1019x
573.jpg?impolicy=website&width=590&height=264
development: health, education and
command over economic resources.
The health dimension is captured
by life expectancy at birth, female
and male.

 Education is measured using two

indicators— female and male
expected years of schooling for
children and female and male mean
years of schooling for adults ages
25 and older.

Command over economic

resources is measured by female
and male estimated earned income.

Figure: A world map showing Gender Development Index in 2021

In 2021, GDI of India was 0.849. Source: UNDP

The importance of education indicators in evaluating
development

 In comparing countries development, education

indicators are crucial metrics that offer insights
into the overall progress and well-being of a
nation.
 Focusing on literacy rates and school enrollment
provides a nuanced understanding of human
development.
 Education indicators are like measuring tools that
help us understand how well a country is
developing.
Literacy Rate

Literacy rates measure the percentage of the population

that can read and write.

Importance in Comparisons
Comparing literacy rates between countries highlights
disparities in access to quality education and reveals the
effectiveness of literacy programs.

Impact on Human Development

Higher literacy rates are associated with increased
economic productivity.
 School Enrollment
 School enrollment rates indicate the percentage of
eligible children or individuals currently attending
school.

 Gross Enrollment Ratio, is the ratio of people

enrolled in higher education to the population in the
age group of 18-23.

 Importance in Comparisons
Comparing school enrollment rates offers insights into the
accessibility and inclusivity of educational systems across
countries.

 Impact on Human Development

Higher enrollment rates contribute to reduced gender
disparities in education, promoting social equity.
Global Competitiveness
Education indicators contribute to a nation's
global competitiveness.

Importance in Comparisons
Countries with a well-educated workforce
are often more competitive in the global
economy.
Education influences a country's capacity
for innovation and adaptation
technological advancements.

Impact on Human Development

Higher global competitiveness can lead to
increased job opportunities and improved
living standards for the population.
How health is a fundamental aspect of development ?

Economic Growth

Education

Poverty Reduction

Community Well-Being

Resilience
 Health and Development
Health indicators, such as life expectancy and access to healthcare plays main role in
the context of Health and Development.

Life Expectancy

Life expectancy is the average number of years a person is expected to live.

Significance in Development

 Quality of Life:
A higher life expectancy generally indicates a better quality of life and well-being within a
population.

 Productivity:
Longer life expectancy often correlates with a more productive and economically active
population.
Access to Healthcare
Access to healthcare measures how easily people can receive medical services when needed.

 Preventive Care:
Access to healthcare is essential for preventive measures, early detection, and timely treatment of
diseases.

 Productivity and Education:

Healthy individuals are more likely to be productive at work and in society. They can also participate
more fully in educational activities.
 Birth Rate and Death Rate
Birth and death rate stand for the number of births and deaths per 1000 people in a
country in one year respectively.

High Birth Rate and High Death Rate

It indicated low level of development. (example: Nigeria, Congo)

High Birth Rate and Low Death Rate

It characterizes developing nations. These countries typically have a young population

with a high dependency ratio. (example: India, Mexico)

Low Birth Rate and Low Death Rate

These are typically developed nations. (example: US, South Korea)

 Birth Rate and Death Rate
Low Birth Rate and High Death Rate

Some developed countries are experiencing low birth rates along with high death rates
due to an aging population. This can lead to economic problems. (example: Japan)
 Employment
When a significant part of the population is employed it leads to economic growth.

Human Capital Development

A skilled and productive labor force is essential for economic development.

Poverty Reduction
When people have access to decent jobs, they can improve their standard of living and
reduce poverty.

Demographic Dividend
Many developing countries have a youthful population, which can be seen as a
demographic dividend if these young people are well-educated and employed.

Technology
Automation can lead to job displacement in some sectors, it can also create new job
opportunities
Unemployment
Unemployment refers to a situation where a person actively searches for employment at current
wage rate but is unable to find work.

Unemployment Rate
Unemployment rate is the percentage of labour force who are currently unemployed.
HUMAN DEVELOPMENT INDEX(HDI)
 The Human Development Index(HDI) is a composite index that measures and
ranks a country's level of human development.
 COMPONENTS OF HDI
 Health
 Education
 Standard of Living
 HDI is calculated as a normalized average, ranging from 0 (lowest human
development) to 1 (highest human development), by combining the three
components
 HDI offers a broader perspective on human development, moving beyond
economic indicators to consider well-being, quality of life, and development.
 HDI has limitations, such as its inability to capture inequality within a country and
its omission of some factors like environmental sustainability.

 The GII(Gender Inequality Index) assesses gender-based inequalities in health,

empowerment, and the labour market, complementing the HDI.

 Governments and international organizations use HDI data to formulate policies

that focus on areas such as education, healthcare, and poverty reduction.

 Acknowledge challenges and criticisms, such as the limited scope of indicators and
the potential for oversimplification in complex development issues
INCOME INEQUALITY AND POVERTY
 Income inequality refers to the uneven distribution of income among individuals or
households within a society. It signifies disparities in earnings and wealth.

 Why Income Inequality Matters:

• Impact on Economic Growth: High income inequality can hinder overall economic
growth, as it reduces consumer spending and limits opportunities for the lower
income segments.
• Social Implications: Income inequality can lead to social unrest, lower social
cohesion, and decreased trust in institutions.
• Health and Education Disparities: It contributes to disparities in access to
healthcare and education, affecting the well-being of marginalized groups.
• Political Consequences: Income inequality can lead to political polarization and
affect the functioning of democratic systems.

 Common Measures of Income Inequality Gini Coefficient, Lorenz curve etc..

 Global disparities in income distribution are
substantial. Some countries have
significantly higher income inequality than
others.
 Income inequality can vary among regions
within countries and between rural and urban
areas.
 Key Factors Behind Income Inequality:
 Wage disparities ,Education and skill, Gender
and Racial disparities.
 Poverty is a condition characterized by a lack of access to basic necessities, such as
adequate food, shelter, clothing, and healthcare. It often results from insufficient income
or resources to maintain a basic standard of living.
 Why Poverty Matters:
• Humanitarian Concern: Poverty is a pressing humanitarian issue that affects the well-
being and dignity of individuals and communities.
• Economic Impact: Persistent poverty can hinder economic development, as it limits
human capital and productivity.
• Social Consequences: Poverty can lead to social inequalities, crime, and social
exclusion.
• Health and Education: Poverty often correlates with disparities in healthcare and
education access, impacting future opportunities.
 A significant portion of the global population lives below the poverty line, particularly in
developing regions.
 Regional Variations: Poverty rates differ between countries and regions, with sub-
Saharan Africa having some of the highest rates.
 Key Factors Behind Poverty:
• Income Inequality.
• Lack of Access to Education.
• Health Challenges.
Case Study: Comparing G20 Countries On
Above Indicators.
Indicator-1:GDP
• G20 countries collectively represent a substantial
share of the global GDP.
• Notable economies within the G20 include the
United States, China, Japan, and Germany.
• These nations showcase a wide variety of
economic activities, from innovation and services
to manufacturing and agriculture.
• G20 GDP data is critical for monitoring worldwide
economic trends.
• The interdependence of these economies affects
international trade, finance, and development.
• G20 nations play a central role in shaping the
global economic landscape and addressing shared
economic challenges.
 Case Study: Comparing G20 Countries
On Above Indicators.
Indicator-2:Human Development Index • Human Development Index (HDI) is a composite
measure that evaluates the well-being of
populations in G20 countries based on multiple
factors.
• HDI factors include life expectancy, education
(literacy and school enrollment), and per capita
income.
• G20 nations demonstrate varying HDI rankings,
reflecting disparities in living standards and
access to education and healthcare.
• Countries like Norway, Australia, and Germany
often rank high, indicating high levels of human
development.
• In contrast, some G20 countries face challenges
in achieving high HDI scores due to issues such
as inequality, limited access to education, and
healthcare disparities.
• HDI serves as a valuable tool for assessing the
overall quality of life and development in G20
member states.
 Case Study: Comparing G20 Countries On
Above Indicators.
Indicator-3:Birth & Death Rate
• Birth rate, a crucial demographic indicator,
varies significantly among G20 countries.
• G20 members encompass diverse birth
rates, reflecting demographic trends and
cultural factors.
• Many high-income countries in the G20, like
Japan and Germany, experience lower birth
rates, often linked to factors like delayed
marriage and career-focused lifestyles.
• In contrast, some emerging economies in the
G20, such as India and Indonesia, exhibit
higher birth rates due to larger, younger
populations and cultural norms.
• Birth rate impacts population growth, age
distribution, and social policies in G20
nations.
• Understanding these variations is essential
for effective social and economic planning in
Birth Rate these diverse countries.
Case Study: Comparing G20 Countries On
Above Indicators.
• The death rate, a crucial demographic
Indicator-3: Birth and Death Rate indicator, exhibits notable diversity among
G20 countries.
• G20 member states experience varying
death rates due to factors such as
healthcare quality, lifestyle, and
demographic profiles.
• High-income nations like Japan and
Germany tend to have lower death rates,
often associated with advanced healthcare
systems and longer life expectancies.
• Some emerging economies in the G20,
like India and Indonesia, have higher
death rates, partly due to healthcare
accessibility and disease prevalence.
• Death rate statistics impact healthcare
policy, social services, and population
aging concerns in G20 countries.
• Analyzing these disparities aids in
understanding healthcare and
Death Rate demographic challenges in this diverse
group of nations.
 Case Study: Comparing G20 Countries On Above
Indicators.
Indicator-4: Gender Role in Economic
development
• Gender-related participation in the labor force
varies across G20 countries, reflecting
diverse cultural and policy contexts.
• In some G20 nations, like Germany and the
United States, there has been progress in
promoting gender equality, with a significant
proportion of women in the workforce.
• However, in countries like India and Saudi
Arabia, female labor force participation rates
remain comparatively low, influenced by
cultural norms and gender disparities.
• Policies promoting equal opportunities and
work-life balance play a crucial role in
fostering gender balance in the labor market.
• The issue of gender-related participation in
the workforce remains central to addressing
economic disparities and fostering inclusive
growth in G20 economies.
 Case Study: Comparing G20 Countries On
Above Indicators.
Indicator-5:Education Spending
• Education spending in G20 countries differs widely,
reflecting national priorities and resources.
• Several G20 nations, such as the United States
and Germany, allocate substantial budgets for
education, supporting high-quality systems and
research.
• Some emerging economies like China and India
have increased education spending in response to
growing populations and development goals.
• However, issues like inequality and inefficiency
persist, with some G20 countries struggling to
ensure equitable access to quality education.
• Investment in education is crucial for workforce
development, innovation, and social progress, and
G20 nations continue to grapple with balancing
budgets while investing in the future.
• The approach to education spending varies, with
each country adapting to its unique circumstances.
Case Study: Comparing G20 Countries On
Above Indicators.
Indicator-6:Health Spending • Health spending in G20 countries shows
significant variation, reflecting diverse
healthcare systems and priorities.
• G20 nations like the United States and
Germany allocate substantial funds to
healthcare, supporting advanced medical
research and facilities.
• Emerging economies such as China and
India have increased health spending to
address population health needs and expand
healthcare infrastructure.
• However, access and quality disparities
persist, with some G20 countries facing
challenges in providing affordable and
equitable healthcare.
• Investment in health is vital for disease
prevention, healthcare access, and overall
well-being, and G20 members balance
budget concerns with the need for robust
healthcare systems.
• Health spending strategies vary to
accommodate each country's unique
healthcare landscape.
Case Study: Comparing G20 Countries On
Above Indicators.
Indicator-7:Unemployment Rate • The unemployment rate in G20 countries varies
significantly due to economic conditions, labor
market policies, and demographic factors.
• G20 nations like the United States and Germany
tend to maintain lower unemployment rates,
reflecting stable labor markets and job
opportunities.
• Emerging economies like South Africa and India
face higher unemployment rates, influenced by
population growth and job market challenges.
• Structural and cyclical unemployment play a role in
these disparities, with some countries struggling to
match job supply and demand.
• Labor market reforms and training programs are
crucial in addressing unemployment and fostering
economic growth in G20 economies.
• Policymakers focus on reducing unemployment
through strategies tailored to each country's unique
labor market.
Conclusion
Comparing countries based on factors such as birth and death rates,
unemployment rates, HDI (Human Development Index), GDP, and more provides
valuable insights into their overall well-being and development. It allows us to
assess the quality of life, economic stability, and social progress in different
nations.
Birth and death rates reflect population dynamics, indicating the pace of growth
and healthcare standards. Lower death rates and controlled birth rates are
typically associated with higher levels of development. Unemployment rates
showcase a country's labour market health and economic opportunities for its
citizens.
HDI combines indicators like life expectancy, education, and per capita income,
offering a comprehensive view of human development. A higher HDI often
correlates with improved living standards. GDP is a fundamental economic
measure, reflecting a nation's production and consumption capacity.
In conclusion, a holistic assessment of these factors helps us understand how
countries fare in terms of quality of life, economic prosperity, and social well-
being, contributing to informed policy decisions and international cooperation for
a better world.
Reference
• D.N. Dwivedi, ‘ Macroeconomics : Theory and Policy ’, Third Edition, Tata McGraw Hill,
2010
• Karl E. Case, Ray C. Fair, Sharon M. Oster, ‘ Principles of Economics ’, Tenth Edition,
Prentice Hall, 2012
• ‘ List of countries by GDP (nominal) per capita ’, Wikipedia,
https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita
• ‘Our World in Data’, Oxford Martin School, https://ourworldindata.org/charts
• ‘Birth Rate – Country Rankings’, theGlobalEconomy.com,
https://www.theglobaleconomy.com/rankings/Birth_rate/G20/
• ‘Death Rate – Country Rankings’, theGlobalEconomy.com,
https://www.theglobaleconomy.com/rankings/Death_rate/G20/
• ‘Human Development Index’, Human Development Reports,
https://hdr.undp.org/data-center/human-development-index#/indicies/HDI
• ‘Poverty and Inequality’, StudySmarter,
https://www.studysmarter.co.uk/explanations/microeconomics/poverty-and-inequality/
Thank You