Hindrances to the Growth of the Economy
Economic growth refers to the increase in production of a given country over time and is measured with the increase in the GDP. The economy of a country requires good government policies and a conducive environment that can help to attract investments as well as form an avenue to increase the GDP. Different countries experience varying rates of economic growth depending on various factors as discussed below:
The endowment in natural resources of a country will determine its rate of growth. For example, countries that are endowed with resources such as gas, oils and other expensive minerals boast high economic growth rate than those that have raw materials such as foodstuffs which are inexpensive. You will find that countries such as Saudi Arabia have exclusively depended on oils as the driver of economic growth.
Infrastructural development plays a critical role in the growth of economy of any country, For example, countries with excellent roads and transportation means find it convenient to transport goods from one place to the other. Additionally, modern technology, factories and machineries are not only effective in production but also save resources unlike in nations that depend on physical labor.
High population results in an increase in the rate of unemployment which could hamper the rate of growth of a country. However, on the other hand, high population could mean availability of a work force to carry out development agendas of a country.
The law of a country could encourage or discourage investors in a country. As such, any country needs to make laws that promote its economy by encouraging investment and security. In this regard, the political climate will come in as a factor that has a critical role in determination of the rate of economic growth of a country. Countries that are peaceful enjoy stable economies unlike those ones where there is insecurity and war