Chapter 6 - Economic Development

ECONOMIC DEVELOPMENT
CHAPTER 6
INTRODUCTION
Economic development is simultaneously a concept, an activity and

a professional practice. Not only is economic development a popular
topic of discussion, it is also an activity for which there are high
expectations, and significant investments of public money.
International works considers the economic development to be the

strengthening of autonomy and substantive freedoms, which allow
individuals to fully participate in economic life. Hence, economic
development occurs when individual agents have the opportunity to
develop the capacities (e.g. access to education, health and etc) that
allow them to actively engage and contribute to the economy
(Amartya Sen, 1999)
LEARNING OBJECTIVES
1. Poverty – Definition, Poverty Line, Relative and

Absolute Poverty
2. Definition of Economic Growth & Economic
Development
3. Objectives of Economic Development
4. Economic Impediments and Conditions Among
Developing Countries
5. Poverty Eradication Strategies
WHAT IS
POVERTY?
WHY
CONCERN?
This Photo by Unknown Author is licensed under CC BY-SA
WHAT IS POVERTY?
 What poverty is taken to mean depends on who asks the question,

how it is understood, and who responds. From this perspective,
the meaning of the poverty can be identified from various clusters
of meanings such as (Robert Chambers, 2002):
1. Income poverty
2. Material lack or want
3. Capability deprivation
4. The meanings of poverty have all been constructed by “us”,
by development professionals
INCIDENCE OF POVERTY
• Poverty refers to the condition of not having the means

to afford basic human needs such as clean water,
nutrition, health care, clothing and shelter. This is also
referred to as absolute poverty or destitution.
Incidence of Poverty in Malaysia
How to Measure Poverty?
POVERTY LINE INCOME (PLI)
• PLI - It may be thought of as the
minimum expenditure required by
an individual to fulfill his or her
basic food and non-food needs.
HOW TO • The threshold that we use for this
MEASURE is the poverty line. The poverty line
POVERTY defines the level of consumption
? (or income) needed for a household
to escape poverty.
Poverty
Line • It is also defined as an income
sufficient to purchase a minimum
Income basket of food to maintain
(PLI) household members in good
nutritional health and other basic
needs.
Poverty
Line
Income
(PLI)
TYPES OF POVERTY
1. Absolute poverty
• A condition in which the gross monthly income of a
household is insufficient to purchase certain minimum
necessities of life (clothing, rent, fuel).
• Quantifies the number of people below a poverty threshold
(independent of time and place)
• For the measure to be hardcore, the line must be the same in
different countries, cultures and technological levels.
CONTINUE…
2. Hardcore poverty
 A household is defined as hardcore poor if his monthly household
income is less than the half of PLI
3. Relative poverty
 A person lacks the necessary resources to enable them to participate
in the normal and desirable patterns of life that exist within a given
society at a given time. (As the proportion of household earning in
incomes less than half the mean or median income)
 Defined in terms of inequality between groups and is measured by
using income disparity ratio of income group ethnic urban and rural.
 E.g. Rural dwellers as being relative poverty to another group such
as Urban dwellers.
THE MEASURE OF POVERTY IN MALAYSIA
There are categories of what is considered ‘poor’ (Economic

Transformation Programme, 2015):
 Extreme poverty. These are households which fail to earn enough to

fulfil basic survival needs such as food, clothing and shelter. Households
that fall into this category earn average monthly incomes of less than
RM460 in Peninsular Malaysia, less than RM630 in Sabah and less than
RM590 in Sarawak
 Poor. These people fall short of certain standards of consumption which

are deemed necessary to maintain ‘decency’ in society, for example,
those who cannot afford healthcare and education. Households with
average monthly incomes of less than RM760 in Peninsular Malaysia,
less than RM1,050 in Sabah and less than RM910 in Sarawak are defined
as poor
POVERTY
VICIOUS CYCLE
• The cycle of poverty has been defined
as a phenomenon where poor
families become trapped in poverty
for at least three generations.
• These families have either limited or
no resources. There are many
disadvantages that collectively work
in a circular process making it
virtually impossible for individuals to
break the cycle.
• This occurs when poor people do not
have the resources necessary to get
out of poverty, such as financial
capital, education, or connections.
Economic Growth and Economic
Development
What and Why?
ECONOMIC GROWTH & ECONOMIC
DEVELOPMENT
According to Zuvekas (1969)
Economic Growth refers to
“the increase overtime in a country’s real output of goods and

services (real output per capita GNP). It focuses more on
quantitative measures”
Economic Development is a process of change that is focused on the

betterment of the community, state and nation. It also refers to
“the progress towards reducing the incidence of poverty,

unemployment, and income inequalities. It should be emphasized
here that measuring E.D is more complex and difficult to measure as
compared to E.G. (Focus more on qualitative measures)”
OBJECTIVES OF ECONOMIC
DEVELOPMENT
1. To better understanding the meaning of development and it processes

2. To examine the most influential theories of development that
compatible to develop less developed countries
3. To understand the causes of unemployment in the developing
countries
4. To examine the conditions of poor countries and poor people
5. To eradicate poverty by examining the main causes of poverty
6. To provide better information to the development experts
Politics Social Economy Technology
ECONOMIC IMPEDIMENTS AMONG

DEVELOPING COUNTRIES
Economic Impediments Among
Developing Countries
1. Political instability e.g. war
2. Lack of political support e.g. no political will
3. Institutional problem e.g. corruption, red-tape
4. Low skilled workers e.g. low productivity
5. Agricultural or commodity dependence e.g. main source of
revenue
6. Foreign aid dependence e.g. IGOs
7. Limited technology infrastructures e.g. lab, maintenance,
R&D
POVERTY ERADICATION STRATEGIES
1. The introduction of new land development and settlement scheme - to provide land and
employment for the landless poor e.g. FELDA
2. The establishment of development authorities to manage rural development e.g. Land
development authorities (LDAs – e.g. RISDA & FELCRA) and Regional development
authorities (RDAs – e.g. KEJORA, KETENGAH, KESEDAR, KEDA)
3. In-situ rural development - to encourage replanting, rehabilitating and consolidating
problematic existing agricultural land and areas of low productivity e.g. Integrated
Agricultural Development Projects (IADP – e.g. KADA and MADA agencies)
4. Providing decent shelters and education – e.g. development programme for the hard-
core poor, PPRT
5. Government supports through Microcredit programme e.g. Ikhtiar Loan Scheme (AIM)
6. Encourage public participation in decision making in economic and development
programme e.g. Gerakan desa/daya wawasan (GDW)
This Photo by Unknown Author is licensed under CC BY-SA
The end
Thank you

Chapter 6 - Economic Development

Uploaded by

Copyright:

Available Formats

Chapter 6 - Economic Development

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Chapter 6 - Economic Development

Uploaded by

Copyright:

Available Formats

ECONOMIC DEVELOPMENT

Economic development is simultaneously a concept, an activity and

International works considers the economic development to be the

1. Poverty – Definition, Poverty Line, Relative and

 What poverty is taken to mean depends on who asks the question,

• Poverty refers to the condition of not having the means

There are categories of what is considered ‘poor’ (Economic

 Extreme poverty. These are households which fail to earn enough to

 Poor. These people fall short of certain standards of consumption which

According to Zuvekas (1969)

Economic Growth refers to

“the increase overtime in a country’s real output of goods and

Economic Development is a process of change that is focused on the

“the progress towards reducing the incidence of poverty,

1. To better understanding the meaning of development and it processes

ECONOMIC IMPEDIMENTS AMONG

You might also like

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.