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Summary Article: developing world
from The Hutchinson Unabridged Encyclopedia with Atlas and Weather Guide

Those countries that have low or middle incomes per capita and are less developed, in terms of industrialization, service sectors, infrastructure, education, and health, than the world's advanced, or developed, countries. In 2011, the International Monetary Fund (IMF) classified 35 countries as having advanced economies. These lay chiefly in Europe (25), Asia (5), North America (2), and Australia, Israel, and New Zealand, and had 15% of the world's population but 52% of world GDP. Developing countries comprise more than 150 countries in the world and have 85% of global population and 48% of world GDP. They predominate in Africa, Latin America, the Caribbean, Asia and Oceania, and eastern Europe.

Developing countries vary greatly in levels of income and economic and political development. No single definition is recognized internationally: for example, the World Trade Organization (WTO) allows countries to decide themselves whether they are ‘developed’ or ‘developing’. The United Nations (UN) classifies over 40 developing countries – that is, those with particularly low standards of living and socio-economic development (such as life expectancy, literacy, employment levels) – as less economically developed countries (LEDCs) or least developed countries (LDCs). At the other end of the scale there are developing countries which are undergoing rapid economic growth and are classed as newly industrialized countries (NICs). These include some of the world's most populous countries: Brazil, China, India, Mexico, and Turkey. From the early 1970s, developing countries began to to act together in confronting the powerful industrialized countries over such matters as the level of prices of primary products, with the nations regarding themselves as a group that had been exploited in the past by the developed nations and that had a right to catch up with them. Countries that adopted a position of political neutrality towards the major powers, whether poor or wealthy, are known as non-aligned movement.

Many development studies have referred to developing countries as ‘the South’, and to developed and industrialized nations as ‘the North’, because most developing nations are in the southern hemisphere and most industrialized nations are in the northern hemisphere. Developing countries are themselves divided into low income, or LDCs, such as Angola, Sudan, Bangladesh, and Myanmar; middle-income countries, such as Nigeria, Indonesia, and Bolivia; and upper-middle-income countries, such as Brazil, Malaysia, and South Africa. In 1990, the developing world had 75% of the world's population but consumed only 20% of its resources, and average income per head of population in the northern hemisphere was 18 times higher than that in the southern hemisphere. In the 1990s the developing world increased its global share of merchandise exports by 17%, most of the share being in office and electronic equipment, particularly from Mexico, China, and East Asia. However, the exports of the majority of least-developed countries were still confined to primary commodities (cash crops and unprocessed minerals), for which growth was slow and unpredictable.

After 2000 the rapid economic growth of the large NICs, particularly Brazil, China, and India, increased developing countries' share in the world economy. This process was accelerated by the global financial crisis from 2008, which badly affected the advanced economies. A structural transformation in the global economy was underway and forecasts suggested that the developing countries and NICs would account for 60% of world GDP by 2030. Nevertheless, in 2010 the richest 20% of the world's population accounted for 75% of global income, whereas the poorest 40% accounted for only 5%, and 800 million people in the developing world were seriously undernourished, with many living on less than $1 a day.

Problems of the developing world Despite enormous differences in history, geography, social structure, and culture, countries of the developing world have the following characteristics in common: their modern industrial sectors are relatively undeveloped; they are mainly producers of primary commodities, which are affected by adverse weather conditions; their primary commodities are produced for Western industrialized countries, and are subject to fluctuations in supply and demand; and their populations are poor and chiefly engaged in agriculture. Other problems associated with developing countries include high population growth and mortality rates; poor educational and health facilities; high levels of underemployment and, in some cases, political instability. Countries of the developing world, led by the Arab oil-exporting countries, account for over 75% of all arms imports.

Economies of the developing world Until the 1990s the economic performance of developing countries was mixed, with sub-Saharan Africa remaining in serious difficulties and others, as in Asia, making significant progress.

In South East Asia the four so-called ‘dragons’ of Hong Kong, South Korea, Singapore, and Taiwan developed to such an extent that they were known as newly industrialized countries (NICs) in the 1980s and 1990s and are today classified by the IMF as advanced economies, with per-capita incomes comparable to many Western industrialized states. China, Indonesia, Malaysia, the Philippines, and Thailand are also developing quickly as NICs, along with Argentina, Brazil, Chile, Mexico, Peru, Russia, South Africa, and Turkey.

By 2000, merchandise exports in the developing world rose to 27% of the world total. For the first time, electronic and office goods accounted for a larger share of total exports than agricultural or mining commodities. This trend continued in 2000–10. However, the exports of the majority of low-income countries remained confined to a few primary commodities. And some countries involved in military conflict, such as Afghanistan and Somalia, saw exports fall to levels below that of the 1970s.

Debt Failure by many developing countries to meet their enormous foreign debt obligations has led to stringent terms being imposed on loans by industrialized countries, as well as rescheduling of loans (deferring payment). In 1996 the World Bank and International Monetary Fund (IMF) launched the Heavily-Indebted Poor Countries (HIPC) initiative to reduce the debts of low income countries, in particular the interest being paid on debts. The 1999 Cologne Debt Initiative (or HIPC2) by members of the Group of Eight (G8) industrialized countries aimed to speed up debt relief, in order to release funds for fighting poverty rather than debt servicing (paying the interest). In December 1999, the UK government announced that it was to cancel debts owed to it by the world's heavily-indebted poor countries. By April 2001, 22 low-income developing nations were receiving debt relief of some $20 billion under the HIPC initiatives. Supported by the ‘Make Poverty History’ campaign, further debt relief initiatives were agreed at the 2005 G8 summit in Scotland and there was evidence that, in countries such as Burkina Faso, Tanzania, and Zambia, the savings on debt payments were being used to increase investment in education and health.

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