Economic development is an increase in per capita income and changes towards modernization. The changes towards modernization are an improvement in pro- ductivity, institutions and attitudes and a reduction in poverty, economic inequality and unemployment. Economic development is a positive economic growth plus a socioeconomic modernization. It is simply economic growth plus modern positive social change.

A rise in the real income per head is still the best available indicator of economic development. But the per capita income is not the only indicator. Other indicators are a maximum level of productivity, reduction in poverty, increase in economic equality, high rate of employment, and modernized economic attitudes, insti- tutions and structures.

There are some distinctions between economic growth and economic devel- opment.

Economic growth emphasizes an increase in the quantity of commodities and in the national income. On the other hand, economic development empha- sizes an increase in the quality of commodities produced in the country. Economic growth emphasizes an increase in the national product. Economic development emphasizes per capita income.

Economic growth does not empha- size equitable distribution of commodities. Economic development emphasizes equitable distribution of commodities among the people. Economic growth does not emphasize the transformation of the economy from primary to secondary production. Economic development emphasizes the transfor- mation of the economy from primary to secondary production. Economic growth does not emphasize economic equality and a reduction in poverty. Economic development emphasizes economic equality and a reduction in poverty.

Economic growth does not emphasize an increase in the quality of socioeconomic structures and attitudes. Economic development emphasizes an increase in the quality of socioeconomic structures and attitudes. And economic growth can occur without economic development. Economic development has economic growth as one of its major steps or economic growth is a forerunner to economic devel- opment.

Economies are classified into two broad categories, namely, developed economies and the underdeveloped economies. The developed economies refer to those economically and technologically advanced countries such as the United States, Britain, Japan, France, Canada, Russia and Germany. The underdeveloped economies refer to those States that have poor technology, low per capita income and low standard of living. Sometimes, they are called the developing economies. Examples are most countries in Africa, Asia and Latin America.

The first feature of developing economies is low income per head. The gross na- tional product may be high but if the income per head is low, this becomes a fea- ture of underdevelopment.

Secondly, a low level of savings and investment exists in developing economies. A low income per head leads to low savings, for it is difficult for people to save out of a very low income. Since savings generate investment, there will also be a low in- vestment.

Thirdly, there is a low level of technology in developing economies. The technology used for production is old, and perhaps obsolescent. There is lack of modern methods and techniques of production. And this results in low productivity. So, there is a problem of low productivity in agriculture and industries. This is partly because there is outdated and obsolete technology that results in the production of small quantities of commodities.

Fourthly, there is a high rate of illiteracy in developing economies. There are a few people who are able to read and write. The majority of the people will be able to read and write in order to usher in modernization and development.

Fifthly, there is the absence of developed large markets in developing economies. There are not only small markets for the commodities but also the markets are not well modernized and developed. A small market militates against economic devel- opment.

Sixthly, there is the dependence on one or few export crops in developing economies. There is lack of diversification of the economy or there is a mono- economy, an economy dependent on one sector, especially agricultural or primary sector.

Seventhly, there is a lack of infrastructure in developing economies. Inadequate good roads, railways, airways, telephone systems and internet are collectively the features of economic underdevelopment.

Eighthly, there is, all in all, a low standard of living in developing economies. The majority of people have malnutrition, poor health and poor environmental sani- tation. Economic planning is a deliberate making of economic policies aimed at equitable allocation of resources in order to increase the rate of economic development.

Eco- nomic planning is a conscious design of government that describes the various fis- cal and monetary policies that will lead to rapid economic growth if they are exe- cuted. Every economic planning is more or less bringing the economy to the influ- ence and control of the government.

There are distinctive aims and objectives of a systematic economic planning. It is designed to create more employment opportunities for the people. It is aimed at promoting a steady rate of economic growth. It helps in even and equitable distri- bution of income among the people. It helps the government to allocate resources to different sectors of the economy. It helps to prevent inflation and achieve stable prices. It helps to reduce economic dependence on foreign countries. It is aimed at increasing both the gross national product (GNP) and per capita income.

Economic plan is of different types. Comprehensive plan is a plan which sets its targets to cover all the major sectors of the national economy. Partial plan is a plan that covers only some sectors of the national economy such as industry and agri- culture only. Authoritarian plan is a plan that covers all aspects of the economy but is formulated and executed by the central government only. Authoritarian plan is commonly found in a socialist economy. Democratic plan is a plan in which a gov- ernment tries to create conditions that will prevent economic instability through the use of monetary, fiscal and foreign trade policies. It differs from authoritarian plan because the government uses a set of incentives to prevent the economy from straying from a desired path, and is not aimed at government control of all the pro- ductive units in the economy. Democratic plan is found in a capitalist economy.

There are sterling problems of economic planning in most developing economies. There are not adequate qualified workers and experts who can carry out the projects stated in the plan. There is an unnecessary dependence on foreign aids. Most of the times, the foreign aids expected from friendly countries and bodies may not come. Most economic plans are not based on adequate and reliable data, for such data is not available in most developing economies and this makes the implementation of the plans difficult. There are unnecessary changes in govern- ment which lead to the abandonment of some development plans. And there is mismanagement and embezzlement of the money set aside for the execution of the plan.

Poverty is a challenge of economic development. Poverty is the state of having little money with which to buy one’s basic needs like food, clothing and shelter. It mani- fests in different forms in developing economies including joblessness, over in- debtedness, economic dependence, lack of freedom, inability to provide basic needs of life, lack of access to credit, inability to save and own assets, and infection with severe disease.

There are distinctive factors that cause poverty. There are high corruption and much mismanagement in most developing economies. There is not only the mis- management of the vast natural resources by corrupt leaders, but also the embez- zlement of the money set aside for the execution of poverty alleviation pro- grammes.

Poverty has some devastating effects. It results in an increase in crime rate. It leads to frustration, and frustration may lead to much crimes. It increases civil unrests such as riots. If people are hungry, they are likely to be angry and this may make them engage in actions inimical to societal laws and order.

Acquired immune deficiency syndrome is a challenge of economic development. There is now no cure for AIDS, but an antiretroviral treatment can slow the course of the disease and lead to a near-normal life expectancy. AIDS is now a pandemic, a disease actively spreading in the developing economies. Despite the efforts of most developing economies in combating the disease, AIDS has continued to ravage the working population.

The effects of AIDS are frustrating. It brings about low agricultural productivity. The AIDS-infected people contribute little or nothing to agricultural output. They lack concentration because of the stigma associated with the disease. They are avoided by coworkers and colleagues. The government employs the money it would have used for developmental purposes to buy expensive antiretroviral drugs for the victims.

Corruption is a challenge of economic development. Corruption is the abuse of public office for private gain. It includes vices like bribery, fraud and other related offences. It is also found in the award of contracts, promotion of staff, dispen- sation of justice, misuse of public offices and embezzlement of public funds. Developing economies have the reputation of having the most corrupt govern- ments in the world. Until corruption is drastically reduced, developing economies cannot achieve their economic potentials in spite of their abundant natural and human resources.

The causes of corruption are multidimensional. Most people in most developing economies are greedy and have flamboyant lifestyle. They delve into corrupt prac- tices to feed their lifestyle. Most civil servants are not well paid. This makes them get involved in accepting petty bribes and embezzling public funds in order to aug- ment their poor salaries.

The governments in developing economies are unable to make harsh laws against corrupt practices. Worst of all, they have been unable to enforce the existing anti- corruption laws because the political institutions are weak. Corruption has a high propensity to thrive when political and legal institutions are not strong.

Corruption has numerous effects. Most leaders embezzle the money that would have been used to build infrastructures and provide more social amenities. This is the reason why there are many bad roads, poor electricity supply, and lack of safe drinking water in most developing economies.

There is less direct foreign investment because the investors are scared of fraud- sters in most developing economies. Investors are reluctant to invest in economies where there is a high rate of corruption. It is believed by the international commu- nity that the money lent or donated to the developing economies for develop- mental purposes will be embezzled by their corrupt leaders.

Brain drain is a challenge of economic development. Brain drain is a form of neo- colonialism in which capable specialists and clever people in the developing economies migrate to the developed economies in search of a greener pasture.

In the recent times, the emigration of scientific and technical personnel from the developing economies to the United States, Britain, Canada, France, Germany, Spain and Italy has assumed in large proportion. It is widely believed that the urge to earn more money is the reason why technical and scientific professionals are ‘checking out.’

This might be true to an extent considering that the technicians and scientists in developing economies are underpaid. This underpayment becomes more obvious when their salaries are compared to those of their counterparts in the developed economies. The developed economies allegedly entice them away by offers of fan- tastic salaries. They were not only enticed away from their countries by offers of high salary in the developed economies, but sometimes they willingly go to the developed economies to find and enjoy a greener pasture.

Lack of infrastructural facilities like sophisticated implements and tools in the workplaces prevents these professionals from realizing their best selves in the developing economies. This sets a motion of mass exodus of technicians and spe- cialists to the developed economies so that they can practise well what they have studied, using well-equipped laboratories and tools.

Until all these are realized, developing economies are likely to remain a mere train- ing ground where people stop over for a while and learn what they can before mi- grating to the greener pasture.

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