Economic Development
Part 1 Section 2
Low Standards of Living (Characterized by Low Incomes, Poor Health, and Inadequate Education)
In Chad, the majority of the population has a low standard of living, shown through their high levels of inequality, poor housing, low standard of health, high infant mortality rate, high levels of malnutrition, lack of overall education and high poverty levels. The link below has statistics that depict many of these factors, portraying that low standard of living. For example, Chad's low literacy rate of 47% and low net enrollment ratio in primary school, 70.1%, show the lack of education in Chad. High poverty levels in Chad are shown through its high poverty headcount at national poverty line with 55% of the population below the poverty line.
While this has improved, as can be seen in the graph of poverty levels, from 2001's population under the poverty level, over half of the population is still living below the poverty line, meaning that the citizens of Chad cannot afford adequate housing and vaccines and other basic necessities. Also, life expectancy at birth is 49.6 years, adding to the low standard of living (Spreadsheet). All of these factors contribute to the low standard of living in Chad, which is a direct result of Chad's lack of economic growth and development.
Low Standards of Living (Characterized by Low Incomes, Poor Health, and Inadequate Education)
In Chad, the majority of the population has a low standard of living, shown through their high levels of inequality, poor housing, low standard of health, high infant mortality rate, high levels of malnutrition, lack of overall education and high poverty levels. The link below has statistics that depict many of these factors, portraying that low standard of living. For example, Chad's low literacy rate of 47% and low net enrollment ratio in primary school, 70.1%, show the lack of education in Chad. High poverty levels in Chad are shown through its high poverty headcount at national poverty line with 55% of the population below the poverty line.
While this has improved, as can be seen in the graph of poverty levels, from 2001's population under the poverty level, over half of the population is still living below the poverty line, meaning that the citizens of Chad cannot afford adequate housing and vaccines and other basic necessities. Also, life expectancy at birth is 49.6 years, adding to the low standard of living (Spreadsheet). All of these factors contribute to the low standard of living in Chad, which is a direct result of Chad's lack of economic growth and development.
High and Rising Levels of Unemployment and Underemployment
Most developing nations have unemployment rates of between 10% and 20%. As shown in the statistics above, Chad has an even higher unemployment rate, at about 68.2% of the total labor force (Spreadsheet), emphasizing Chad's status as a developing nation. It is very difficult to measure unemployment in a developed economy, since unemployment rate doesn't account for the people who have been unemployed for so long that they have stopped searching for work, those that work for a few hours a day in a family business, or the underemployed, who are working in jobs below their qualifications or are working while looking for better jobs. Also, 80% of Chad's total employment is in the agricultural sector, much of it is focused on primary products like cotton (World Factbook). It would be very difficult to calculate a statistic, but a portion of that number is most likely overqualified for those jobs in agriculture, which would again not contribute to the unemployment rate. This high unemployment rate, which leaves out many other types of unemployment, greatly emphasizes Chad's status as a developing nation.
Most developing nations have unemployment rates of between 10% and 20%. As shown in the statistics above, Chad has an even higher unemployment rate, at about 68.2% of the total labor force (Spreadsheet), emphasizing Chad's status as a developing nation. It is very difficult to measure unemployment in a developed economy, since unemployment rate doesn't account for the people who have been unemployed for so long that they have stopped searching for work, those that work for a few hours a day in a family business, or the underemployed, who are working in jobs below their qualifications or are working while looking for better jobs. Also, 80% of Chad's total employment is in the agricultural sector, much of it is focused on primary products like cotton (World Factbook). It would be very difficult to calculate a statistic, but a portion of that number is most likely overqualified for those jobs in agriculture, which would again not contribute to the unemployment rate. This high unemployment rate, which leaves out many other types of unemployment, greatly emphasizes Chad's status as a developing nation.
Substantial Dependence on Agricultural Production and Primary Product Exports
Chad relies heavily on primary product exports, especially of agriculture and the newest industry in Chad, oil. When exports of oil increase, as seen in the article below, it can have amazingly beneficial effects on Chad's economy and its people. As previously stated, Chad's primary product industry accounts for 80% of the labor force. If the exports of oil continue to increase and take off in the world market, it will affect much of the workers in the primary product sector, especially those who work with oil. These workers' incomes will go up, since they will be selling more goods to outside countries, and these workers can then send their children to school or provide them with vaccines, increasing economic development in the country and bringing Chad up out of its developing nation status. Although Chad makes most of its money out of this one agricultural/ primary products sector, which makes them a developing nation, they are working on increasing their world standing and GDP, which they could then use to modernize Chad and build up its industrial sector, bringing it to developed.
Chad relies heavily on primary product exports, especially of agriculture and the newest industry in Chad, oil. When exports of oil increase, as seen in the article below, it can have amazingly beneficial effects on Chad's economy and its people. As previously stated, Chad's primary product industry accounts for 80% of the labor force. If the exports of oil continue to increase and take off in the world market, it will affect much of the workers in the primary product sector, especially those who work with oil. These workers' incomes will go up, since they will be selling more goods to outside countries, and these workers can then send their children to school or provide them with vaccines, increasing economic development in the country and bringing Chad up out of its developing nation status. Although Chad makes most of its money out of this one agricultural/ primary products sector, which makes them a developing nation, they are working on increasing their world standing and GDP, which they could then use to modernize Chad and build up its industrial sector, bringing it to developed.
High Rates of Population Growth and Dependency Burdens
Population Growth (annual %)
Child Dependency Ratio (%)
Old Age Dependency Ratio (%)
Chad's high rate of population growth, especially compared to other developed nations, at 2.6% (annually), helps add to the high child dependency ration, the percentage of people that are non-productive under the age of 15, expressed as a percentage of those of working age, and low old age dependency ratio, the percentage of those that are non-productive over the age of 65 divided by the percentage of the population that are of ages 15 to 64. The high child dependency ratio of 87.4% indicates that Chad has a high crude birth rate, the annual number of live births per 1,000 people born of the population. This shows that adults, fathers, and mothers, in Chad have to support a much larger proportion of children than the work force in developed countries need to support. Therefore, families cannot save large amounts of money to allow for development, but rather have to spend their income on the children and support them. A low old age dependency ratio of 5.5%, shows Chad's low life expectancy, which helps distinguish Chad's inadequate standards of living and overall status as a developing country.
Diversity Among Developing Countries
1. Resource Endowment
It is usually assumed that most developing countries are poorly endowed with resources, both physical and human. However, in Chad, this is not the case. Physical endowment in Chad is extremely high in oil, since they discovered oil in 2000 and developed an industry in 2003 onwards. It is easy to think that now Chad has plenty of oil, that it will automatically do better off and raise its developing nation status to a developed one. However, the government of Chad needs to make the best decisions for its economy and people, and not be corrupt and sign oil deals with officials who will fill the government's, not the country's pocket. It cannot always be assumed that developing countries are poorly endowed with resources, they just may not have been discovered yet.
2. Historical Background
The majority of developing nations in Africa were once colonies of developed countries for major periods of time. This is true of Chad, who was a colony of France until 1960 when they were granted their independence. This colonization may have hurt Chad because they didn't establish a government and set economy of their own until after France was gone. If France had worked on developing Chad instead of stripping its resources and claiming the territory for itself, Chad quite possibly could be a developed country with a high standard of living and strong economy.
3. Per Capita Income Levels
Per capita at purchasing power parity, the total of all economic activity in a nation divided by the total number of the population, attempts to equate the purchasing power of currencies in different countries. Chad's per capita income is $1,360 (current international $) (World Bank). While a low GDP per capita at PPP is standard for developing nations, Chad has one of the lowest GDP per capita at PPP in the world. This shows that people in Chad have very little income, if they are even able to work. Such a small income means that Chadians are unable to save their money because the need to spend it immediately to help their families and pay corrupt leaders and other necessary measures. Saving money would help Chadians out of the poverty cycle because they would be able to afford to send their children to school and provide better sanitation, water, clothes, vaccines and shelter. These would lead to economic development because a better education and health can lead to increased life expectancy and increased productivity, which would also help with economic growth, and would increase the standard of living within the country. However, Chad's low incomes do not allow for this poverty cycle to be broken, so Chad remains a developing nation.
1. Resource Endowment
It is usually assumed that most developing countries are poorly endowed with resources, both physical and human. However, in Chad, this is not the case. Physical endowment in Chad is extremely high in oil, since they discovered oil in 2000 and developed an industry in 2003 onwards. It is easy to think that now Chad has plenty of oil, that it will automatically do better off and raise its developing nation status to a developed one. However, the government of Chad needs to make the best decisions for its economy and people, and not be corrupt and sign oil deals with officials who will fill the government's, not the country's pocket. It cannot always be assumed that developing countries are poorly endowed with resources, they just may not have been discovered yet.
2. Historical Background
The majority of developing nations in Africa were once colonies of developed countries for major periods of time. This is true of Chad, who was a colony of France until 1960 when they were granted their independence. This colonization may have hurt Chad because they didn't establish a government and set economy of their own until after France was gone. If France had worked on developing Chad instead of stripping its resources and claiming the territory for itself, Chad quite possibly could be a developed country with a high standard of living and strong economy.
3. Per Capita Income Levels
Per capita at purchasing power parity, the total of all economic activity in a nation divided by the total number of the population, attempts to equate the purchasing power of currencies in different countries. Chad's per capita income is $1,360 (current international $) (World Bank). While a low GDP per capita at PPP is standard for developing nations, Chad has one of the lowest GDP per capita at PPP in the world. This shows that people in Chad have very little income, if they are even able to work. Such a small income means that Chadians are unable to save their money because the need to spend it immediately to help their families and pay corrupt leaders and other necessary measures. Saving money would help Chadians out of the poverty cycle because they would be able to afford to send their children to school and provide better sanitation, water, clothes, vaccines and shelter. These would lead to economic development because a better education and health can lead to increased life expectancy and increased productivity, which would also help with economic growth, and would increase the standard of living within the country. However, Chad's low incomes do not allow for this poverty cycle to be broken, so Chad remains a developing nation.
Growth versus Development
In Chad, similar to the rest of the world, there is a distinction between growth and development. Economic growth is the increase in a country's real output per year in the economy. Economic development, however, is an increase in personal freedoms and standards of living for the people of Chad. Development includes factors such as education, sanitation, infrastructure and healthcare. Chad is growing at present, shown by the growth of GDP from $8,540,674,846 in 2010 to $9,485,741,541 in 2011 (World Bank). It is important to note that there are fluctuations, though, in Chad's GDP since it experienced a dramatic decrease in GDP from 2008 to 2009 from $8,357,142,857 to $7,084,745,763 (World Bank).
While an increase in GDP means economic growth, not all of this economic growth is being converted into economic development and being used to help the citizens of Chad. An increase in GDP should mean that the government collects more in tax revenue and should consequencely be able to provide more essential services to its citizens such as education and sanitation. However, this all relies on whether the government decides to spend that gained revenue on those services to help their country out or to pocket that money. The fact that the government is not doing everything in their power to develop Chad is shown through Chad's low HDI of 0.328, which places Chad in the low development category (World Bank). However, some areas concerning economic development are improving as a result of the increase in economic growth despite the low HDP and super corrupt government. For example, Chad has improved its rural population with access to water from 40% in 1998 to 44% in 2012 (World Bank). This not only helps people become healthier, but by allowing people to waste less time walking to find water and transporting it so they can spend more time on education and learning of healthy living, which will increase development and continue to benefit all Chadians. Life expectancy in Chad has also increase from previous years and is now 49.8 years (World Bank). This shows that the Chadian government is taking at least some of the GDP growth and using it to provide health and education to its citizens, since people are receiving better health care, living healthier lives and living longer lives. In order for Chad to increase its economic development, more of the monetary gains from Chad's economic growth needs to be utilized in providing necessary services for the people of Chad and less for the selfish greed of Chad's corrupt government.
In Chad, similar to the rest of the world, there is a distinction between growth and development. Economic growth is the increase in a country's real output per year in the economy. Economic development, however, is an increase in personal freedoms and standards of living for the people of Chad. Development includes factors such as education, sanitation, infrastructure and healthcare. Chad is growing at present, shown by the growth of GDP from $8,540,674,846 in 2010 to $9,485,741,541 in 2011 (World Bank). It is important to note that there are fluctuations, though, in Chad's GDP since it experienced a dramatic decrease in GDP from 2008 to 2009 from $8,357,142,857 to $7,084,745,763 (World Bank).
While an increase in GDP means economic growth, not all of this economic growth is being converted into economic development and being used to help the citizens of Chad. An increase in GDP should mean that the government collects more in tax revenue and should consequencely be able to provide more essential services to its citizens such as education and sanitation. However, this all relies on whether the government decides to spend that gained revenue on those services to help their country out or to pocket that money. The fact that the government is not doing everything in their power to develop Chad is shown through Chad's low HDI of 0.328, which places Chad in the low development category (World Bank). However, some areas concerning economic development are improving as a result of the increase in economic growth despite the low HDP and super corrupt government. For example, Chad has improved its rural population with access to water from 40% in 1998 to 44% in 2012 (World Bank). This not only helps people become healthier, but by allowing people to waste less time walking to find water and transporting it so they can spend more time on education and learning of healthy living, which will increase development and continue to benefit all Chadians. Life expectancy in Chad has also increase from previous years and is now 49.8 years (World Bank). This shows that the Chadian government is taking at least some of the GDP growth and using it to provide health and education to its citizens, since people are receiving better health care, living healthier lives and living longer lives. In order for Chad to increase its economic development, more of the monetary gains from Chad's economic growth needs to be utilized in providing necessary services for the people of Chad and less for the selfish greed of Chad's corrupt government.