Hello Tramalho,

Welcome to English forums.

Classification of countries into developed and developing countries can be tricky. By most accepted measures, most western European countries, U.S., Canada, Australia and Japan would belong to the league of developed nations. These rankings are based on two parameters: GDP and GNI per capita (PC). But these may not give us an accurate picture.

It could be one or all of the following reasons:

(1) "Do-it-yourself" tasks aren't considered while calculating GDP as they cannot be recorded. These tasks include home care, cooking, gardening, etc. In less-developed economies, this can account for a big chunk of economic activity, whereas in highly developed economies, its contribution is minimal.

(2) In developing countries, a lot of economic activity can go unreported, leading to what's called "underground" or "black" economy. Earnings from an unreported second job, your payments in cash to your cleaner or gardener, purchasing undervalued or smuggled goods can contribute to the country's underground economy. In developed economies, it's estimated to be anywhere between 5 - 10% of GDP, whereas in developing and underdeveloping economies, this can be significantly higher--as high as 60% of GDP, as it was once in Russia.

(3) When newspapers in the U.S. report that Indian software programmers are ready to work for as less as one-eighth of what an American worker is paid, a commoner would either be outraged at how "low-cost" laborers are snatching away American jobs or pity at the sorry state of India as its workers are ready to work for such a low pay.

He doesn't realize that the newspapers are reporting the nominal figures and not the "real" figures adjusted for purchasing power parity (PPP). One-eighth of, say $6000, amounts to $750; after currency conversion it's about 32,000 Indian Rupees, which is a handsome salary that could buy you a lot of things in India and let you enjoy a good, if not great, standard of living. Put it this way, the equivalent of US$1 can buy you a good meal there, whereas in the U.S. it can only buy you a soda or something from the dollar menu at McDonalds.

Ranked in the order of GDP, China and India, seen by many as the developing giants, are at 6th and 11th positions. However, at PPP GDP, they vroom to second and fourth positions respectively.

China occupies a lowly 135th position at a GNI PC of US$940, and India fares worse at 159th position with US$480. When adjusted for PPP, China's GNI PC rises to 4,390 international dollars placing it at 125th position, and India's rises to 2,570 international dollars bettering its ranking to 145. Compare these with that of the first-ranked tiny nation-state Luxembourg with a GNI PC of 51,060 international dollars.

From the above figures (World Bank, 2003), it can be concluded that while China and India are doing good in producing goods and services, the effect hasn't really trickled down to the poorest of its people.

I'll write on human development and how it affects development later if I have time.