Underdevelopment is the state of an organization (e.g. a country) that has not reached its maturity.
It is often used to refer to economic underdevelopment, symptoms of which include lack of access to job opportunities, health care, drinkable water, food, education and housing.
The world consists of a group of rich nations and a large number of poor nations. It is usually held that economic development takes place in a series of capitalist stages and that today’s underdeveloped countries are still in a stage of history through which the now developed countries passed long ago.
Features of Under development:
(1) Ratio of Population to land in the country:
This is supposed to be the first criterion of underdevelopment, but really, one cannot correctly assess whether a high or low ratio of population to land area is an indicator of underdevelopment.
There are many underdeveloped countries in Africa and Latin America, where the ratio of population to land is very low. Countries like India, Pakistan, etc., having high ratio of population to land also exhibit signs of underdevelopment.
(2) Ratio of industrial output to total output:
Countries with low ratio of industrial output to total output are considered underdeveloped. The degree of industrialisation is taken as the criterion. In countries where agriculture is well developed; the disposable agricultural surplus income will be generally used to subsidize uneconomic urban industries.
(3) Low rate of capital per head of population:
Ragnar Nurkse stated that ‘underdeveloped’ countries are those, which “compared with the advanced countries, are under-equipped with capital in relation to their population and natural resources.”
(4) Low percapita income:
The most commonly accepted criterion of underdevelopment is the low per capita income of underdeveloped countries as compared with the advanced countries.
Characteristics of Underdevelopment:
Harvey Leibenstein has classified the characteristics of underdevelopment under four major heads, namely
(3)Cultural and Political; and
(4) Technological and Miscellaneous.
1. Dependence on agriculture:
An underdeveloped country is exclusively a primary producing economy. It will mainly depend on the production of agricultural materials and minerals and the industries will be mainly agro-based. The share of the primary sector is larger in the national income of the underdeveloped country.
India is predominantly an agricultural country where more than 70% of the people are engaged in agriculture or in allied occupations. The pressure of population on agriculture is very high. Nearly 40% of the national income is derived from agriculture.
2. Population pressure and underemployment:
Another feature of underdeveloped countries is that they are invariably over-populated. The size of the population in these countries is increasing at a faster rate than in advanced countries.
In India, the population is growing at an alarming rate with a birth rate of about 40 per thousand. Excessive pressures on land and poor industrial development have created unemployment problems. The problem of unemployment has resulted in underemployment.
Due to population pressure, more persons are working on land than what is actually required and this is called disguised unemployment. The excess population does not contribute to the productivity of land.
3. Poor income and poor savings:
Another important feature of underdevelopment is the low per capita income of the people and less savings in the economy. 15.6% of the world population living in the industrialised countries had GNP per capita of 9,440$. The oil exporting countries of West Asia with only 0.6% of the world population had GNP per 5,470$.
4. Underutilization of resources:
The natural resources of the underdeveloped economy are either unutilised or under-utilised. Generally, underdeveloped countries may not be deficient in natural resources like land, water, minerals etc.
The main problem would be that these resources are poorly harnessed or improperly used. Poor and improper utilisation may be due to various reasons, like inaccessibility, lack of technical knowledge, shortage of capital and limited markets. Many of the African countries have good potential for development, but they remain backward due to under-utilisation of resources.
India is a country of vast natural resources. But these have not been fully utilised. It has still about 9 crore acres of cultivable wasteland. The waterpower potential of the country has been harnessed only up to 10%. The large forest wealth remains unutilized and the natural mineral wealth of the country has not yet been explored fully.
5. Capital deficiency:
Capital occupies a strategic role in production and, economic development of a nation. Underdeveloped countries would suffer from capital deficiency. Not only the stock of capital will be small, but also the rate at which it is being formed will be low.
For purpose of investment for capital formation, India has to depend on foreign countries like U.S.A., Canada, and Western Europe. More than 20% of the national income will be channelized for investment. The basic defect of the backward economies would be lack of inducement to invest and the low propensity and capacity to save.
6. Low level of technology:
The methods of production will be carried on under primitive methods. Consequently, the productivity either in agriculture or in industries will be very low. Lack of technical know-how and poor scientific advancement and obsolete technique, combined with poor entrepreneurship would result in poor quality products.
7. Foreign trade orientation:
Most of the underdeveloped countries depend upon the export of a few traditional commodities, consisting mainly of raw materials and minerals. They will be importing consumer goods and machinery.
8. Poor economic organisations:
Well-developed economic institutions are vital factors of economic development. In backward economies, the economic institutions would be either ill developed or completely absent. But in underdeveloped economies, absence of these institutions would create problems of development and growth.
9. Lack of Suitable Socio-Economic Set Up:
In underdeveloped countries, the prevailing socio-economic set up would be the greatest impediment to development. Mass poverty and illiteracy combined with caste systems, religious beliefs, etc., would adversely affect the course of economic development.
10. A Dualistic Economy:
Another important feature of underdevelopment is ‘Dualism’. Dualism is the presence of dualistic nature of economic activities and this is one of the important characteristic features of any backward economy on the way of development.
There will be market economy on one side, where marketing system would have developed exceedingly well, catering to the needs of rich and wealthy class of people, supplying them many amenities of modern life, like radio, T.V., Motor car, telephone, picture houses, tall and multistoried buildings and beauty parlors.
There will be excellent transport facilities like tram cars, electric trains, diesel locomotives, speed boats and aeroplanes, offering comfortable and also luxurious travel to the different parts of the country and also overseas.
In short, there will be market towns and cities with factories, banks, business houses, swimming pools, colleges and five-star hotels. On the other hand, there will be subsistence economy with agriculture- oriented activities in rural areas that will be very backward.
The standard of living of the people in the rural sector will be far below the standard of living of the people in the urban sector. The rural sector will not have any of the modern facilities and amenities enjoyed by the affluent classes of the urban sector.
The rural people will not have even proper roads and they may have to depend on country- carts for their transport. Basic facilities like drinking water, electricity, transport, system and medical-care will be lacking in villages.
11. Mass poverty, Misery and Low-Standard of Living:
Most of the people in underdeveloped countries are economically very backward, poor and leading a miserable life without any norms of standard of living. The backwardness, poverty and poor standard would result in low labour productivity, factor immobility, and lack of entrepreneurship and poor specialization.