Economic and Social Development | Civics Form Three

People having a meeting
Development is the improvement of countries economic and social conditions.

Types of Development

1.   Economic development
Economic growth is an increase in the production of economic goods and services, compared from one period of time to another.
2.   Social development
Social development is about improving the well-being of every individual in society so they can reach their full potential. Social development is accompanied by good transport and communication services, health services, education, provision of water and electricity.

Levels of Development

1.   Individual level
Individual development level refers to the increase of material well-being of a person like a good house, car and clothes.
2.   National level
National development level refers to the improvement in social, economic, cultural and political affairs of a community or country.
Indicators of Economic Growth
Indicators of economic development are also known as measurements or criteria for testing the degree of economic development of a country. The following are indicators of economic growth:
1.   High Per Capita Income
Per capita income measures the average income earned per person in a given area in a specified year. It is calculated by dividing the area's total income by its total population. USA is a developed country because of having high per capita income of about 150 Millions Tanzanian Shillings.
2.   High life expectancy
Life expectancy is the average number of years newborn babies can be expected to live if health conditions stay the same. Japan is a developed country, it has high life expectancy of about 81 years.
3.   High number of literate people
In developed countries, many people know how to read and write. This is due to availability of schools and parents are able to educate their children. Many people are literate in The United Kingdom.
4.   Presence of employment opportunities
In developed countries, more people are employed. 90% of graduates in Germany got employed every year.
5.   Good health services
Developed countries have better access to health care. There are better hospitals equipped with qualified doctors. Canada is among countries with better health care.
6.   Good housing conditions
Developed countries, have a good house conditions. Construction focuses on people's safety and accessibility. Australia is an example of countries with good housing conditions.

Factors for Economic Development

1.   Land
Land provides space where production can take place. Activities such as: trade, agriculture, mining and many others require land.
Advantages of land
-      It produce raw materials which are used in industries.
-      It produce food.
-      It give employment to people.
-      It provide pasture to livestock
-      It provide a place where people live.
2.   Labour
Labour is physical or mental work, also labour can mean people who are working. In order for development to come, labors are needed. For example, in an industry, they need labor to get production done.
Advantages of labor
-      It utilizes other natural resources that are available in production. Without labor, land and capital cannot be used.
-      It apply knowledge in production.
3.   Capital
Capital is used to help produce other materials. Examples of capital are, money, tools, machines and buildings. Capital increases the productivity of land and labour. For example, money is used to purchase goods for further production.
Advantages of capital
-      It help in starting a business.
-      It help business owner to get loan.
-      It help in time of financial crises.
4.   Infrastructure
Infrastructure includes roads, railways, schools, electricity, telephones, water and others. Infrastructure is important for economic development. For example the goods produced have to be transported from the production place to the marketing area using roads and railway.

Advantages of infrastructures

-      It help transportation of goods from production area to market.
-      Mobile phones are important to reduce movement of labor during the marketing process.
5.   Technology
Technology helps people to make different materials. Technology helps people in improving agriculture, transportation and business systems. Technology simplifies life.
Advantages of technology
-      It increase production of goods.
-      It improve different economic activities like agriculture and transportation.
6.   Education
Education is very important in the production process, because it reduces the expenditure on the foreign labour. Through education, we get our engineers, doctors, teachers and other workers.
Advantages of education
-      It reduce expenditure on foreign labor.
-      It improve efficient of labor.
7.   Good governance
The government is responsible to see that there is peace in the country so that people perform their duties harmoniously. If there is no political stability in the country, the level of production will decrease. The government establishes policies that will favor people to invest. The government should encourage people to participate in economic activities by supporting them financially. The government must enact good policies which will favor the workers in terms of good salaries and a favorable working environment.
Advantages of government
-      It prepare good policies for economic development.
-      It protect its people so as to be comfortable in production.

Financial institutions

Financial institutions are organizations that process monetary transactions, including business and private loans, customer deposits, and investments. Example of financial institutions are: Banks and insurance companies.

Role of financial institutions in economic development

1.   They provide loans
Financial institutions provide loans to the public. Loans provided help in starting business and other production activities.
2.   They create employment opportunities
Many people are employed in financial institutions. For example, Many Tanzanians are employed at: CRDB, NMB and NBC bank.
3.   They give business education
Financial institutions educate their customers. For example, before they give loans their clients, they educate them.
4.   They participate in other development project
They participate in building settlement and commercial house like what can be observed from NSSF, LAPLF, and NIC.
5.   They provide material support to special group
Provision of material support, reduce special groups problems. They assist orphans, people living with HIV/AIDS, disabled and many others.
6.   They maintain the value of money
Maintaining value of money is done by the Central Bank (BOT) by checking inflation which is dangerous to businessmen and women who operate on loans.

The Role of Government in Economic Development

1.   It help farmers
Government help farmers by providing: pesticides, fertilizers and equipment such as sprayers, hoes and power tillers in rural areas. Also it encourages farmers to join cooperative societies and gives them loans.
2.   The government encourages society to have a culture of saving and investing
The culture of saving and investing is good because it contributes to economic growth. People who do not save cannot invest because of lack of money.
3.   It provide social services
Different social services like health, water, electricity, education, transport and communication are provided by the government.
4.   It promote political stability
The government is making sure there is peace in the country. Availability of peace help people to conduct their activities calmly and bring about economic development.
5.   It collect tax
Good collection of tax, help national development because tax is used for different projects which help economic development. For example, tax is used in construction of roads, railways and buying medicines for our hospitals.
6.   Making good policies
Government is making good policies for development. These policies include, reducing taxes, increasing employment, creating a conducive environment for business and encouraging entrepreneurs.

Areas where the government has been ineffective in economic development

Apart from the mentioned effectiveness of the government in economic development, there is some ineffectiveness too. Some of this ineffectiveness are:
1. Signing weak contracts with investors
Some of the contracts do not consider the national interests. For example, mining contracts do not take into account the national interests.
2. Poor tax collection
Because of poor tax collection, the government loses a lot of money due to unnecessary tax exemptions and tax avoidance.
3. Failure to control inflation
For example in Tanzania, products prices are increasing and cause fall in purchasing value of money.
4. Poor transport system
Poor transport system affects the economic development of Tanzania. For instance, traffic jams in cities is due to poor infrastructure and city planning.
5. Inefficiency of power supply
Electricity has become a major problem. Many areas do not have reliable electricity and this creates a shortage of industries. Electricity has become a major problem. Many areas do not have reliable electricity, and this creates a shortage of industries. For example, in Kigoma, the region is not connected to the national grid, that why there are no industries in the region.
6. Corruption
Leaders are using for their own benefits the money that was supposed to go to development. As a result, development, government should fight against corruption.
7. Dependence on foreign aid
Foreign aid is depended to finance the budget of the nation, this affects the economic development of the country especially where the aid is not given on time.

Private Sector

The private sector is the part of the economy that is run by individuals and companies for their own profit.

Components of the private sectors

There are two components of private sectors which are: formal sector and informal sector.
Formal sectors are sector which encompasses all jobs with normal hours and regular wages, and are recognized as income sources and they pay tax. Examples of formal sectors are: private schools, private hospital, passenger’s busses and shops.
Informal sectors are sectors which encompasses all jobs which are not recognized as normal income sources, and on which taxes are not paid. Examples of informal sector are: machinga, tuition centers and street food sellers.

Importance of the informal sector in economic development

1.   Provides jobs
Informal sector provides job which reduce the unemployment problem. Many people have employed themselves through informal sector.
2.   Generates income
People who participate in informal sector, get income. This income help them to fulfill their daily basic needs.
3.   Helps to alleviate poverty
The informal sector reduces poverty because people get work and income which help them to have their basic needs.
4.   Influence entrepreneurial activity
The informal sector encourages people to get involved in a variety of entrepreneurial activities. Through these activities, people earn a living.
5. Helps to bring commodities to the customer’s doors
Some customers stay away from the city, this help them to get commodities at their doors. For example, many entrepreneurs sell vegetables by passing through people's homes.
6.   It produce goods and services
For example, small farmers cultivate and feed their communities. Also, bodaboda drivers provide transportation services to the community.

Problems Facing the Informal Sector

Apart from the mentioned importance of the informal sector in economic development, there are some problems too. Some of those problems are:
1. Many jobs are low-paid and the job security is poor.
2. There are no proper places set for them to conduct their businesses.
3. Lack of transportation means. For instance, “Machinga” guys walk long distances to sell their goods.
4. Some of the businesses do not address the issue of hygiene.
5. Lack of enough capital which limits the expansion of the businesses.
6. Lack of creativity among the members due to low levels of education.
7.  They are not recognized by the authorities and therefore there is no freedom in doing their businesses.

Ways of Improving the Informal Sector

The informal sector may be improved in several ways. Some of these include the following:-
1. The government should recognize the sectors by registering all the owners of these businesses.
2. Proper places should be located where people can operate their activities comfortably.
3. People should be educated on how to conduct their activities properly and the importance of cooperation and unity. If they are united it will be easier for them to get loans from financial institutions.
4. Health officers must visit these areas to inspect and educate people on all issues relating to health.

Social services

Social services are the government services provided for the benefit of the community.
Social services provided in Tanzania are: education, water, electrity, transport and communication and health services.

Role of government in provision of social services

1. To make policies which support private and non-governmental institutions in the provision of social services
2. To construct and maintain the transportation system.
3. To distribute teaching and learning materials to schools.
4. To distribute important facilities to hospitals and other areas where health services are provided.
5. To educate Tanzanians on environmental preservation so that water sources are not polluted.
6. To train the required personnel who will assist in the provision of social services. Examples of such personnel are teachers; water experts; railways; road and electrical engineers; doctors and nurses.

Role of private sectors in provision of social services

1. Private sector provide water services by drilling wells.
2. They provide transportation services to the peole.
3. They provide health services through building of hospitals, dispensaries, clinics etc.
4. They construct private schools, colleges and univesitites.
5. They provide electricity especially in village by selling solar powers and generators.
6. They help government in provision of social services.

Challenges Facing the Provision of Social Services in Tanzania

1. Some of the government and private institutions face financial problem which complicate the provision of high quality social services.
2. People living in rural areas have the worst living conditions. As a result, they migrate to urban areas where they cause intensive scramble over the available social services.
3. Water supply is not sufficient in rural and urban areas.
4. Transportation systems in the rural areas are still a problem. People living in remotes areas do not have access to transportation systems. Poor transport makes it difficult for people to go to hospitals or farmers to transport their produce.
5. Bad behavior among individuals of destroying public and private infrastructure. Some destroy the railways and cause accidents. Others steal transformer oil and telephone cables.
6. Services are too expensive and the citizens are unable to pay for the costs of the services rendered. For instance, most of the private schools set high school fees which are not affordable to a majority of Tanzanians.

Solutions for the challenges facing provision of social services in Tanzania

1. Improve living standard in rural areas so as to avoid migration of people from village to town.
2. To increase access of water so as all people can get clean and safe water.
3. Construction of better roads in rural areas.
4. Reduces cost of services. For example, electricity and water services are too expensive, so the government should reduce its price so that many people can afford.
5. Making of strict laws against bad people who destroy social services.
6. The government should find more money to help provide social services.

Revision Questions

1. Answer the following questions by choosing the most correct alternatives.
     I.        Development can be_______
A at individual and national level. B found in the developed countries only. C only for the personal level. D at the national level only. E at community level only.
   II.        Factors of economic development include_______
A land, labour and capital. B computer and banks. C banks and SACCOS. D loan-giving institutions. E none of the above.
  III.        The following are the importance of SACCOS in economic development except________
A providing loans for investments. B improving people’s living standards C increasing the national income. D helping the people who are self-employed. E organizing strikes and boycotts.
 IV.        The social security institutions found in Tanzania are_______
  V.        ________ are operating as communication companies in Tanzani.
A Tigo, TTCL, Airtel, Zantel. B Sasatel, Airtel, FINCA, Vodacom. C Vodacom, NIDA, IMF, Sasatel. D World bank, IMF, Vodacom, Airtel. E Zantel, Sasatel, NMB, TBC.
2.   Define the following terms:
     I.        Social security
   II.        Per capita income
  III.        Life expectancy
 IV.        Poverty
3.   Briefly explain types of development.
4.   Explain in short the indicators of economic development.
5.   Discuss any four factors for economic development.

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