Critical Thinking - Assignment 1

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2 Chapter 3, Critical Thinking: 3. Countries like Canada that have a high standard of living are referred to as industrialized nations. Countries with a low standard of living and quality of life are called developing countries. (Terms formerly used were underdeveloped or less-developed countries. ) What factors prevent developing nations from becoming industrialized nations? In order to understand the reasons why countries with low standards of living and quality of life may not become industrialized nations, it is necessary to examine all the factors and the economic environment that affect developing countries on a global scale. There are factors not related to the economy that affect the developing nations, but related to the environment and history of the region. The environmental factors to consider are aspects such as landscapes that are hostile or difficult to explore due to extreme weather or the presence of flooding. The historical factors are related to the history of colonization and have been explored by industrialized nations leaving the country without resources, an aspect that still affects the explored nation even centuries later. According to Maria and Yi (2015): Many poor countries today have a per capita income that is 30 to 50 times smaller than that of the U.S. and sometimes even lower (less than $1,000 per year in 2014). For such countries to catch up to U.S. living standards, it may take at least 170 to 200 years, assuming that the former could maintain a growth rate that is constantly 2 percentage points over the U.S. rate (which is about 3 percent per year). This would be difficult, if not impossible. Those factors mentioned above are important to consider when looking for what prevents a country from becoming an industrialized nation, considering how long it takes for the living standards of a developing nation to catch up with one of an industrialized nation, the effects of colonization can still be felt.

3 Still, there are other factors that are in part a result of the one mentioned before that need to be considered, these being the government and economic aspects of the country and how multiple countries interact with each other, these being international aid, trades, wars, etc. It takes an extremely long time for developing countries to improve their standard of living to a noticeable level, making crises the definitive factor preventing those nations from becoming industrialized. The COVID-19 pandemic is a crisis that affected the whole world, but developing countries are more impacted by it in comparison to industrialized nations, due to those countries already suffering from low living standards, food or security crises, and structural vulnerabilities. On this topic, the OECD (2020) writes: The crisis has caused a significant loss of life, disrupted livelihoods, and undermined well being throughout the world. While the COVID-19 disease does not discriminate among rich or poor, its impacts will exacerbate existing inequalities. This means developing countries will be among those hit hardest, with the health, economic, and social shocks of the crisis adding to existing development challenges, including extreme poverty, violent conflicts, food shortages, and climate-related emergencies. Furthermore, early evidence suggests that the adverse impacts of COVID-19 will not only affect developing and least developed countries more harshly; they will also endure longer. This vulnerability that developing nations have to crises is important to consider when we remember that all countries need to adapt to climate change, as it affects the health of the population, agriculture, and other aspects. According to the UNCTAD (2022), Developing countries are the most affected by the consequences of climate change even though their population has barely contributed to global greenhouse gas emissions.

4 As a result of the factors presented above, it seems almost impossible for developing nations to become industrialized nations considering how long it takes for the quality of life to improve and the constant crises that affect them. References Arias, Maria A., & Wen, Yi. (2015). Trapped: Few Developing Countries Can Climb the Economic Ladder or Stay There. Federal Reserve Bank of St. Louis. https://www.stlouisfed.org/publications/regional-economist/october- 2015/trapped-few-developing-countries-can-climb-the-economic-ladder-or- stay-there Developing countries and development co-operation: What is at stake? (2020). OECD. https://www.oecd.org/coronavirus/policy-responses/developing- countries-and-development-co-operation-what-is-at-stake-50e97915/ Four Key Challenges Facing Leas Developed Countries (2022). UNCTAD. https://unctad.org/news/four-key-challenges-facing-least-developed-countries Georgieva, Kristalina et al. (2022). Poor and Vulnerable Countries Need Support to Adapt to Climate Change. IMF. https://www.imf.org/en/Blogs/Articles/2022/03/23/blog032322-poor-and-vulnerable- countris-need-support-to-adapt-to-climate-change Nickels, W. G. et al. (2019). Understanding Canadian Business (10th ed.) Mc Graw Hill Education Upreti, Parash (2015). Factors Affecting Economic Growth in Developing Countries. Major Themes in Economics, 17, 37-54.

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