Problem Faced By Developing Countries

Problem Faced by Developing Countries

PRIMARY EDUCATION IN DEVELOPING ECONOMIES:

Introduction:

Developing countries are faced with the problem of low economic development, high levels of poverty, very low GDP levels, low income per capita and economic backwardness, these can be attributed to the high illiteracy levels, poverty which causes them to be poor and this is as a result of the poverty vicious cycle, low adoption of science and technology in these countries.

The current situation in these countries can be changed through radical changes in the education system whereby economies should invest in education to reduce the illiteracy levels; this will in turn increase the levels of human capital in the country.

The education fact sheet 2006 states that the number of children who are enrolled in primary education all over the world amount to 682 million, however 77 million children all over the world are not enrolled in primary education.

Investing in primary education is a very costly government undertaking, it requires high levels of investment whose rate of return to the economy is very low, however in the long run investment in education will bear high economic growth, this is as a result of returns on investment in

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Problem Faced by Developing Countries

human capital.

A Country such as Japan is one of the largest economies in the world, it developed from a less developed country to a developed economy, and its advancement is attributed to the high levels of technological advancement as a result of extensive research. Research and technological advancement is achieved through education.

Zambia on the other hand had a strong economy, after the decline in copper prices the economy was at crisis, however the country cut down on spending on primary schools, this resulted into the current situation in the Zambian economy, Zambia today is ranked as one of the poorest economies in the world.

ARGUMENT FOR PRIMARY EDUCATION:

Human capital development:

The theory of human capital development was developed by Becker (1964), other scholars such as Schultz (1960) have supported the human capital development theory, and an increase in education levels in an economy will result into the development of human resource resulting to economic development in the long run.

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Problem Faced by Developing Countries

This theory depict that when investment in education is undertaken then this will provide skills to the population who will be capable of working in high and middle occupation opportunities in the economy, these occupations in the economy will eventually lead to economic growth.

This theory can also be associated with the work of classical economist who depicted that economic development can be achieved through capital accumulation, capital accumulation can be also associated with the development of human capital in the economy and therefore investing in education will lead to economic development.

Education and productivity and earnings:

Mince and Schultz (1974) developed a model that associated education levels and earnings; they developed a model that explained earnings of individuals and the time period attended in school, the model depicted that the higher the number of years in school then the higher the level of individual earnings.

Education investment will increase the literacy levels of developing countries, since many developing countries are agricultural countries a study made on these countries proved that an increased investment in education will lead to improvement in agricultural productivity.

Education will also increase the level of skills to the entire population; the increased skills in the labor force will result into an increase in labor productivity, therefore it is the role of the

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Problem Faced by Developing Countries

government to invest in primary education.

Education and economic development:

The Solow’s (1956) model which associated the relationship between economic development and education and technological advancement, the model considered education as human capital and also technological advancement as exogenous variables, however later scholars developed a model that depicted the relationship between GDP, human capital and technological advancement.

These model developed by Solow (1956) clearly depicts that developing countries can experience economic development, therefore governments should invest in primary education in order to experience growth in the economy.

Reduction of poverty and income distribution:

Investing in primary education in developing countries will lead to an improvement in income distribution and at the same time poverty reduction, developed countries have a large percentage of the population living under the poverty level, parents therefore do not have enough to sustain their family and therefore they cannot afford school fees, therefore through primary education investment children will attend school and therefore give them opportunities to acquire high paying jobs reducing poverty.

Education provision to children from these poor families will have the opportunity to access high paying job and this will break the poverty vicious cycle, this will reduce poverty levels in an economy and also solve the problem of inequality.

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Problem Faced by Developing Countries

Theoretical evidence of this can also be associated with the study done on east African countries by Knight and Sabot (1990), they confirm the possibility of poverty reduction and improvement in income distribution through education investment and improvement of illiteracy levels.

Opportunity for higher education:

Investing in primary education will increase the number of children attending primary school, this is because many children do not attend school due to lack of funds, when investing in primary education it gives children the opportunity to advance in education levels to higher levels of education levels.

Therefore governments should invest in education so as to give the more opportunities for advancement to higher levels of learning; this will improve the levels of human capital and skills of labor in the economy which will lead to improved productivity in the economy.

ARGUMENTS AGAINST PRIMARY EDUCATION:

Developed countries investment levels:

Despite high levels of GDP and economic development in developed countries, they have not invested in primary education; they have high levels of GDP compared to developing countries, therefore it would not be a good policy to developing countries that have low levels of GDP and per capita income.

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Problem Faced by Developing Countries

Diverting priorities:

Investing in education will distort the priorities of the government; this will result into an increase in spending in public goods, in developing countries there are those spending policies that are very crucial in economic development such as infrastructure and investing in education will result into diversion of funds from other important projects.

Government deficits:

Developing countries run government deficits in their budgets, an increased spending will either mean an increase in borrowed funds or taxation, when funds are obtained from international loans then the debt problem will increase putting the countries economy to more difficult situations, if the primary education that result into deficit and it is funded through taxation, then these will result into increased taxation to offset this balance, this will mean that there will be an increased burden to tax payers and also inflation in the entire economy.

Evidence in developed countries:

Developed countries despite having invested in primary education, they report that there are no significant changes in economic development, therefore the same case may apply to developing countries, it does not necessarily mean that investing in primary education will result into economic development.

Other inherent problems:

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Investing in primary education is one issue while provision of quality and ensuring attendance is another issue, therefore it is important to note that a large amount of funds may be invested in education but this will have no significance to economic development, it is therefore important to formulate policies that ensure attendance and the quality of education in primary schools.

Cost of education:

Investing in education in developing countries is very expensive, investing means investing in infrastructure, employing more teachers so as the quality of education is increased, the new teachers will add to the annual budget of government spending, therefore investing in education will lead to more problems on funds and government budgets which would have been used to develop more productive projects.

Free market:

Investing in education will mean interfering with the free market economy in developing countries, according to classical economist the market should not be interfered with but the government policies should only be used to steer the economy in the right direction, in developing countries there are private primary schools that provide education, investing in education will mean that the free market will be interfered with and the cost of primary education will be zero.

The free market is a situation whereby the price of goods and services are determined by the demand and supply, therefore through subsidizing education costs will result in a distortion in the market of the developing country.

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Problem Faced by Developing Countries

Evidence of development through education in Zambia:

Zambia is a developing country and it is termed as one of the poorest countries in the world, despite its previous economic performance which depended on copper export, the country today is at crisis.

Zambia gained independence in the year 1964, at this time it had a strong economy that dependent on copper mining whose reserves were enormous at the time in the country, however in 1970’s the price of copper declined and the Zambian economy exhausted its foreign reserves and also run fiscal deficits in following years.

The country borrowed loans from the IMF and the world banks and the country was forced to undertake structural condition that were required by these organizations, this included devaluation of the currency, increasing agricultural products and freezing wages in the public sector.

By 1985 the state of the economy worsened and the country opted to join free trade organizations and laying off workers in the public sector was evident in order to reduce fiscal deficits and trade balances.

After these crisis the Zambian government did not invest more in primary education, it cut down its spending on primary education, the current situation in the country is that the economy is ranked one of the poorest country in the world.

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Problem Faced by Developing Countries

Education in Japan:

Japan is a developed country and it is ranked the second largest economy in the world in terms of it’s GDP per capita, Japan has a good economic performance track record because after world war two it suffered a lot of destruction and in 1952 it was referred to as a less developing country but from the ruins of war it developed to become one of the largest economies in the world, it now the first country to develop from a less developed to a developed economy.

After in 1952 Japan initiated investment in education, today it is a leading economy in terms of technology, medical research and machinery, the countries movement from a less developed country to a developed country was as a result of extensive investment in research and technological advancement through education. Therefore developing economies should invest in education which will aid in technological advancement which as a result will lead to economic development.

Conclusion:

Investment in developing countries should be undertaken, investing in human capital is a long term strategy that will lead to economic development, reduction in poverty levels and inequality and at the same time it provides labor with more skills in that they become more productive in the economy.

Theories of human capital have prove that an increase in the level of education will reduce illiteracy levels which will in turn result into improvement in human capita leading to economic development, therefore there is need to invest in education in developing countries so that to improve the current situation in the economy.

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Problem Faced by Developing Countries

From the examples of Zambia and Japan it is evident that investing in education is major determinant of economic performance, Zambia had a strong economic base due to copper mining in the country, however after the prices for copper declined and resources were deprived the country was in crisis, despite all this the country did not invest in primary education instead it cut down on spending on primary schools, today it is rankled one of the poorest country in the world with very low per capita income and high inequality levels.

Japan on the hand advanced due to technological advancement, this was achieved through investment in education especially primary education, Japan is now the first country to move from a less developed country to a developed country, also it is the second largest economy in the world. Governments should initiate strategies like those that Japan undertook in the early years of development, investing in research and technological advancement is a major determinant of the future of an economy.

However investing in primary school education will result into an increase in government spending, investing in primary education is a very costly government undertaking, it requires high levels of investment whose rate of return to the economy is very low, however in the long run investment in education will bear high economic growth, this is as a result of returns on investment in human capital. Primary education should however require that proper teaching and follow up is undertaken, governments should undertake quality checks to ensure this investment is not a waste.

References:

Appleton S and Teal F (1999) ‘Human Capital and Economic Development’ Economic Research Paper No 39 African Development bank

Benn ell P. (1995) ‘Using and Abusing Rates of Return: A Critique of the World Bank’s 1995

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Education Sector Review institution of development studies working paper no.22

Blaug M. (1970) an Introduction to the Economics of Education Penguin

Hough, J (1993) ‘Educational cost-Benefit analysis’ Education Research Paper No 2

Overseas Development Administration www.dfid.gov.uk/pubs/files/edcostandanedpaper02.pdf

Methods, Human Capital Development and Operations Policy Working Paper No 63 work bank

Psacharopoulos G. and Patrinos A. (2002) ‘Returns to investment in education: A further update’ World Bank Policy Research paper no 2881

http://econ.worldbank.org/files/18081_wps2881.pdf

Schultz, T. (1998) ‘the formation of human Capital and the Economic Development of Africa: Returns to Health and Schooling investments’ Economic Research Paper no 37. African Development bank.

Wikipedia the free encyclopedia (2007) Japan history and economy, retrieved on 9th August, available at

www.en.wikipedia.org/wiki/Japan

Wikipedia the free encyclopedia (2007) Zambia history and economy, retrieved on 9th August, available at

www.en.wikipedia.org/wiki/Zambia

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