Economic Growth is an increase in a country’s total output of goods and services. It is measured by changes in real GDP. Economic Growth is caused by improvements in the quantity and quality of the FOP. The following is the four elements of Economic Growth:
- Natural Resources
Ex) land, minerals, fuels, climate
- Human Resources
The supply of labour and the quality of labour
Increase in the supply of labour and market demand thus stimulating production
- Physical Capital and Technological Factors
Ex) machines, factories, roads
- Institutional Factors
Ex) the banking system (a purpose of providing liquidity on the capital and goods markets), legal system, education system, health care system, political stability, infrastructure (ex: roads, ports, telecommunications networks)
Population growth
In the short run, population growth put pressure on education and employment but eventually social provision for the elderly will have to be financed. It also impacts on the supply of food (starvation and malnutrition cause infant mortality) and environment (food pressure takes valuable resources away.)
Increase in the quality of human resources, or social investment, would have both economic and social benefits. Economic benefits would be higher productivity in the economy, increased labour mobility, and better use of finite resources. Social benefits would be better health and longer lives, greater participation and democratization, and better opportunities for women in choosing their own lives.
Education
In developing countries, children do not receive an appropriate education due to the following:
- Inadequate education systems
- Children need to work on the land instead of to study at school
- A lack of jobs may lead to crime and increasing drug abuse, and an unwillingness to attend school
Nepal is the 48th poorest country in the world. One of the problems is its population that will be 48 million by 2030. 16.5% of the country’s total land area is cultivated, and due to population pressure, the percentage of Nepal’s cultivated area has increased from only 10% in the 1960s.
Nepal’s mineral resources are very limited; they are small, scattered, and barely developed. There are known deposits of coal, iron ore, magnesite, copper, cobalt, pyrite, limestone, and mica. Indeed, Mineral extraction and transport is a major problem due to the country’s rugged terrain.
Nepal’s great river systems provide immense potential for hydroelectric development. If developed and utilized within the country and exported to India, the main market for power generated in Nepal, it could become a main resource of Nepal’s economy.
