Opinion Piece

What is "development" anyway?

Bnamericas Published: Thursday, December 20, 2012

A number of countries throughout Latin America have their eyes on the prize of being considered a "developed" country. What exactly does this status, which so far has been elusive in the region, entail?

The International Monetary Fund's (IMF) World Economic Outlook divides the world into two major groups: advanced economies, and emerging market and developing economies. However, "this classification is not based on strict criteria, economic or otherwise, and it has evolved over time," the IMF says. "The objective is to facilitate analysis by providing a reasonably meaningful method of organizing data."

One of the most straightforward ways to measure development is via a country's per capita GDP. Chile's finance minister Felipe Larraín has pegged that watermark at US$22,000. As such, figures from the CIA Factbook show that a few countries in Latin America are on their way to reaching "development." With an estimated 2011 GDP per capita (purchasing power parity) of US$17,700, Argentina leads the list, followed by Chile (US$17,400), Uruguay (US$15,100) and Mexico (US$14,700). Coming in fifth and sixth place but much further down the GDP ladder are Venezuela (US$12,600) and Brazil (US$11,800).

However, as Ecuador's President Rafael Correa noted earlier this year, measuring developing countries' success on their level of per-capita GDP is not practical in a region like Latin America due to inequalities between rich and poor. Taking into account the level of abject poverty in some countries in the region, few would argue that this stance is without merit.

Other factors that can be looked at include the country's degree of industrialization. From a more human perspective, financial and economic stability can lead to increased education and literacy levels, improved nutrition, health and hospital services, or expanded basic services like potable water, wastewater treatment and electricity. In summary, an overall better standard of living that results in higher life expectancy and lower infant mortality.

Perhaps a more just form of measurement is the UN Development Program's Human Development Index (HDI), which measures four indicators - life expectancy, the mean years of schooling and expected years of schooling, and gross national income per capita - all within three dimensions: health, education and living standards. Perusal of the HDI table shows that Chile and Argentina are considered within the group of "very high human development," while Uruguay, Cuba, Mexico, Panama, Costa Rica, Peru, Ecuador, Brazil, Colombia and Belize are in the "high human development" category.

According to a publication from the Cambridge University Press, growth is a prerequisite for development, but development can involve much more than growth.

Development can be used fairly interchangeably with modernization. And according to Cambridge, ideals related to modernization include planning for development, overall increases in per capita and per worker production, more efficient institutions and attitudes that can lead to higher productivity, and increased social discipline. With regard to the last of these, government needs to be able to impose certain obligations on citizens in order to attain developmental goals.

Some economists also argue that environmental concerns must also be taken into consideration when evaluating economic growth.

Thinking of the wider definition of "development," then, those of us who live in Latin America know that the region has plenty of room for improvement. However, if achieving these factors can lead to per capita GDP of US$22,000, then let's get there sooner rather than later.

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