Developed and Less Developed Countries: Understanding the Differences and Why it Matters

Developed or less developed countries are classified based on a complex interplay of economic, social, and political factors. According to the United Nations, this classification reflects their basic economic conditions. Understanding the differences between developed and less developed countries is essential for fostering empathy, promoting global cooperation, and working towards a more equitable world. Learn about economic and social indicators and challenges and how to use this knowledge to create more sustainable development and a more inclusive and prosperous world for all. (Estimated reading time: 10 minutes)

“What separates developing countries from developed countries is as much a gap in knowledge as a gap in resources.”

– A. P. J. Abdul Kalam

Embarking on a voyage to a new country is an exhilarating and transformative experience. A new destination opens our eyes to worlds with different landscapes, systems, customs, and people who are foreign yet familiar.

Stumbling through conversations and cultural differences can uncover the true beauty of uncharted places. Hidden gems are not just physical landmarks or tourist attractions but rather the essence of the land itself—its people, their stories, and the connections we form with them.

To be a responsible and conscious traveler, it’s important to get a sense of the country you are visiting, given the rising income inequality in our world. In today’s globalized world, the disparity between developed and less developed countries is more evident than ever.

While some nations can boast technological advancement and high living standards, others struggle to meet even the most basic needs of their populations. Understanding the difference between these two categories is not just a matter of geography but of socio-economic factors that shape the fate of nations.

On my recent trip to Cairo, Egypt, I was able to view the city through the lens of a conscious traveler. Sprawled across the fertile Nile River, this historic city has much more to offer than the Pyramids of Giza or historical artifacts and mummies. From the deliciously spiced Koshari to the hospitality of the locals, I walked away with heartwarming memories.

As my car whizzed past the streets, however, I couldn’t help but compare the infrastructure and quality of life for many locals to the more developed areas where I’ve spent most of my life.  

I sometimes felt like I had entered a time capsule—cars dating back to the 1970s, old, dusty, run-down buildings, and stray dogs wandering the busy streets. Yet, somehow, the locals find novelty and joy in the rhythm of daily life.

This stark reality does not diminish the city’s beauty and charm. The joyous sparkle in the honey-hued eyes of the children who play on the streets speaks to their spirit of hope for a better tomorrow where opportunities abound.

As tourists, we can make that a reality. We should not only consume but also do our best to contribute to their nation, whether that be with our wallets or through raising awareness about inequity.

By shedding light on these disparities in economic and social conditions, we can broaden other’s perspectives and foster a deeper understanding of the challenges less developed countries face on their path to progress. 

A foundational knowledge of the great divide between developed and less developed countries is a key starting point for the quest to create a more equal and just world.

What are developed and less developed countries?

Organizations like the United Nations (U.N.) and the World Bank have created a classification system to group nations based on their level of development. This is not only for analysis of a country’s overall health, but to allow certain countries to benefit from foreign aid if they need it.

While several economic metrics like GDP, Human Development Index (HDI), and Gross National Income (GNI) can be used, the U.N. gauges the health of world nations by dividing them into two main groups: developed and less developed.

A developed country, also known as a high-income country, is a sovereign state with a high level of economic development, quality of life, and advanced technological infrastructure compared to other countries. These countries are characterized by high per capita income, strong health care systems, advanced industrialization, and a high Human Development Index —  a statistical composite index of life expectancy, education, and per capita income indicators.

Some examples of developed countries are Australia, Belgium, Canada, France, Germany, Japan, the United States, and the United Kingdom.

Less developed or developing countries are nations with an underdeveloped industrial base, lower living standards, and low Human Development Index (HDI) relative to other nations. However, the term “developing” does not indicate stagnation, as many developing countries experience progress and rapid growth but still lag behind compared to developed nations. 

Some examples of less developed countries are Brazil, India, Indonesia, Mexico, Thailand, Turkey, Croatia, and Kenya.

General features

Developed country

• There are few disruptions in the population, with moderate migration and minimal birth and death rates.
• There is a high level of participation in the workforce, and labor markets are open with little discrimination.
• The minimum wage is set at a high level.
• The GNI per capita is high.
• Education, healthcare, and urbanization are at high levels, and there is access to food and clean drinking water.
• There are a variety of industries, with well-developed manufacturing and service sectors, and a somewhat modest agricultural sector.
• The economy consistently experiences growth rates ranging from 2% to 4%.
• There is little to no extreme poverty, although relative poverty exists.

Less developed country

• The population is decreasing, with high levels of migration and mortality, especially among infants.
• The level of labor involvement varies greatly, with most cases being subsistence economies and unregulated labor markets.
• There is a low or nonexistent minimum wage.
• The economy lacks diversification, with the agricultural sector dominating and underdeveloped or nonexistent manufacturing and service sectors in terms of income, although they may provide employment.
• GDP growth rates are low, and there is a high risk of recession.
• There is a high level of poverty.
• Education and healthcare are poor.
• Access to clean drinking water is limited.
• Urbanization is increasing, with a growing number of big cities.

Economic and social indicators of development

Examining the development in countries based on economic and social indicators will help us understand the strengths and challenges of each type.

Economic indicators

Developed countries

Developed countries are characterized by their high GDP per capita, robust infrastructure, and advanced industries. These nations have achieved significant economic growth and stability, allowing them to provide their citizens with a high standard of living. One of the primary economic indicators of a developed country is a high GDP per capita, which reflects the average income generated per person within its borders.

Additionally, developed countries typically have well-established financial systems, strong consumer markets, and access to capital for investment. They attract global investors and are often home to multinational corporations, further contributing to their economic prosperity. These nations also tend to have a highly skilled and educated workforce, which enables them to excel in knowledge-based industries, technology and innovation.

It’s important to note that economic indicators alone do not provide a complete picture of a country’s development. Social indicators also play a crucial role in understanding the overall well-being of its population.

Less developed countries (or developing countries)

Developing countries, on the other hand, face different economic realities. These nations often have lower GDP per capita compared to developed countries, reflecting their lower average income levels. The economic development of developing countries is frequently hindered by factors such as limited access to capital, inadequate infrastructure, and reliance on primary industries.

Many developing countries struggle to garner foreign investment and lack the necessary infrastructure for economic growth. Limited access to capital and financial services further slows their development, making investing in industries and promoting entrepreneurship difficult. These nations also face challenges in diversifying their economies, as they rely heavily on primary industries such as agriculture or natural resource extraction.

However, not all developing countries face the same economic challenges. Some developing nations (commonly called emerging economies), have experienced rapid economic growth and are on the path to becoming developed countries. These nations have implemented effective monetary policies, attracted foreign investment, and diversified their economies.

Social indicators

Developed countries

In addition to economic indicators, developed countries boast high social indicators that reflect the quality of life within their borders. These indicators include literacy rates, access to education, healthcare systems, and social welfare programs. Developed countries strongly emphasize education and have high literacy rates, ensuring their citizens have the necessary skills and knowledge to thrive in a knowledge-driven economy.

Developed countries have healthcare systems that provide accessible and quality healthcare services to their populations. These nations invest in research and development, leading to medical advancements and longer life expectancies. They often have comprehensive social welfare programs that support their citizens in need, like unemployment benefits, healthcare coverage, and pensions.

The combination of strong economic and social indicators contributes to the overall high standard of living in developed countries. Yet, the road to development is not without its challenges.

Less developed countries (or developing countries)

Social indicators in developing countries often highlight the existing gaps in education, healthcare, and social well-being. Access to education is a critical challenge in many developing countries, with high illiteracy rates and limited educational opportunities. This lack of education hinders human capital development and perpetuates cycles of poverty.

Healthcare systems in developing countries often struggle to provide adequate services, resulting in lower life expectancies and higher infant mortality rates. Limited access to clean water, sanitation facilities, and healthcare infrastructure further exacerbates the health disparities in these nations.

Social welfare programs in developing countries are often underdeveloped or nonexistent, leaving vulnerable populations without the necessary support systems. This lack of social safety net can perpetuate inequality and hinder efforts to lift people out of poverty.

Challenges faced by developed and less developed countries

Despite their economic and social advancements, developed countries face their own set of challenges. One significant challenge is maintaining sustainable economic growth in the face of increasing globalization and competition. As emerging economies grow and become more competitive, developed countries must continuously innovate and adapt to remain at the forefront of global markets.

Developed countries often grapple with issues such as income inequality and an aging population. While the overall wealth and standard of living may be high, these nations must address disparities and ensure equitable distribution of resources. An aging population poses challenges for healthcare and pension systems as the dependency ratio increases and strains social welfare programs.

Less developed countries, on the other hand, face a myriad of challenges specific to their path to development. One of the primary challenges is poverty eradication and reducing income inequality. Many developing countries have a significant portion of their population living in poverty, with limited access to basic necessities like food, clean water, and sanitation. Breaking the cycle of poverty requires targeted interventions and investment in education, healthcare, and infrastructure.

Additionally, less developed countries often face political instability, corruption, and weak governance, which can hinder economic growth and social progress. These nations must address these challenges to create an enabling environment for development.

Why understanding the differences between developing and less developed countries matters

Understanding the differences both types of countries is essential for fostering empathy, promoting global cooperation, and working towards a more equitable world.

The great divide between these two categories is shaped by a complex interplay of economic, social, and political factors.

There are three critical reasons why we need to reduce income inequality, particularly in less developed countries:

• Inequality prevents growth and poverty reduction.
• Inequality can undermine specific types of collective decision-making efforts in social, civic, and political life.
• Inequality can inhibit the political process, resulting in inept economic policies that negatively impact human development, growth, and poverty reduction efforts.

By delving into the economic and social indicators, challenges, and potential strategies, we gain a deeper appreciation for the unique circumstances faced by each category of nations. We can broaden our perspectives and foster a deeper understanding of the challenges less developed countries face on their path to progress.

We can bridge the gap through targeted efforts, international collaboration, and a commitment to sustainable development to create a more inclusive and prosperous world for all.

The impact of globalization on developed and developing countries

Globalization has had a profound impact on both developed and less developed countries. For developed countries, globalization has provided access to new markets, cheaper labor, and increased opportunities for trade and investment. However, it has also led to job displacement and increased competition from emerging economies.

Less developed countries, on the other hand, have experienced both opportunities and challenges due to globalization. Global trade has provided them with access to markets and increased foreign investment. However, it has also exposed them to economic volatility and dependence on international markets.

Strategies for bridging the gap between developed and less developed countries

Bridging the gap between developed and less developed countries requires a multi-faceted approach. It starts with addressing economic disparities through targeted infrastructure, education, and healthcare investment. Developing countries must diversify their economies and promote entrepreneurship to create sustainable and inclusive growth.

International cooperation and support play a crucial role in bridging the gap. Developed countries can provide aid, technology transfer, and capacity-building support to developing nations. Fair trade practices and policies promoting inclusivity and sustainability can also help create a more level playing field.

The real wealth of a country is found in the hearts of the people who live there. Locals who exude warmth, hospitality, and contentment in their lives and relationships are rich regardless of how developed their nation is. They inspire us to create an inner wealth that no financial prosperity can ever replace – and that is where the real treasure lies.

All my best on you journey,

Seline

Questions for you: What has your experience been in developed and less developed countries? How does it compare to the place you live or have lived in?

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