Epilogue to the article about economic development of Islamic countries (13)

Then the article describes developing country economics:

“Economists have long theorized about the economics of developing countries, how their situation differs from developed countries and how they may best achieve development.

Various development stages are described for the developing economy such as moving from subsistence agriculture, the building of transportation and other social infrastructure, and the developing of export revenue to finance capital imports.

The rate of growth that can be achieved is determined by the amount of savings – the surplus of income over consumption.

These savings can then be used for investment in physical capital.

Over riding this is a constraint imposed by the balance of payments – the surplus of exports over imports.

Additional factors such as the natural resource endowment, constraints due to climate and population as well as the institutional environment may also have an impact.

This may define a certain income growth potential associated with a region or nation state.”