FEEDBACK TUTORIAL LETTER 
                                   
                                   
                          nd
                         2    SEMESTER 2017 
                                   
                                   
                           ASSIGNMENT 1 
                                   
                     DEVELOPMENT ECONOMICS 
                              DEC712S 
                                   
                                   
                                   
                                   
                                  1 
         
           COURSE:             DEVELOPMENT ECONOMICS 
           COURSE CODE:        DEC712S 
           TUTORIAL LETTER:    08/2017 
           DATE:               AUGUST 2017 
            
           Dear Student 
           Thank you for submitting your first assignment on time.  We trust that you have worked hard 
           this far and will continue to do so because success is the best motivator.  If you did not start 
           off well, remember you still have one assignment to try and make up for this. 
           In  this  tutorial  letter  I  would  like  to  give  feedback  on  Assignment  1  of  Development 
           Economics.  If you did not answer any question correctly, it could be because you did not 
           read the required units thoroughly or perform proper research before attempting to answer the 
           questions. Always try to answer the questions as complete as possible providing all the facts 
           and also all required statistical analysis. 
           Use the opportunity to revise the questions with the memorandum in hand.  Feel free to 
           contact your tutor/marker if you need assistance with this assignment or with assignment 2.  . 
           I hope to see you at the vacation school as well as looking forward to your next assignment. 
           Regards 
            
           Mr. ADEYANJU ANTHONY 
            
            
           TUTOR NAME             TEL NO           E-MAIL ADDRESS 
           Mr. ADEYANJU ANTHONY.  +264 813948008   tonyadeyanju@gmail.com 
           A 
            
            
               Question 1                                                             [50 Marks] 
               Students are expected to present answers by giving appropriate definition of GDP as well as a 
               brief  introduction to the Namibia`s economy before provision of impacts of debts to the 
               economy. Thus; 
               The gross domestic product (GDP) is one of the primary indicators used to gauge the health 
               of a country's economy. It represents the total dollar value of all goods and services produced 
               over a specific time period; you can think of it as the size of the economy. 
               The Namibian economy has a modern market sector, which produces most of the country's 
               wealth, and a traditional subsistence sector. Namibia's gross domestic product (GDP) per 
               capita is relatively high among developing countries, but obscures one of the most unequal 
               income  distributions  on  the  African  continent.  Although  the  majority  of  the  population 
               depends  on  subsistence  agriculture  and  herding,  Namibia  has  more  than  200,000  skilled 
               workers, as well as a small, well-trained professional and managerial class. 
               The  country's  sophisticated  formal  economy  is  based  on  capital-intensive  industry  and 
               farming. However, Namibia's economy is heavily dependent on the earnings generated from 
               primary commodity exports in a few vital sectors, including minerals, livestock, and fish. 
               Furthermore, the Namibian economy remains integrated with the economy of South Africa, 
               as the bulk of Namibia's imports originate there.  
               Since independence, the Namibian Government has pursued free-market economic principles 
               designed  to  promote  commercial  development  and  job  creation  to  bring  disadvantaged 
               Namibians into the economic mainstream. To facilitate this goal, the government has actively 
               courted donor assistance and foreign investment. The liberal Foreign Investment Act of 1990 
               provides for freedom from nationalization, freedom to remit capital and profits, currency 
               convertibility, and a process for settling disputes equitably. 
               What is 'External Debt'?  This is the portion of a country's debt that was borrowed from 
               foreign  lenders  including  commercial  banks,  governments  or  international  financial 
               institutions. These loans, including interest, must usually be paid in the currency in which the 
               loan was made. 
               Economic impacts as a result of high external debt would include  
                     High external debt would slow down economic growth, because instead of public 
                      funds to be invested in instruments that increases foreign direct investment it would 
                      be used to service debts 
                     High external debt could also lead to increase in tax rates as government tries to pay 
                      public debt 
                     Through  creation  of  money,  it  could  lead  to  inflation  which  is  as  a  result  of 
                      government`s attempt to finance its debt. 
                
              Question 2                                                           [25 Marks] 
                  a.  20% poorest – 7.5 % income 
                     20% poor – 11.8 % income 
                     20% Middle – 15.5 % income 
                     20% Rich – 21.1% income 
                     20% Top rich – 44.1% income  
                      
                     Cumulative 60% bottom income = 7.5 +11.8+15.5 = 34.8% 
                  b.   
                                                                           
                      
                      
                  c.  The  Gini  coefficient  for  Niger  is  roughly  .36  (any  estimate  close  to  this  point  is 
                     correct) 
                   
                   
                  Question 3                                                       [25 Marks] 
                  a.  The three co-values for development are: 
                  Sustenance: The ability to meet basic needs. All people have certain basic needs without 
                  which life would be impossible. These life-sustaining basic human needs include food, 
                  health, and protection.   
                  When  any  of  these  is  absent  or  in  critically  short  supply,  a  condition  of  “absolute 
                  underdevelopment” exists.  
                  Self-Esteem: A second universal component of the good life is self-esteem- a sense of 
                  worth and self-respect, of not being used as a tool by others for their own ends.