Problems Hindering Economic Development

Wednesday, July 29, 2020

Economic Development is concerned with the structure of the society's economy and the methods of production of goods and services. Another aspect of development of economy is the development of social and demographic attributes/characteristics.
Economic Development is a dynamic process i.e. continuous process not a static one.
In the way of economic development obstacles generally arrive, which can be studied in detail under five heads:-

Environmental Factors

Severe Climatic Conditions

Climatic Condition plays a very important role in economic development of any region. Hence the region where climatic conditions are mild, favours the development of economy because the utilisation of resources/movement of people and goods became very easy throughout the year which in turn increase the economic activities.
However, in other regions where climate is harsh/severe like Siberian Region of Russia hinders the movement and sustainability of human life, hence the economic activities also get hindered which results into lesser economic development.

Low Natural Resource Endowment

Resources are needed for the economic development and the resources should also be easily accessible. So, that they can be utilised easily for economic development.
Switzerland lack in natural resources which hinders it's growth. But Switzerland became capable in developing it's economy mainly through tourism and service sector.

Unavailability of Land Resources

There are some countries in the world which has very less land available for economic activities. These are mainly in form of deserts, mountains, rugged terrain or land covered with ice sheets, make them impossible to be utilised for economic activities and development.
Example:- Sahara Region (Africa).

Environmental Fragility (Disaster Prone)

Regions which are affected by environmental fragility or likely to face disaster are not very much favourable for economic development. 
North-Bihar (India) is flood prone region which restricts any kind of permanent economic activities in the region, hence this region has very less level of economic development.

Historical Factors

Political Instability

Regions such as Iraq, Syria, Afghanistan are facing political and military instability from decades and even centuries, which made them unfavourable and unattractive for companies, hence economic development get hindered.


India and many faced the wrath of colonialism by British, France and other imperial governments which looted colonies through their negative trade policies, which  favoured these imperial nations and colonies became capital deficient which leads to decline in economic development.

Economic Factors 

Economic factors such as economic policy which affects the economic development the most. As good economic policies attract investment in form of capital and technology which helps in economic development.
But when the economic factors of a country are weak, it takes that country into a vicious cycle, which creates capital deficiency in the economy which leads into down sizing of the market which create poor infrastructure and hence unbalanced economy which is followed by lower productivity in the economy which ultimately leads to low demand, low saving and low investment and hence low economic development.

Social and Demographic Factors

Over Population

Over population in an economy leads to increase in unemployment and rise indin the number of dependent population. Which leads to very low economic development due to very low savings and investment. 


Regions of high Emigration especially if skilled labour emigration causes dampness in the economy hence lesser economic development is observed in such regions.

Low Educational and Health Services

Regions where educational and healthcare infrastructure is not so strong healthcare infrastructure is also not strong in turn leads to wastage of human resources which results into low economic development. 

Unskilled Workforce

For high economic growth skilled workforce is very much essential as it increases productivity and innovation. It is evident from various examples across the world. 

Social Taboos

In orthodox countries like India, Arabian countries and many other countries various kinds of Taboos are present which hinders economic development. One of such taboos is 'Women should not go out for work' Specially inn India and other Muslim countries in which women are not allowed to work or socially it is unacceptable. In these countries almost half of the population become dependent and remains underutilized and put a lot of strain on economy and prevent it's development.

Scientific and Technological Development

Technological and Scientific development tends to rapid growth in economic development due to enhanced productivity as well as new and innovative product whose market value is much higher which leads into exponential growth in the economy.
Many countries have proved this aspect true, two of such countries worth mention are:-
  • Israel:- Mostly covered by deserts but made Agriculture possible by technological advancement in agriculture region. It also progressed much in the defence production and supplying arms/weapons to many countries including India.
  • Japan:- Despite of the fact that Japan lacks natural resources and faced damages done by nuclear bombs exploded by USA during world War II,  Japan became a developed nation only because of their hardwork, technological  advancement and innovative scientific Research.