Problems of the

Third World Countries

Submitted by:

Morgadez, Rigine – Introduction

Garbo, Paulyn – Characteristics

Gutierrez, Franczeska – The Problems

Naquila, Emerald – The Vicious

Moncal, Christine – The Barriers

 PROBLEMS OF THE THIRD WORLD COUNTRIES

Objectives:

- Understand the characteristics of the third world countries which have mainly

caused their major problems.

- Identify the factors that are contributing to the slow growth to the developing countries

that belong to the third world countries.

Third Word Countrie

Alfred Sauvy, a French demographer, anthropologist, and historian, is credited with coining the

term “Third World” during the Cold War. Sauvy observed a group of countries, many former

colonies, that did not share the ideological views of Western capitalism or Soviet socialism. "Three

worlds, one planet," an article that he wrote in 1952 and published in L'Observateur.

There can be a few ways to divide up the world for purposes of economic segmentation.

Classifying countries as First, Second, Third, and Fourth World is a concept that was created

during and after the Cold War. A cold war is a state of conflict between nations that does not

involve direct military action but is pursued primarily through economic and political actions and

propaganda. It was a political constellation of countries with two different world-views. On one

side were the industrialized capitalist nations aligned with the USA, called the Western Bloc, or

the "Free World.” On the other side were the Communist workers and peasants states of the Eastern
Bloc, the socialist countries within the power fabric of the Soviet Union, and Mao's China. In

Europe,

When people talk about the poorest or underdeveloped countries of the world, they often

refer to them with the general term Third World. The terms 'underdeveloped' and 'poor' are

generally used to refer to low income countries. The countries which have low standard of living

because of their low per capita incomes. Countries are classified into developed and

underdeveloped countries according to their per capita income.

The rich countries include United States, Canada, Western Europe and Australia. The poor

counties cover most of Asia, Africa, south eastern Europe and Latin America And there were

middle income countries with a population of 15% which got 18% of world income. They

consisted of countries such as Argentina, South Africa, Israel and former soviet Russia. The poor

countries are collectively referred to as the Third World.

  Characteristics of the Third World Countries

1. Low Level of Income:

Underdeveloped countries are maintaining a very low level of income in comparison to that of

developed countries. The per capita incomes of these groups of countries are extremely low if we

compare it with that of developed countries.

2. Mass Poverty:

The degree of poverty in these economies gradually increases due to increase in its size of

population, growing inequality in income and increasing price level.

3. Lack of Capital Formation:

As the level of per capital income in these countries is very low thus their volume and rate of

savings are also very poor. This has resulted lack of capital formation and which is again

responsible for low rate of investment in these countries.

4. Heavy Population Pressure:

The underdeveloped countries are also characterised by heavy population pressure. The natural

growth rate of population in these countries is very high due to its prevailing high birth rate and

falling death rate.

5. Agricultural Backwardness:
Being the most important sector, agricultural sector in these countries remains totally

underdeveloped. But what is more peculiar is that these countries are depending too much on this

agricultural sector.

6. Unemployment Problem:

Excessive population pressure and lack of alternative occupations have resulted in huge

unemployment and underemployment problem in these underdeveloped countries.

7. Unexploited Natural Resources:

For maintaining a rapid pace of economic growth in these underdeveloped countries, possession

of different types of natural resources in sufficient quantity and its utilisation are very important.

But under-developed countries are either suffering from scarcity of raw materials or from un-

exploited natural resources of its own.

8. Shortage of Technology and Skills:

Underdeveloped countries are facing low level of technology and lower skills that leads

responsible for the inefficient and insufficient production. The pace of economic growth in these

countries is very slow due to application of poor technologies.

9. Lack of Infrastructural Development:

Lack of infrastructural development is a common feature of underdeveloped countries. In respect

of transportation, communication, generation and distribution of electricity, credit facilities, social

overheads etc. Due to inadequate infrastructural facilities, the pace of economic development in

these countries are very slow.

 10. Lack of Industrialization:

Underdeveloped countries are characterized by lack of industrial development. The pace of

industrialisation in these countries is very slow due to lack of capital formation, paucity in the

 The Problems of Less Develop Countries

1. OVERPOPULATION

Most of the third world countries are facing difficulties in adjusting their population.

Overpopulation is associated with negative environmental and economic outcomes. A large

number of people needs a large number of resources. The main effect of the overpopulation is

the unequal and unrestrained use of resources. Overpopulation can cause lack of resources,

violence, shortage of foods and many more.

2. HUNGER AND POVERTY

Poverty is also one of the major problems of the third world country. The third world

country are greatly affected by the hunger and poverty due to a great number of population and a

shortage of foods. Poverty can cause violence, death, etc.

3. ILLITERACY

Good education plays a key role in development. Third World Countries lag behind since

they have insufficient funds to the literary growth and also some of the funds are wasted

wrongfully. A big part of population is illiterate due to ignorance of the government as they

ignore the issue of the education.

4. TERRORISMS
 Terrorism is the use of violence against civilians by sub-national groups for political

purposes. A sense of perceived injustice and the belief that violence will effectively redress it is

the ideal breeding growth of terrorism.

5. DISEASES

A lot of money and time in the Third World Countries have been spent in fighting and curing

a disease it can cause a lot of damage and also death of people.

 The Vicious Circle of Poverty

The vicious circle of poverty is a concept of interrelated factors explaining the poor

development of individual economic agents, regions and countries. Fluctuations in economic

conditions associated with improvement are leveled by subsequent population growth.

This term was first proposed in the works of Hans Singer and Raul Prebisch in 1949-1950.

The vicious circle of poverty is a problem of developing countries, when a low level of per capita

income does not allow saving and investment at the level necessary to achieve the minimum rate

of economic growth.

Households do not have the opportunity and incentives to save, low incomes mean low

demand, as a result of which poor resources and lack of incentives impede investment in physical

and human capital, and hence labor productivity remains low. And since the specific output

determines the income of each employee, then personal income will also be low.
 Vicious Circle of Poverty

The vicious circle of poverty can be overcome by increasing the rate of growth of capital

accumulation, raising the level of investment to 10% while simultaneously controlling

population growth. Then there will be an increase in real income per capita, which will lead to an

increase in savings and to an increase in labor productivity and personal income.

 THE BARRIERS TO DEVELOPMENT OF THE THIRD WORLD COUNTRIES

1. POOR GOVERNANCE

The system of government is the key to development. Governance directly affects social and

economic sectors. Almost all over the world, it is the work of the government to provide

security, health care, business permits and licensing, education, infrastructure and other crucial

services. But in Third World Countries, most of the systems of government are not properly

functioning. Most of the Third World Governments have aspects of dictatorship.

2. CORRUPTION

Corruption is perhaps the biggest barrier in combating poverty in these Third World

Countries. Some developing nations suffer from corruption in many sectors of their economies.

This weakens the operation of the price mechanism. Hence, economic development will be

lagging behind.

3. WARS AND NEGATIVE ETHNICITY

 Wars have also hindered the eradication of poverty in Third World Countries. When there is

war no major economic activity can take place, people become displaced as refugees. War also

creates anarchy and destruction of property. War hinder economic development and war in one

region can affect the whole region and sometimes the whole world.

4. ILLITERACY

Many people in third world countries remain uneducated and illiterate. Some have never

been to school and cannot even write their own names. Illiteracy limits these people to only

doing manual, demanding physical work and since man is mortal, this becomes a big challenge.

Many cannot use the internet.

5. DISEASES

Diseases have also been affecting the population in the Third World Countries. Tropical

diseases like Malaria have continued and kill many Africans in large numbers. In Asia, diseases

like bird flu continue to hit with the majority of the affected in Third World Countries. The

pandemic has negatively hit the economy as young, energetic, and productive members of the

society.

6. LACK OF NATURAL RESOURCES

Many developing nations are in deficient in natural resources thus a position which will not

allow them to develop. In developed countries also resources are under-utilized, unutilized and

this is their reason for backwardness.

7. LACK OF INFRASTRUCTURE

Lack of infrastructure which is essential for development is one of the hinders in economic

development because if goods cannot be transported from one area to another then trade and
development is restricted. Poor power supplies harm production and poor communication

channels disturbs coordination of economic activity by stake holders.

8. LACK OF SKILLED HUMAN RESOURCES

Human resources are an important factor in economic development. Man provides labor power

for production and if a country’s labor is efficient and skilled its capacity to contribute to economic

development is high.

9. WEAK LEGAL SYSTEM

Many developing countries, the legal system does not function well. Property rights allow

people to own and benefit from their private property. Hence, if there is no enforceable property

rights, as is the case in many developing countries, then investment and growth and development

will be very much reduced.

References:

https://www.investopedia.com/terms/t/third-world.asp

https://www.brainkart.com/article/Characteristics-of-underdeveloped-countries_1425/

http://www.economicsdiscussion.net/underdeveloped-countries/characteristics-of-an-

underdeveloped-countries-top-14-characteristics/18971

https://www.economicport.com/concepts-all/vicious-circle-poverty.html