Economic Theory of 3rd World Country

Bangladesh is a third world country with an estimated income per capita of more than $1,500 (Gillan, 2010, p. 6). In recent years, the country has been experiencing a good and sustainable economic growth rate of 6-7 % (Gillan, 2010, p. 13). It should be known that economic theory is the substantiation and explanation of various economic aspects. As a matter of fact, it is an accepted knowledge that tries to come up with a good set of phenomena.

Consumerism is a very important economic theory in the current developing world. The theory tries to acknowledge the fact that an increase in the consumption of goods and services in an economy can enhance the rate of economic growth and development (Gillan, 2010, p. 9). In this case, it tries to explain that any increase in consumption will create a positive demand for various goods and services in an economy.

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In a broad perspective, the theory of consumerism has been used by various countries to enhance economic development. As a matter of fact, Bangladesh has witnessed a good economic growth rate because of an increase in consumer demand for various products (Gillan, 2010, p. 17). As much as half of the country’s GDP comes from the service sector, the agricultural sector employs half of Bangladeshis.

The country receives a lot of remittances from abroad and this has been its major source of foreign exchange earnings. As a matter of fact, the country exports various textiles and garments and this has also given it a lot of foreign exchange earnings (Gillan, 2010, p. 21). In extreme cases, it should be known that Bangladesh has been developing because of a good economic environment. As a matter of fact, the country has a good and sound financial environment that enhances the growth of businesses.

As much as the theory of consumerism greatly applies to Bangladesh, the rate of foreign direct investments has not been impressive as expected. It should be known that the country has a rich and vast human resource base that will continue to enhance its economic growth rate. Because of a vast and rapid economic growth rate, there have been a lot of improvements in infrastructure development to support various economic sectors (Gillan, 2010, p. 34).

China is a first world country with a rapid economic growth rate. As a matter of fact, the country is the world’s second largest economy. In addition, the country prides itself as the world’s fastest growing economy (Phang, 2010, p. 11). This is as far as average growth rates are concerned. In this case, it has been having an economic growth rate of 10 % (Phang, 2010, p. 17).

Because the theory of consumerism promotes the consumption of goods and services, it should be known that China has a very large population that creates a large market base for its goods and services. In this case, its population of more than 1 billion people has been instrumental in enhancing the consumption of goods and services (Phang, 2010, p. 17). Currently, the country is the world’s largest exporter.

Chinas labor force is currently estimated to be more than 813.5 million (Phang, 2010, p. 18). As a matter of fact, 42% of the country’s GDP comes from the industrial sector. On the other hand, agriculture absorbs 39.5% of the country’s labor force (Phang, 2010, p. 21). This is despite the fact that it contributes 10.6% of the country’s GDP (Phang, 2010, p. 25). China has various industries that have contributed to its economic growth rate. Some of these major industries include mining and ore processing, ornaments, chemicals, electronics, automobiles and other equipments.

As far as economic growth is concerned, a country should be able to stimulate demand. This will end up increasing the rate of consumption for various goods and services. Both economies have been growing because of an increase in consumption. This can be explained from the fact that various industries have been growing because of an increase in the demand of goods and services.

Reference list

Gillan, A. (2010). From Bangladesh to Brick Lane. London: The Guardian.

Phang, S. (2010). China Overtakes Japan as World’s Second-Biggest Economy. Harvard: Harvard University press.

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