Living Standard of Developing Countries

Introduction

Higher incomes are one of the indicators that reflect a rising standard of living. However, there are many other factors that contribute to the improvement of living standards for people in a given area. A significant factor related to living standards is education, as it is a key driver for a high standard of living within a community. Education enhances the productivity of the workforce and increases individuals' ability to enjoy a better and more luxurious life. Another crucial factor contributing to a better living standard is employment. Securing a job provides a substantial income and opportunities for skill acquisition and personal development. Collectively, working, obtaining jobs, and increasing income contribute significantly to the overall enhancement of living standards within a society. It is often the wealthier members of society who have the opportunity to contribute due to their higher income levels, whereas those with lower incomes face challenges in contributing to societal welfare because they lack the financial means to purchase quality goods and services.

Living Standards in Developing Countries

Developing countries are generally those with historically low income and living standards. Examples of developing countries in Asia include Afghanistan, Bangladesh, India, Pakistan, and Sri Lanka, where people often experience a poor standard of living. These countries typically have a low gross national product (GNP) and gross national income (GNI) per capita. They are in the slow process of achieving development and are heavily dependent on the agricultural sector, which forms the backbone of their economies and contributes a significant share to their GNI. Recently, these countries have initiated industrialization efforts to boost their economies, but it may take several decades for them to be recognized as developed nations or first-world countries. According to the World Bank, countries are categorized based on their GNI into three groups: developed countries (first-world), developing countries (second-world), and underdeveloped countries (third-world), which are further classified into low, middle, and high-income countries. Most countries fall into the low-income or middle-income groups, with only a few in the high-income category (World Bank, 2020).

To better understand the living standards of developing countries, it is essential to recognize that in this modern era of technology, the world is becoming increasingly globalized. Globalization integrates countries economically, culturally, and socially. This system of globalization includes free trade, allowing countries to exchange goods and services across borders, facilitating imports and exports. As a result, people in democratic countries strive to elect leaders who can make effective decisions for the benefit of their citizens. Over time, even low-income countries can become self-sufficient through free trade. Developing countries aim to utilize their most efficient resources, and those involved in free trade can reap maximum benefits. A prime example of free trade is observed in the European Union, where countries engage in trade without restrictions, leading to rapid increases in GNI and continuous improvements in living standards (European Union, 2021).

Conclusion

As a result of free trade among these countries, prices decrease due to the absence of trade taxes, enhancing people's purchasing power. Consequently, employment rises, increasing the income of employed individuals, which in turn leads to higher rates of economic growth for countries engaged in free trade, ultimately resulting in rising living standards (Smith, 2022). It is crucial for developing countries to continue fostering economic policies that support education, employment, and international trade to improve their citizens' quality of life and achieve sustainable development.

References

European Union. (2021). The impact of free trade on economic growth and living standards. Retrieved from https://europa.eu/impact-free-trade

Smith, J. (2022). Globalization and economic growth in developing countries. Journal of Economic Perspectives, 36(2), 45-67.

World Bank. (2020). World Development Indicators. Retrieved from https://data.worldbank.org/indicator