Less Developed Countries
Less Developed Country- A country that is not fully industrialized and lacks financial resources and strong infrastructure, which is necessary for economic growth ("Modern World History").

Less Developed Country (LDC) describes the world's poorest countries with the following three criteria
:
("Third World Internationalism")
  • Low-income - based on a three-year average estimate of the gross national income (GNI) per capita (under $750 for inclusion, above $900 for graduation)
  • Human resource weakness - involves a composite Human Assets Index (HAI) based on nutrition, health, education, and adult literacy
  • Economic vulnerability - this is based on indicators of agricultural production, the instability of export of goods and services, the economic importance of non-traditional activities, merchandise export concentration, and the handicap of economic smallness.
The factors necessary for economic development in LDCs are: ('Modern World History")
- invLDCpicture.gifestment capital, funds to pay for the construction of industries and infrastructure
- technology to help companies and workers be as productive as possible
- healthy and well-trained workers to help reduce waste and inefficiency
- qualified managers to make sure that workers and materials are used efficiently


LDCs are struggling to acquire these factors and it is a serious problem. Imperialism and colonialism have made it difficult for the LDCs to achieve stable economic growth. This is because the imperial nations limited the economic growth of their colonies and did not allow their colonies the chance to govern themselves. After World War II most colonized nations won their independence back, but since they had underdeveloped economies and a weak government, the LDCs had much trouble trying to develop stable democratic governments and a stronger economy. Industrialized nations have tried to provide aid to the LDCs through international organizations
("Democracy and Democratization in Developing Countries").
More Developed Countries (MDC)
Less Developed Countries (LDC)
Developed Countries
Underdeveloped Countries
Industrialized Countries
Agricultural Countries
First World*
Third World *
Haves
Have Nots
Rich Countries
Poor Countries
The North
The South
Industrially Advanced Countries (IACs)
Less Industrialized Countries
According to "The Economics of Developing Countries"

Less Developed Countries: ("Third World")

Africa- Angola, Benin, Burkina Faso, Burundi, Cape Verde, Central African Republic, Chad, Comoros, Congo, Djibouti, Equatorial Guinea, Eritrea, Ethiopia, Gambia, Guinea, Guinea-Bissau, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Niger, Rwanda, Sao Tome and Principe, Senegal, Sierra Leone, Somalia, Sudan, Tanzania, Togo, Uganda, Zambia

Asia- Afghanistan, Bangladesh, Bhutan, Cambodia, Lao PDR, Maldives, Myanmar, Nepal, Timor-Leste, Yemen

Australia and the Pacific- Kiribati, Samoa, Solomon Islands, Tuvalu, Vanuatu

Caribbean- Haiti


Video




The World Bank and International Monetary Fund

In order for a country to become a member of the World Bank, they must be a member of the IMF. Both the International Monetary Fund (IMF) and the World Bank work together to reduce poverty, assess member countries' financial sectors, develop standards and codes, and improve the quality, availability, and coverage of data on external debt (Hussain, 687). Both the World Bank and IMF provide loans to LDCs and countries in need. The World Bank provides loans for large-scale development projects and the IMF provides emergency loans to countries in financial crisis ("Modern World History").
world_bank_buildingpicture.jpg

The World Bank - International organization that assists developing nations technically and financially. Its main purpose is to help develop economies in developing nations and to eliminate poverty.
The World Bank was founded during th
e United Nations Monetary and Financial Conference. One of its main goals was "to assist in the reconstruction and development of territories of members by facilitating the investment of capital for productive purposes" according to the articles of agreement. This organization is one of the world's largest sources of economic assistance to developing countries. The World Bank also provides technical assistance, policy advice, and supervision for the implementation of free-market reforms. Although the bank is affiliated with the United Nations, it functions independently from the General Assembly and Security Council. Even though there are 184 member nations of the World Bank, the president of the bank has always been an American. The World Bank is an important source that assists countries around the world financially and technically ("World Bank").


imf-boardpicture.jpgThe International Monetary Fund (IMF) - A specialized agency of the United Nations that is geared most toward the LDC's and also monitors and advises countries on economics policies, lends hard currency to members of the fund, and provides technical assistance and training ("The International Monetary Fund").
The IMF receives its income by charging member countries that draw on its financial resources a higher interest rate than it pays to its member country creditors. However, this became unsustainable in recent years because of a sharp drop-off in lending activity. In 2007 the IMF strictly limited sales of gold to establish an endowment. In 2008 the IMF endorsed a new package of measures to end the IMF's over-reliance on lending income
("Modern World History").

Table that shows how the IMF receives its income.

incomemod02.gif
The income model for the IMF according to "The International Monetary Fund"

DRAWBACKS TO THE WORLD BANK-
The World Bank may fund a project that it considers worthy, but will do little to help the people in the country("Modern World History").

DRAWBACKS TO THE INTERNATIONAL MONETARY FUND-
Countries that are receiving loans from the IMF are having harsh financial conditions set upon them by the IMF ("Modern World History").

Foreign Investment in Newly Emerging Democratic Nations-

Industrialized nations invest in newly emerging democratic nations. There are benefits and drawbacks to investing in LDCs. The benefits are stability in the country, more educated communities, and natural resources. If a nation invests in a LDC and their work to become a new democratic nation fails then it is a drawback for the industrialized nation that did invest in the LDC. It is a drawback because the industrialized nation spent a lot of money, effort and time into helping the LDC establish a democracy and industrialization. Many lives may be lost also because of wars that take place in the LDC ("Modern World History").

Multiple Choice Question:

Which of the following is NOT a reason why the LDCs are struggling to develop democratization?
a) Colonization prevents countries the chance to govern themselves
b) LDCs have underdeveloped economies and weak governments
c) LDCs are not involved in international organizations
d) Colonization limits growth of LDCs economies

Works Cited


Beck, Roger B., Linda Black, Larry S. Krieger, Phillip C. Naylor, and Dahia Ibo Shabaka. Modern World History. Evanston, Illinois: McDougal Littel, 2005. 687-689. Print.

“Dare You to Move- Children in Africa." Online Video Clip. 20 May 2008. YouTube. 5 May 2010.

Davis, R. Hunt, ed. "Africa and the World Bank." Encyclopedia of African History and Culture: Independent Africa (1960 to Present), vol. 5. New York: Facts On File, Inc., 2005. Modern World History Online. Facts On File, Inc. Print. May 11, 2010).

Hussain, Syed B. "International Monetary Fund (IMF).” Encyclopedia of Capitalism. H-R. II. New York, New York: Facts On File, Inc., 2004. Print.

Hussain, Syed B. "Third World Internationalism." Encyclopedia of Capitalism. S-Z. III. New York: Facts On File , 2004. Print.

Hussain, Syed B. "World Bank." Encyclopedia of Capitalism. S-Z. III. New York, New York: Facts on File Inc., 2004. Print.

"IMF Managing Board." World Politics News Review. Web. 5 May 2010.

“International Monetary Fund.” Washington D.C. IMF, 2005. Web. 6 May 2010.

Jackson, Michael, and Jean, Wyclef. "We are the World 25 for Haiti." Jones, Quincy, 2010.

"Pepe in Haiti." Our Past is Haiti’s Present: An Interview with “Secondhand (Pepe)” filmmakers Hanna Rose Shell and Vanessa Bertozzi. Web. 11 May 2010.

Samarasinghe, S.W.R. de A. "Democracy and Democratization in Developing Countries." American University (1994): 6-9. Web. 5 May 2010.

The Economics of Developing Countries. Web. 11 May 2010.

"The World Bank." ThinkGeoenergy. Web. 5 May 2010.

"Third World." Huntingdon Valley: Farlex. 2010. Web.