Economic growth and development

When talking about the positive expectations for an increase in the rate of economic growth in the coming years, many people come to mind that this is an indicator of an improvement in their living conditions, whether in the form of an increase in wages or an improvement and development of services provided by the state. However, an improvement in living conditions is not only associated with an increase in growth, but rather includes... Also, economic development represents a broader vision of economic development that goes beyond the mere increase in gross domestic product, and extends to improving the standard of living of individuals, achieving social justice, and preserving the environment. There is a big difference between economic growth and economic development.

First: Economic growth:

Economic growth is defined as a process in which real income increases over a long period of time such that this increase exceeds the growth rate of population. This includes providing productive and social services, protecting renewable resources from pollution, and preserving non-renewable resources from depletion.

Economic growth can be measured as a percentage increase in real GDP. It can also be measured according to the nominal value of GDP or according to data on gross national income.

Economic growth has a multiplier effect, leading to increased profits, investments, income and job creation. This is why governments aim to achieve positive growth rates to improve their economic conditions and increase the level of well-being of citizens.

Economic growth can be achieved through the discovery of new resources or the creation of new technologies or other capital goods.

Second: Economic development:

Economic development is defined as the process of society moving from its current situation to a better situation, through comprehensive, radical change in various aspects of economic, social and cultural life.

Economic development includes improving the standard of living of individuals, achieving social justice, and protecting the environment. It also seeks to develop various economic sectors, such as: education, health, infrastructure, and technology. Economic development is one of the main goals of governments in developing countries, as they seek to achieve it through implementing policies and programs aimed at raising the standard of living and improving the quality of life for citizens.

Characteristics of economic development:

Economic development is characterized by a set of characteristics, which are as follows:

  • Orientation towards achieving development goals: Economic development seeks to achieve specific goals, such as increasing productivity, improving the standard of living, achieving social justice, and protecting the environment.
  • Interest in improving the internal environment: Economic development focuses on improving the internal environment of society, such as education, health, infrastructure, and technology.
  • Ensure the use of limited resources: Economic development seeks to use the limited resources available efficiently and effectively to achieve its goals.
  • Taking advantage of technology: Economic development depends on modern technology, in order to improve productivity and efficiency and raise the standard of living.
  • Reliance on own efforts: Economic development depends on the community's own efforts, through participation in planning and implementation.

Economic development goals:

There are many goals for economic development that the state seeks to achieve. The most important of these goals are the following:

  1. Increasing national income: This is through increasing the gross domestic product and increasing the personal income of individuals.
  2. Investing in natural resources: This is done by exploiting the available economic resources efficiently and effectively, in order to achieve high rates of economic growth.
  3. Capital support: by providing the necessary financing for investment and stimulating saving.
  4. Interest in trade exchange: This is through enhancing trade between countries and opening new markets for national products.
  5. Addressing administrative corruption: by establishing strict laws and legislation, and enhancing transparency and accountability.
  6. External debt management: This is done by finding appropriate solutions to repay debts, and ensuring that debt accumulation does not reoccur in the future.

Economic development requirements:

Economic development requires a set of requirements, including:

  • Planning and providing data: This is done by developing a comprehensive development plan and providing the data and information necessary to make decisions.
  • Providing the necessary capabilities: This is through providing the human, material and financial resources necessary for development.
  • Stability and security: This is to ensure the continuity of development and the achievement of its goals.
  • Spreading awareness and a culture of development: to motivate society to participate in development.

An example of achieving economic development in light of scarcity of natural resources: Japan is an example of achieving economic development in light of scarcity of natural resources, as Japan suffers from scarcity of natural resources, but it was able to achieve high rates of economic growth, by focusing on high-technology industries, Developing education and training, and enhancing international cooperation.

Economic development indicators:

Any country goes through a set of economic fluctuations, which affect the level of economic activity, and these fluctuations may negatively reflect on the levels of production, supply, demand, and prices. Therefore, having a set of tools to measure economic performance is essential to assess the economic situation of the country and make appropriate decisions to promote development. Economic indicators are known as a set of economic statistics and reports that are used to measure the performance of different economic sectors. These indicators are used to measure and evaluate economic performance, predict the state of the economy in the future, and build economic development plans.

The most important indicators of economic development are the following:

Gross Domestic Product (GDP):

Gross domestic product is considered one of the most important economic indicators, as it reflects the size of the country's overall economy. GDP is defined as the total value of goods and services produced within a country's borders during a given period of time, regardless of ownership of these goods and services.

aFor gross national product (GNP):

Gross National Product is defined as the total value of goods and services produced inside and outside a country during a given period of time. The gross national product differs from the gross domestic product in that it includes the value of goods and services produced outside the country by the country's citizens.

Economic growth rate:

Economic growth rate is defined as the percentage increase in real GDP over a given period of time. The economic growth rate is used to measure the long-term performance of the economy.

Inflation rate:

The inflation rate is defined as the percentage increase in prices over a certain period of time. The inflation rate is used to measure the price level in the economy.

Unemployment rate:

The unemployment rate is defined as the ratio of the working and unemployed population to the total working population. The unemployment rate is used to measure the level of employment in the economy.

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