Economic Inequalities among Countries
The developed nations have enough progress in areas of Health, Education, and Trade. Governments have enough funds to finance the public services and the happiness index is also high. The philosophy to fight pandemics requires mutual coordination and it is a must to reduce economic inequalities. How it is possible to reduce inequalities in today's scenario where rich countries are becoming richer and poor countries are becoming poorer. What is the status of various countries in terms of resources and incomes and how the developed nations are supporting to rise economically, what further can be done to reduce economic inequalities?
What are the signs to identify a developed nation?
The developed nations have good healthcare infrastructure, a high standard of living, proper well-settled education setups, sound sources of income to meet future requirements, etc. The countries are identified as Developed, Developing, and underdeveloped on the basis of Gross Domestic Product (GDP). Whatever is manufactured or produced in a country that is valued in monetary terms, known as Gross Domestic Product. As per nominal GDP, the following countries have the highest ranking:
a. United States:
The largest economy in nominal GDP (i.e. in terms of economic growth and performance). Since 1871, the United States of America ranked in the top largest economies. As per data of IMF in 2021, the GDP of the United States is $21.44 Trillion and the country ranked second in terms of natural resources in the world worth $45 Trillion.
Why the United States is ranking at the top?
There are several merits for which the United States top in terms of economic value. First is Entrepreneurship, the US is known for innovation and supporting entrepreneurship and due to this single merit, it is leading manufacturing around the world.
b. China:
With an average growth rate of 9.5%, its nominal GDP is $14.14 Trillion and the value of natural resources is $23 Trillion. The biggest merit is the ease of doing business, controlled prices with regulations, workforce education to perform better which leads to efficiency in operations.
c. Japan:
Its GDP is $5.15 Trillion. Its biggest merit is free market-driven businesses without any regulatory control/government action. It is the largest in electronic goods and automobiles.
d. Germany:
Its GDP is $4 Trillion and it is Europe’s strongest nation.
e. United Kingdom:
Its GDP is $2.83 Trillion and it is known for its largest exports of goods.
f. France:
Its GDP is $2.71 Trillion. With Free market orientation, chemical manufacturing is making the nation significant.
g. India:
Its GDP is $2.94 Trillion. In terms of GDP, it over-taken the United Kingdom and France in 2019. It is known for its services, growing fast in the world.
h. Italy:
Its GDP is $1.99 Trillion and it is also known for exports.
i. Brazil:
Its GDP is $1.85 Trillion and it is the largest most populous nation in Latin America.
j. Canada:
Its GDP is $1.73 Trillion and the value of natural resources is $33.2 Trillion. It is an energy superpower with resources of petroleum.
Why developed nations develop more than developing and underdeveloped nations?
With enough resources in hand, the developed nations stay on the higher side and the merits they are enjoying with the effective and efficient political and economic structure are:
(1) Limited Deficits and Low Debt:
The developed nations are rich in natural resources and are self-sustained. Therefore, the nations have very little debt and exports are higher than imports.
(2) High rate of savings and investment:
The developed nations save more, therefore invest more, which further increases their GDP. Due to this merit, these nations stay at the top.
(3) Universal Education Set-up:
The citizens of developing and under-developed countries dream to be richer and they beg for the visa of developed nations. Due to this, the regulatory mechanisms of developed nations enforce their education universally and get higher income out of it.
(4) Low Taxation of Agriculture:
Agriculture is promoted in developed nations and the farmers with technical skills prefer to go there and reside there. The students with innovative minds are easily attracted to the developed nations as they know that their businesses are safer in the developed nations. It again makes the talent of poor countries went to the developed countries.
(5) Export Promotion:
The developed countries are exporting more than the imports while the developing countries are importing more than exporting. It means the countries which are not self-sustained and dependent upon imports cannot grow higher than the countries with low debt.
(6) Technological Progress:
The scientific progress is quite higher in the developed countries.
Why and How Developed Countries support Underdeveloped Countries?
1. Investment in the progress of Underdeveloped Countries:
The United States finances the agencies of the United Nations, the world’s main organization to deliberate matters on peace and security. The United States contributed $11 Billion to United Nations in the year 2019, almost 22 to 25% of the budget of the United Nations is funded by the United States. The funding is distributed among the bodies of United Nations including the International Atomic Energy Agency and World Health Organization (WHO), United Nations Children’s Fund (UNICEF), the Office of the United Nations High Commissioner for Refugees (UNHCR), and the World Food Program (WFP), etc.
In 2017, the United States decided to suspend its funding to the United Nations Population Fund and other organizations that promote abortions as a method of family planning. In 2020, the United States announced to withdrawal from World Health Organization over concerns about Chinese influence in the Covid-19 pandemic. But the new president Sh. Biden halted the planned US exit from WHO and also restarted the funding to UNFPA which was stopped in 2017.
2. Official Development Assistance (ODA):
Around $10.4 Billion every year are donated by Japan as official development assistance to underdeveloped countries.
3. Healthcare facilities:
The developed countries support the developing and underdeveloped countries in developing healthcare infrastructure. The Medical camps, advice, and promoting vaccinations through World Health Organization (WHO) or direct foreign aid supports the underdeveloped countries to grow.
4. Educational Support
Opening new schools, polytechnic institutions, colleges, universities for improving the literacy rate in developing and underdeveloped nations; even the scholarship programs are announced so that higher education is promoted. There are online degree scholarships also apart from those which require travel to developed countries.
(a) Common Wealth Distance Learning Scholarships:
The official website providing scholarship is https://cscuk.fcdo.gov.uk/scholarships/commonwealth-distance-learning-scholarships-information-for-candidates/
(B) Edinburgh Global Distance Learning Scholarships
The official website for these scholarships is http://www.ed.ac.uk/student-funding/postgraduate/e-learning/online-masters
(C) University of the People Tuition Free Degrees
The official website of these scholarships is https://www.uopeople.edu
(D) Free Online Courses:
There are courses that are offered online and can be done from home:
https://www.edx.org/
https://www.coursera.org/in
https://www.udemy.com/
https://www.khanacademy.org/
https://academicearth.org/
5. Free Trade Agreements:
Reducing barriers to international trade also supports the developing and underdeveloped countries to grow by making more exports.
*Copyright © 2021 Dr. Lalit Kumar. All rights reserved.
