Conditions of development

The end of World War II saw the emergence of independent States out of European colonies in Asia, Africa and the West Indies. This was followed immediately by a spat of books on the theory of development or economic growth.

Intellectual giants like W.Aurther Lewis, W.W.Rostow and H.Myint each gave a formula for the development process. They had no doubt the formulas that had worked in the West could also work in other parts of the world mutatis mtandis.

Sixty years after economic history has demonstrated that there is no such thing as one-size-fits-all in the process of development. A modification of the theory of economic growth was the Washington Consensus which emphasised the role of markets in development and the priority of the private sector.

During that period, the most impressive economic transformations took place in East Asia. In counties like Taiwan, Singapore, South Korea the State and the private sector worked in the sort of partnership that development theoreticians either directly or indirectly condemned. But the results astounded the world.

Does this mean that the theories of economic development contained no elements which can guide us today? They contained quite a lot. Much depends in how much a country turns theories into practical tools.

The pundits identified conditions of economic development which can be divided into internal and external.

Internal Conditions

1.Endowment and physical resources. These include raw materials, land and climate. At present, countries like Ghana, Ethiopia and Tanzania are said to be experiencing high economic growth rates. Botswana during the post-colonial era has become one of the wealthiest countries in Africa. In all these cases, the primary conditions of development have been natural resources.

Malawi has remained poor during most of the time not because its people have been less energetic than other Africans. Rather because its natural resources have not been of the type that attracted billions of dollars in overseas markets.

2. The size of the domestic market.

A large country both geographically and demographically plus adequate income of the people can undergo transformation depending mostly on its internal market. Small countries with tiny populations are handicapped unless world markets are open to them.

3. Social and political conditions.

This included a progressive culture that welcomes efforts at modernisation. Needless to add there must be political stability and peace.

4. Government policies.

The government should pursue clear policies towards achieving economic development. There are times when openness works as was the case with Hong Kong and Singapore. But certain countries have opened their doors to the world like Japan and China. Each country is a specific model. Does the government encourage entrepreneurs?

5. The pattern of income distribution.

Some people advocate uneven distribution of wealth. They say where wealth is concentrated in a few, families savings are high, capital accumulates and there is high development. Others say a more egalitarian distribution fo wealth creates a mass market for basic products like food and textiles. Each government must pursue a policy which is socially as well as economically acceptable.

6.Population growth.

Development is or must be concerned with the people or else what is it for? Too small a population is a barrier to development because it does not provide markets for agricultural and manufacturing products. A population which is too big makes development difficult because government can never raise enough money to build schools and hospitals.

Whatever income is earned is spent on consumption goods instead of invested. A government must advise a population policy that promotes rather than frustrates development.

External conditions

The following external conditions either deter or engender development.

1. The growth of the international community.

The greater the demand foreigners have for a country’s products, the more growth and development it experiences. Africa at present is experiencing high growth rates because the Asian economic giants China and India are buying its commodities on a grand scale.

2. The stability of the international market.

It is not enough that a country is able to sell its commodities like copper, tea and tobacco in world markets. Those markets must not be subject to heavy fluctuations. No development can be achieved if prices of exports rise and fall unpredictably.