It is difficult to specify a typical underdeveloped country. The underdeveloped or developing countries are spread throughout the continents of Asia, Africa, South America and even Europe. Their number is quite large. Besides, they have diverse characteristics. If some are endowed with abundant natural resources, others are not. If some are overpopulated, others are sparsely populated. They differ in their economic, social, cultural and political conditions. They might be passing through different stages of development. The underdeveloped countries do not reveal all the features of underdevelopment.
In spite of these differences and heterogeneity, they exhibit certain common characteristics in varying degrees. These characteristics of underdevelopment may of discussed below. From a study of these features a systematic analysis of the economic landscape of the underdeveloped countries is possible.
Characteristics of developing or Underdeveloped countries
1. Widespread poverty :
The most important feature of the underdeveloped countries is general poverty. Poverty is the fundamental malady. The per capita income in these countries is very low in comparison to the other developed countries such as the U.S.A., West Germany, France, Canada, etc. For instance, per capita income in the United States and Canada was 58 times and 56 times of the per capita income of India in 1977. "The collective per capita income of the underdeveloped countries average less than one-fourteenth of the per capita income of the rich nations."
This abnormally low per capita income leads to very low living standards of the people. More than 50 per cent of the people live below the poverty line. Although 50 to 60 per cent of the income is spent on food, it cannot secure a balanced diet. It manifests in the low consumption of protein. Food mainly consists of cereals. While the diet in the advanced countries includes fruits, milk, fish, meat, etc., in most of the developed countries, the average calorie of food is around 3,000, whereas it is hardly 2,000 calories in the developing economies.
The consumption of protein also is more than double in the former than in the latter. In the consumption of non-essential and semi-luxury goods also there are glaring disparities in the levels of per capita consumption. Thus, most of the developing countries are characterised by widespread poverty, hunger, malnutrition, ill-health, diseases and low life expectancy.
The disparity between the developing and the developed countries is widening because of a slower growth rate in the former than the latter. This has added a new dimension' to the problem of underdevelopment in the recent years. In 1977, the developing countries, excluding the oil-producers—with 53 per cent of world population, accounted for only 17 per cent of world GNP. According to 1978 World Bank Atlas the industrialised countries commanded over 63 per cent of world GNP with only 17 per cent of world population.
2. Heavy reliance on agriculture :
“The vast majority of developing countries are agrarian in economic, social and cultural outlook." Agriculture, both subsistence and commercial, often constitutes the main occupation. More than 60 per cent of the population depend on farming, fishing and herding. In India, for instance, 70 per cent of the population depend on agriculture. On the other hand, the percentage of active population engaged in agriculture is hardly 4 per cent in the U.S., 3 per cent in the U.K. and 8 per cent in Canada, agriculture contributing 3 per cent and five per cent of the national income respectively.
Although agriculture is the main occupation in these countries, yet strangely agricultural techniques are usually primitive, inefficient and outdated. Agriculture happens to be an overcrowded depressed industry. Agricultural productivity is extremely low. This is reflected in the fact that the share of agriculture in the total employment is disproportionately larger than its share in the national income. In Tanzania 86 per cent of the labour force is engaged in agriculture, but it contributes only 37 per cent of the national income. In Kenya and Zaire 80 per cent and 78 per cent of the labour force engaged in agriculture turn out 31 per cent and 8 per cent of national income. In India" the relative productivity of a farmer is only 70 per cent of an average worker.
In recent years modern farm technology has been increasingly adopted in these countries. However, the average yield is still much lower than in the developed countries. The paradox is that agriculture in an industrially developed country is much more advanced than in a developing economy. Backward agriculture is a symptom of poverty leading to malnutrition, seasonal hunger and disguised unemployment.
3. Capital deficiency :
A striking feature of the underdeveloped countries is capital deficiency. An underdeveloped economy has been rightly designated as a "capital poor economy." As Oscar Lange put it, "An underdeveloped economy is an economy in which the available stock of capital goods is not sufficient to employ the total available labour force on the basis of modern techniques of production." The amount of capital per head is very low. Insufficiency of capital equipment per head explains the low level of productivity per worker. The capital deficiency is also reflected in the form of low rate of capital formation. Thus, if the rate of capital formation in a developed country is as high as 30 per cent, in a less developed country it may be 10 to 15 per cent.