Development Acceleration - A Practical Methodology
62 Pages Posted: 17 Mar 2021 Last revised: 7 May 2021
Date Written: January 31, 2021
Motivated by my assignments with international Socio-Economic development institutions, and accredited scholarly associations, I developed a thirst to design a practical model to accelerate the pace of development of the third world nations. The prime Economic classification of the nations are "Developed or Developing or Under developed". In the history, we are yet to see a country in the developing and under-developed category, moving upward into a developed status. This stagnated condition of the world nations was correctly identified and questioned by the Nobel Laureate in Economics (1979), Sir. Arthur Lewis (1915-1991) as ”Is the dependence of the developing country world growth on that of the developed - world inevitable ?".
Development is found to be directly related to the savings among domestic households. Saving in turn, depends of the cost of essentials needs, namely Food, Shelter and Clothing. People migrate towards nations providing a saving platform. Nations should attract the Domestic savings, and use for development.
This calls for an approach to the investment of domestic saving and technology-skill tie-up chains. Also a current trend among the developing nations is to attract foreign multinational investment in their nations with many economic incentives. This is another form of dependence and tie-up with profit oriented corporate units, providing only large volume employment and without any mandatory commitment to upgrade the domestic techno-commercial and economic infrastructure. This also warrants a domestication approach to reduce the dependence on external tie-ups. A review of the seven sequential steps of corporate operations confirm a Closed Cycle Economics, operating in all the nations, irrespective of their political pattern, and controlled by three resource dimensions. In each of these steps, these three components are existing in different forms, This cycle controls and monitors the Domestic consumption, Domestic investments, the economic indicators and hence the GDP.
With these thoughts as a basis for discussion, the need for a new dimensional approach was exposed to a team of 14 diversified, but critically responsible persons in different nations, committed and working towards an accelerated Socio-Economic development. Based on all these approaches, this Geometric model is developed.
This model using Geometry to the faculty of Economic Science, attempts to make this linkage more eternal than inevitable. This needs a multi-lateral approach to boost the domestic savings to support domestic investments, and to improve the quality of domestic human potential to man the domestic technology. Both these should be maintained and monitored by the optimum infrastructure mix. Techno-commercial systems assist to reduce the effects of these constraints, develop the technology, and optimise the resource utilisation. This model is developed in the form of two intersecting circles, one linking the domestic savings with the domestic investments, and the other linking the domestic human potential with the domestic technology. The former represents the external entrepreneurial activity, designated as "Exogenous", and the latter involving internal productive activity, designated as "Endogenous". A geometric approach is used to solve these two intersecting circles, aiming towards the central objectives of integrating the Exogenous and Endogenous aspects. This will upgrade the socio-economic status, and enlarge the qualitative and quantitative outputs. The inference derived from the geometric solution indicate that, the attempts to accelerate the pace of socio-economic development should be to encourage equal efforts in both the domestic investments through domestic savings, and utilisation of domestic skills for the domestic technology, updating towards the latest in the world developments. Any attempt to upgrade the existing Endogenous aspect only or Exogenous aspect only, is bound to create an unfavourable disturbance in this synchronisation. The qualitative and quantitative dimensions of the economy could be improved by expanding the operating dimensions in the Endogenous and Exogenous aspects, in equal magnitude. The past and current experiences of the developing and the developed world, support this model solution.
The unit for the measure for development is “saving” by each household, including the lowest wage earner group (labour class). The Basic needs are Food (including water and milk), Clothing and Shelter. If the average monthly earnings of each household can buy their basic needs and there is a saving, it is an indicator of a developed nation. If they cannot buy their basic needs, it is a Developing nation, If the basic need items are available, it is an under developed nation. The developing and under developed nations should concentrate on the continued availability of basic needs and their monthly cost should be lesser than the average monthly earnings of every household. Attractive incentive should be provided to invest the domestic savings in Banks and Government bonds and they should be used for Domestic development projects.
Keywords: Acceleration, Bi-circular Model, Decision Methodology, Developed, Developing, Domestic, Economic Development, Econometric Model, Geometric Model, Investment, Management, Manpower, Productivity, Savings, Social, Development, Socio-Economic Development, Technology, Under Developed
JEL Classification: A13, B41, B46, C51, C52, C61, C67, D78, D84, F43, M21, M33, O11, P27
Suggested Citation: Suggested Citation