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| QUICK REVIEW 39-1 |
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- About three-fourths of the world's population
lives in the DVCs of Africa
Asia
and Latin America.
- Natural resource scarcities and inhospitable
climates restrict economic growth in many DVCs.
- Most of the poorest DVCs are characterized by
overpopulation
high unemployment rates
underemployment
and low labor productivity.
- Low saving rates
capital flight
weak
infrastructures
and lack of investors impair capital accumulationin many DVCs.
- Sociocultural and institutional factors are often
serious impediments to growth in DVCs.
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| QUICK REVIEW 39-2 |
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- Governments of the DVCs may encourage growth by
(a) providing law and order
(b) taking the lead in establishing enterprises
(c)
improving the infrastructure
(d) forcing higher levels of saving and investing
and (e)
resolving social-institutional problems.
- The IACs can assist the DVCs through expanded
trade
foreign aid
and private capital flows.
- Many DVCs have large external debts which have
become an additional obstacle to growth.
- A decline in foreign aid to DVCs and an increase
in private capital flows (particularly direct investment) have characterized the 1990s.
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