The Standard of living is the level of material goods, wealth, necessities, and comfort available to a particular socioeconomic group, mostly a nation.
It includes factors like poverty rate, income, employment availability, and quality, Gross Domestic Product, political and economic stability, national economic growth, house affordability and quality, the expectancy of life, quality of education, and whether available (International Labour Organization. “Global Employment Trends for Youth 2013.”). Living standards are linked to the quality of life. It is signified by the (GDP) Gross Domestic Product per capita which is the division country’s gross domestic product by its entire population. GDP is the sum of output services and goods generated in one year by everybody in that country. In this paper am going to describe the levels of economic growth of various countries regarding their living standards and policies responsible for that growth (The World Bank. “World DataBank).
Classification of Countries According to Their Level of Economic Growth and Living Standards.
GDP per capita is the key element in quantifying the living standards of different countries. It enables us to classify nations into low-, middle-, or high-income groups (Nobelprize.org. “The Prize in Economics 1987).
Also called economically challenged countries. Are the ones with $1,025 GDP per capita in a year. These earn 1% of the world’s income total but they represent only 18.5% of the population globally (Nobelprize.org. “The Prize in Economics 1987). Examples include: Zimbabwe, Eritrea, Burundi, Liberia, Niger, Madagascar, Malawi, and Afghanistan
Sometimes called East Asian Tigers. The GDP per capita of these countries ranges between $1,025 to $12,475 per year. Middle-income countries earn 32% of the income although they just represent 69.5% of the total global population. They are from Thailand. South Korea, Malaysia, China, Singapore, and Indonesia (Redvers 2012)
High Income Nations
Their per capita GDP per year in most cases above $12,475. They get 68% of the world’s income but represent only 12% of the population globally (Smith &Todaro,2011). They include the following; Europe, the United States, and Japan
Problems Relating to the Policies of Growth Associated with High-Income Country, Focus of Major Public Policies Responsible for Addressing the Problems.
High-Income Country Growth Policies.
For these countries, the challenges to the growth of their economy are the attempt to continually push for a greater number of educated individuals who can design, invest, and use advanced technologies, thus the ambition of their civic procedures that are growth-oriented is to move their supply aggregate curves towards the right (International Monetary & Fund Financial Surveys, 2013). The major community plans aimed at meeting this goal are financial policies concentrated on assets, amongst investing in physical equipment and plant, human capital, and technology. They consequently know that growing economically works best in a climate that is market-oriented economically and stable. Because of this, they apply the policy of money in keeping inflation stable and low, in minimizing the risk of fluctuations in exchange rates, and giving courage to international and domestic competition (International Monetary & Fund Financial Surveys, 2013).
Middle-Income Countries Growth Policies
Physical and human capital, technology, together with the inventiveness of a market-based economic setting, demonstrated a capable growth stimulant (The World Bank. “World DataBank). These countries face problems like government legacy of economic control that can be removed only at a slow pace. In most of them, the financial and banking sectors are regulated heavily. The government has also selected some industries to get loans of low interest and government subsidies. The economies have realized that an increment in market-oriented motives for workers and firms adds value to faster growth (International Labour Organization. “Global Employment Trends for Youth 2013).
Growth Policies for Low-Income Countries
Most of these economies don’t have the legal, economic stability, and market-orientated organizations necessary for a productive ground for their growth in the domestic economy and attraction of foreign investment. World Bank is set to fight poverty and increase the levels of income in these countries by 2030, however political instability hinders this achievement. The low-income economies are at a downside since any income received is immediately spent on basic needs like food (Nobelprize.org. “The Prize in Economics 1987). Failure to save leads to a lack of accumulation of capital and funds that can be loaned for investment in human and physical capital.