ECONOMIC DEVELOPMENT MODULE 1&2

Introduction of Economic Development

What is Economic Development?

✓ Economic Development is programs, policies or activities that seek to improve the economic
well-being and quality of life for a community. What “economic development” means to you will
depend on the community you live in. Each community has its own opportunities, challenges,
and priorities.

What Is Development Economics?

Development economics is a branch of economics that focuses on improving fiscal, economic, and social
conditions in developing countries. Development economics considers factors such as health, education,
working conditions, domestic and international policies, and market con with a focus on impro
conditions in the worl countries.

Understanding Development Economics

Development economics studies the transformation of emerging nations into more prosperous nations.
Strategies for transforming a developing economy tend to be unique because the social and political
backgrounds of countries con vary dramatically.

How the Other Half Live

✓ A POOR WOMAN FROM UGANDA

When one is poor, she has no say in public, she feels interior. S has no food, so there is famine in her
house; no clothing, and progress in her family

✓ A BLIND WOMAN FROM TIRASPOL, MOLDOVA

For a poor person everything is terrible-illness, humiliation, shame. We are cripples; we are afraid of
everything, we depend on everyone. No one needs us. We are like garbage that everyone wants to get
rid of.

✓ PARTICIPANT IN A DISCUSSION GROUP IN RURAL

ETHIOPIA Life in the area is so precarious that the youth and every able person have to migrate to the
towns of join the army at the war front in order to escape the hazards of hunger escalating over here.
What Is Development Economics Used for?

Development economics is the study of how emerging nations become more financially stable. It can
be used as a tool for students and economists working. To develop policies that can be used in creating
domestic and international policy.

ADB Forecasts 7.4% Growth for the Philippines in 2022

The Philippine economy is forecast to grow faster than previously expected in 2022 supported by
stronger-than-expected domestic demand spurred by rising employment and a recovery in tourism after
the country lifted COVID-19 mobility restrictions, according to a report released today by the Asian
Development Bank (ADB)

SUSTAINABLE DEVELOPMENT GOALS

• No Poverty

Eradicating poverty in all its forms remains one of the greatest challenges facing humanity.

• Zero Hunger

End hunger, achieve food security and improved nutrition and promote sustainable agriculture.

• Good Health and Well Being

Ensure healthy lives and ensure well-being for all at all ages.

• Quality Education

Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all.

• Gender Equality
Achieve gender equality and empower all women and girls.

• Clean Water and Sanitation

Ensure availability and sustainable water and sanitation for all.

• Affordable and Clean Energy

Ensure access to affordable, reliable, sustainable and modern energy for all.

• Decent Work and Economic Growth

Promote sustained, inclusive and sustainable economic growth, full productive employment and decent
work for all.

• Industry, Innovation, and Infrastructure

Build resilient infrastructure, and promote inclusive and sustainable industrialization and foster
innovation.

• Reduced Inequalities

Reduce inequality within and among countries.

• Sustainable Cities and Communities

Make cities and human settlements inclusive, safe, resilient and sustainable.

• Responsible Consumption and Production

Ensure sustainable consumption and production patterns.

• Climate Action

Take urgent action and combat climate change and its impacts.

• Life Below Water

Conserve and Sustainably use the oceans, seas and marine resources for sustainable development.

• Life on Land

Protect, restore and promote sustainable ecosystems, sustainable manage forests, combat
desertification and halt reverse land degradation and halt biodiversity loss.

• Peace Justice and Strong Institutions

Promote peaceful and inclusive societies for sustainable development, provide access to justice for all
and build effective, accountable and inclusive institutions at all levels.

• Partnership for the Goals

Strengthen the means of implementation and revitalize the global partnership for sustainable
development.
 ECONOMIC DEVELOPMENT MODULE 3
Contemporary Models of Development and Underdevelopment

UNDERDEVELOPMENT AS A COORDINATION FAILURE

• Coordination failure

A situation in which the inability of agents to coordinate their behavior (choices) leads to an outcome
(equilibrium) that leaves all agents worse off than in an alternative situation that is also an equilibrium.

• Complementarity

An action taken by one firm, worker, or organization that increases the incentives for other agents to
take similar actions.

Complementarities often involve investments whose return depends on other investments being made
by other agents.

Examples of Complimentarity

Big push. A concerted, economy-wide, and typically public policy-led effort to initiate or accelerate
economic development across a broad spectrum of new industries and skills.

✓ which production decisions by modern-sector firms are mutually reinforcing

O-ring model. An economic model in which production functions exhibit strong complementarities
among inputs and which has broader implications for impediments to achieving economic development.

✓ which the value of upgrading skills or quality depends on similar upgrading by other agents.

• Middle- income trap

A condition in which an economy begins development to reach middle-income status but is chronically
unable to progress to high-income status. Often related to low capacity for original innovation or for
absorption of advanced technology, and may be compounded by high inequality.

Underdevelopment trap

A poverty trap at the regional or national level in which underdevelopment tends to perpetuate itself
over time.
Deep intervention

A government policy that can move the economy to a preferred equilibrium or even to a higher
permanent rate of growth, which can then be self-sustaining so that the policy need no longer be
enforced because the better equilibrium will then prevail without further intervention.

Congestion

The opposite of a complementarity; an action taken by one agent that decreases the incentives for
other agents to take similar actions.

Examples of Congestion

• Where-to-meet dilemma. A situation in which all parties would be better off cooperating than
competing but lack information about how to do so. If cooperation can be achieved, there is no
subsequent incentive to defect or cheat.

• Prisoners’ dilemma. A situation in which all parties would be better off cooperating than competing,
but once cooperation has been achieved, each party would gain the most by cheating, provided that
others stick to cooperative agreements-thus causing any agreement to unravel.

Multiple Equilibria

A condition in which more than one equilibrium exists. These equilibria sometimes may be ranked, in
the sense that one is preferred over another, but the unaided market will not move the economy to the
preferred outcome.

Pareto improvement

A situation in which one or more persons may be made better off without making anyone worse off.

STARTING ECONOMIC DEVELOPMENT: THE BIG PUSH

The big push model is a concept in development economics or welfare economics that emphasizes that
a firm’s decision whether to industrialize or not depends on its expectation of what other firms will
do. It assumes economies of scale and oligopolistic market structure and explains when industrialization
would happen.

The big push addresses the problems present in multiple equilibria.

Assumptions of Big Push

✓ There is only one factor of production – Labor

 ✓ Workers in the traditional sector receive a wage of 1 (or normalized to 1, treating the wage as
the numeraire; that is, if the wage is 19 pesos per day, we simply call this amount of money “I”
to facilitate analysis using the geometry.
✓ There are N types of products, where N is a large number
✓ Each good receives a constant and equal share of consumption out of national income.
✓ Economy is closed
✓ Perfect competition in the traditional (cottage industry) sector is present, with free entry and
no economic profits.

Other Cases in Which a Big Push May Be Necessary

• Intertemporal effects. Even if the industrial wage rate is 1 (ie, the same as the traditional-sector
wage), multiple equilibria can occur if investment must be undertaken in the current period to get a
more efficient production process in the next period.

• Urbanization effects. If some of the traditional cottage industry is rural and the increasing-returns-to-
scale manufacturing is urban, urban dwellers’ demand may be more concentrated in manufactured
goods.

• Infrastructure effects.By using infrastructure, such as a railroad or a port an investing modern firm
helps defray the large fixed costs of that infrastructure. The existence of the infrastructure helps
investing firms lower their own costs.

•Training effects

There is underinvestment in training facilities because entrepreneurs know that the workers they train
may be enticed away with higher wages offered by rival firms that do not have to pay these training
costs.

WHY THE PROBLEM CANNOT BE SOLVED BY A SUPER-ENTREPRENEUR

❖ First, there may be capital market failures.

• How could one agent assemble all the capital needed to play the super-entrepreneur role?
• Even if this were logistically imaginable, how would lenders have confidence in their
investments?
• In particular, how could a penalty for default be imposed?

WHY THE PROBLEM CANNOT BE SOLVED BY A SUPER-ENTREPRENEUR

❖ Second, there may be costs of monitoring managers and other agents and designing and
implementing schemes to ensure compliance or provide incentives to follow the wishes of the
employer, these are often referred to as agency costs.
Agency costs

Costs of monitoring managers and other employees and of designing and implementing schemes to
ensure compliance or provide incentives to follow the wishes of the employer.

Asymmetric information

A situation in which one party to a potential transaction (often a buyer, seller, lender, or borrower) has
more information than another party.

❖ Third, there may be communication failures. Suppose someone says to you, “I am coordinating
investments, so work with me.” Should you do so?
❖ Fourth, there are limits to knowledge. Even if we stipulate that the economy as a whole has
access to modern technological ideas, this does not mean that one individual can gain sufficient
knowledge to industrialize (or even gain enough knowledge about whom to hire to
industrialize).

FURTHER PROBLEMS OF MULTIPLE EQUILIBRIA

•Inefficient Advantages of Incumbency

• Behavior and Norms

• Linkages. Connections between firms based on sales. A backward linkage is one in which a firm buys a
good from another firm to use as an input, a forward linkage is one in which a firm sells to another firm.
Such linkages are especially significant for industrialization strategy when one or more of the industries
(product areas) involved have increasing returns to scale that a larger market takes advantage of.
Inequality, Multiple Equilibria, and Growth

•Poverty trap. A bad equilibrium for a family, community, or nation, involving a vicious circle in which
poverty and underdevelopment lead to more poverty and underdevelopment, often from one
generation to the next.

MICHAEL KREMER’S O-RING THEORY OF ECONOMIC DEVELOPMENT

O-ring production function. A production function with strong complementarities among inputs, based
on the products (ie, multiplying) of the input qualities.

Implications of the O-Ring Theory

The analysis has several important implications:

➢ Firms tend to employ workers with similar skills for their various tasks.
➢ Workers performing the same task earn higher wages in a high-skill firm than in a low-skill firm,
 ➢ Because wages increase in q at an increasing rate, wages will be more than proportionally higher
in developed countries than would be predicted from standard measures of skill.
➢ If workers can improve their skill level and make such investments and if it is in their interests to
do so, they will consider the level of human capital investments made by other workers as a
component of their own decision about how much skill to acquire.
➢ One can get caught ineconomy-wide, low-production-quality traps.
➢ O-ring effects magnify the impact of local production bottlenecks because such bottlenecks have
a multiplicative effect on other production.
➢ Bottlenecks also reduce the incentive for workers to invest in skills by lowering the expected
return to these skills.

ECONOMIC DEVELOPMENT AS SELF-DISCOVERY

Information externality. The spillover of Information- such as knowledge of a production process- from
one agent to another, without intermediation of a market transaction; reflects the public good
characteristic of information (and susceptibility to free riding)-it is neither fully excludable from other
uses, nor nonrival (one agent’s use of information does not prevent others from using it).

THE HAUSMANN-RODRIK-VELASCO GROWTH DIAGNOSTICS FRAMEWORK

➢ Growth diagnostics. A decision tree framework for identifying a country’s most binding
constraints on economic growth.
➢ Social returns. The profitability of an investment in which both costs and benefits are
accounted for from the perspective of the society as a whole.
 ECONOMIC DEVELOPMENT MODULE 4
Goal 1 NO POVERTY
The SDGs are a bold commitment to finish what we started, and end poverty in all forms and
dimensions by 2030. This involves targeting the most vulnerable, increasing basic resources and
services, and supporting communities affected by conflict and climate-related disasters.

1. 736 million people still live in extreme poverty.

2. 10 percent of the world’s population live in extreme poverty, down from 36 percent in
1990.
3. Some 1.3 billion people live in multidimensional poverty .
4. Half of all people living in poverty are under 18.
5. One person in every 10 is extremely poor.

Goal 1 NO POVERTY
Goal targets

• By 2030, reduce at least by half the proportion of men, women and children of all ages living
in poverty in all its dimensions according to national definitions
• Implement nationally appropriate social protection systems and measures for all, including
floors, and by 2030 achieve substantial coverage of the poor and the vulnerable.
• By 2030, ensure that all men and women, in particular the poor and the vulnerable, have
equal rights to economic resources, as well as access to basic services, ownership and control
over land and other forms of property, inheritance, natural resources, appropriate new
technology and financial services, including microfinance.
• By 2030, build the resilience of the poor and those in vulnerable situations and reduce their
exposure and vulnerability to climate-related extreme events and other economic, social and
environmental shocks and disasters.
• Ensure significant mobilization of resources from a variety of sources, including through
enhanced development cooperation, in order to provide adequate and predictable means for
developing countries, in particular least developed countries, to implement programmes and
policies to end poverty in all its dimensions.
• Create sound policy frameworks at the national, regional and international levels, based on
pro- poor and gender-sensitive development strategies, to support accelerated investment in
poverty eradication actions.

HOW IS POVERTY IN OUR COUNTRY?

Poverty in the Philippines

“More than 90% of those who will remain poor are expected to come from Indonesia, the Philippines,
and Myanmar-the only country where the number of poor people will increase in 2021,”

-World Bank said.

• Economic officials estimated that the country’s poverty rate likely jumped to 18.3% in 2020
from 16.7% in 2018. Those figures translate to about 20 million poor Filipinos last year, higher
than 17.7 million in 2018 or before the pandemic struck.
• As the economy recovers, the government forecasts poverty rate to fall to 17,9% this year,
before further easing to 15.7% in 2022, which is equivalent to 17 million poor people. This
means President Rodrigo Duterte won’t hit his goal of slashing poverty incidence to 14% by
the time he steps down next year, as on-off lockdowns smash people’s income.

PDP 2023 2028 key to PH poverty reduction

Inequality

Economic inequality refers to disparities among individuals’ incomes and wealth. And those differences
can be great. Forbes counted a record 2,755 billionaires in the world as of 2021, when it finalized its
most recent rankings.

Meanwhile, the World Bank estimated that in 2021 more than 711 million people globally were living on
less than $1.90 per day.

That’s actually a big improvement from 1990, when over 1.9 billion people lived in extreme poverty
and the world had only 269 billionaires.
HOW IS INEQUALITY IN OUR COUNTRY?

Philippines: Inflation Rate

8.7

Exchange Rate

• The exchange rate is the price of a unit of foreign currency in terms of the domestic currency.
In the Philippines, for instance, the exchange rate is conventionally expressed as the value of
one US dollar in peso equivalent.

Interest Rate

• An interest rate is a cost of borrowing money, expressed as a percentage of the amount

borrowed. It is used to calculate the interest payments that are made over the life of a loan. An
interest rate can be fixed or variable, and it can apply to either consumer debt or business loans.

Philippines: Interest Rate

• In its first policy meeting of 2023, the Philippine central bank raised the benchmark rate to 6%,
sustaining a tightening cycle that started last year, when the rate was hiked by a total of 3.5
percentage points.

Employment Rate

• Percentage of the total number of employed persons to the total number of persons in the labor
force.

Philippines: Employment Rate

• Labor force participation rate in January this year stood at 64.5 percent. This means 49.72
million Filipinos are in the labor force.

Our growing population

Did you know?

• The world’s population is expected to increase by nearly 2 billion persons in the next 30 years,
from the current 8 billion to 9.7 billion in 2050 and could peak at nearly 10.4 billion in the mid-
2080s.

Population growth rate

• 1.5% annual change (2021)

Population growth rate

• The current population of the Philippines is 113,552,660 as of Sunday, March 26, 2023, based on
Worldometer elaboration of the latest United Nations data.
• The Philippines 2020 population is estimated at 109,581,078 people at mid year according to UN
data

Population growth rate

• The Philippines population is equivalent to 1.41% of the total world population.

• The Philippines ranks number 13 in the list of countries (and dependencies) by population

Population growth rate

• The population density in the Philippines is 368 per km2 (952 people per mi2).
• The total land area is 298,170 Km2 (115,124 sq. miles)

Population growth rate

• 47.5% of the population is urban (52,008,603 people in 2020)

• The median age in the Philippines is 25.7 years.

Urbanization and mmigration

Migration, whether internal or international, has always been one of the forces driving the growth of
urbanization and bringing opportunities and challenges to cities, migrants and governments.
Increasingly, municipal authorities are becoming recognized as key actors in managing migration and
have started including migration in their urban planning and implementation.

Urban

This is problematic to define and no single globally accepted definition of what constitutes an urban
settlement exists. What national statistical offices define as “urban” varies from country to country and
often varies over time within countries. Some countries define urban based on a minimum population
threshold and population density, while other countries use an administrative definition of what
constitutes an urban area.

Urbanization or “urban transition”.

This refers to “a shift in a population from one that is dispersed across small rural settlements, in
which agriculture is the dominant economic activity, towards one that is concentrated in larger and
denser urban settlements characterized by a dominance of industrial and service activities”
Urbanization generally occurs as a result of one or more of the following processes:

• natural population growth;

• when more people move from rural to urban areas;

• when the boundaries of what is considered urbanare extended: and/or

• from the creation of new urban centres.

Urban-to-urban migration, rural-to-rural migration, rural-to-urban migration, and urban-to-rural

migration:

• These types of migration refer to the movement of people from one urban or rural area to a
different urban or rural area. These types of migration may happen within a national border or
involve crossing an international boundary

City

Is also difficult to define because what constitutes an urban settlement varies and there are no
standardized international criteria for determining the city (UN DESA, 2018). Multiple boundary
definitions can exist for any given city. In general, there are three concepts:

City proper

• Describes a city according to an administrative boundary.

Urban agglomeration

• Considers the extent of the contiguous urban area, or built-up area, to delineate the city’s
boundaries and is therefore bigger than the city proper

Metropolitan area

• Defines its boundaries according to the degree of economic and social Interconnectedness of
nearby areas, identified by interlinked commerce or commuting patterns, for example.

Cities can also be categorized by population

• Small cities have up to 1 million inhabitants

• Medium-sized cities are cities with 1 to 5 million inhabitants
• Large cities are cities with 5 to 10 million inhabitants
• Megacities are cities with 10 million or more inhabitants
 ECONOMIC DEVELOPMENT MODULE 5

Agricultural transformation

• Agricultural transformation may be broadly defined as the process over time by which
the agrifood system evolves from subsistence oriented and farm centered into more
commercialized, productive and off-farm centered. Transformation is said to be
inclusive if the results lead to food security and poverty alleviation and reach the
socially and economically disadvantaged, in particular women, minorities, the disabled
and the elderly.
Rural Development

• More than half of the world population lives in rural areas.

• Living conditions: Precarious & subsistent.
• Wide spread poverty, growing inequality, unemployment & rapid population growth.
• Any development strategy to be meaningful must focus on rural development.

Any such policy requires at least 3 basic complementary elements:

• Increase productivity of small farmers • Increase domestic demand through employment-

oriented urban development
• •Diversify, non-agricultural, labor intensive rural development strategy.
• Without such integrated rural development any industrial growth will only give rise to
inequality, poverty and unemployment.

Facts on Agriculture

• Agriculture employs at least 60% of the labour force in Asia and Africa, but it only accounts for
no more than 30% of GDP.
• Between 1950 and 1970, per capita food and agricultural production grew less than 1% per year
in the developing world.
• The green revolution has helped increase agricultural productivity in developing countries.
• China has shown the largest growth of per capita food production in the last two decades.
• Africa has shown a significant decline in agricultural productivity in the last two decades.
• Major reason for poor agricultural performance in developing countries – neglect of agriculture
coupled with a bias toward urban industrial economy.

Two Kinds of World Agriculture

Highly Efficient
 • Developed countries High output per worker
• Small number of Farmers can feed entire nation.
• Technological and biological improvements.

Inefficient

• Developing countries
• Low productivity
• Agricultural output can
• Barely sustain farm population.
• Technological Stagnation

The Economics of Agricultural Development

Three stages of agricultural development:

• Subsistence
• Low-productivity, subsistence level, peasant farm.
• Diversified
• Mixed family agriculture, part for consumption, part for sales.
• Specialized
• High-productivity modern farm with specialized agriculture geared to commercial markets.

Characteristics of Subsistence farming.

1. Most output produced for family consumption.

2. Land and labour are the main factors of production, while capital investment is minimal.
3. It is threatened by the failure of rains, and the potential appropriation of the land by the money
lender.
4. Labour is underemployed most of the year, but highly occupied for planting and harvesting.
5. Farmers are often resistant to technological innovation due in part to the limited access to
credit, insurance and information: there is a lot of uncertainty and risk involved in subsistence
farming.

Transition to mixed and diversified farming.

• A successful transition from subsistence to diversified farming depends on the availability of

credit, fertilizers, crop information and marketing facilities.
• •Farmers need to feel secure that his family will benefit from the change in order to guarantee
successful transition.
• Transition to specialized, modern commercial farming.
• This type of farming usually emerges when other sectors of the economy, such as the industrial
sector, have already developed.
• It usually involves capital intensive and labour saving techniques of production.

Policies for agricultural development

• Policy # 1: Encourage technology and innovation in farms, not in the form of labour-saving machinery
(since developing countries are abundant in labour), but rather in the form of hybrid seeds, irrigation
and fertilizers.

• Policy # 2: Better design of government policies to guarantee equitable access of all farmers to credit
and technological innovations. Often the benefits of these policies are only enjoyed by large-scale
farmers.

• Policy #3: Implementation of land reform coupled with access to credit in order to provide rural
families with ownership of productive assets (land) and break the vice circle of highly unequal
distribution of rural income.

• Policy # 4: A fully fledge integrated rural development, which includes: (1) not only increasing
agricultural productivity, but also encouraging nonfarm activities in the rural areas; (2) Access to health,
education and housing in rural areas.

ENVIRONMENT VS DEVELOPMENT

• The concept of “environment” has evolved/developed since it started to become a global issue
in the early 1970s.
• The Earth’s ecosystems are in fact fragile, and that human beings have been contributing much
to its degeneration.
• The social and economic welfare of human beings is closely linked to their environment.

Environment

• Environment is a system which provides natural surroundings for the existence of organisms
and it is a prerequisite/requirement for their further evolution.
• Environment is a set of all factors with which a living subject interacts, and of all surroundings
which encompass it.
• Environment can be seen in different approaches. Abiotic components of environment
(atmosphere, water, minerals, energy etc.) Biotic components of environment (organisms-from
the simplest to the most complex) are its main

Development

• Economic growth was regarded as central to the development endeavors/activities up to the

1980’s.
• However, development came to be interpreted as multi-dimensional concept which should
encompass material, social, environmental, political and cultural components (with all of them
having a direct impact on the quality of human life).
• Development emphasized over exploitation of resources which in turn, compel human
societies to compromise their ability to meet the essential needs of their people in future.
Therefore, sustainable environmental development is recommend by many
scholars/intellectual.

Sustainable Development
The term sustainable development began to gain wide acceptance in the late 1980s. The concept of
sustainability has evolved along with our worries about the possible impact of our lifestyle on the
environment.

Sustainability means sustaining life within limited capacity of biosphere.

The World Commission on Environment and Development (WCED), in 1987 defined sustainable
development as: “development that meets the needs of the present generation without
compromising the ability of future generation to meet their own needs”. This definition has two crucial
elements – the notion of needs and the idea of inter-generation equity.

Later the encept of sustainable development has been changed from a mere concentration on
environmental problems towards comprehension of three different factor social, ecoremic and
environmental. Ability to meet the needs of present as well as of future generation depends on our
ability to balance all three elements, so that not a single one is neglected.

Four Principles of Sustainable Development

1. Decision-making process should depend on the best available scientific information and
risk analysis.
2. In case of uncertainty and threat of serious risks, the precautionary/protective principle
should be involved.
3. Environmental impact should be taken into account, especially in cases of nonrenewable
resources or possible non-reversible effects of human activities.
4. Polluters should be responsible for effects of their activities according to polluters pay
principle”(PPP).

How to Achieve Sustainable Development?

To achieve the objectives of sustainable development, empowering the following sections of society is a
mandatory condition:

• Women
• Local authorities
• Children Workers and trade unions
• Youth
• Business and industry. Indigenous people
• Farmers, and their communities.
• NGO’s
• Scientific and technological organizations

The Natural Environment and Economic Growth

• The natural environment plays a key role in our economy, as a direct input into production and
through the many services it provides. The benefits of natural environment range from the
essentials for life, including clean air and water, food and fuel, to things that improve our quality
of life and wellbeing. Such as recreation and beautiful landscapes. Generally, the natural
environment plays an important role in supporting economic activities in two ways:
Directly, by providing resources and raw materials such as water, timber and minerals that are required
as inputs for the production of goods and services; and

Indirectly, through services provided by ecosystems including carbon sequestering/restoring or removal,

water purification, managing flood risks, and nutrient cycling. Natural resources are, therefore, vital for
securing economic growth and development, not just today but for future generations.

The Impact of Development on the Environment

Development programs or projects can have negative or positive impacts on living environment
after/during implementation of the development

Positive impacts

Programs: construction of smaller water dams, application of environment-friendly technologies etc.

Effects: increase in biodiversity, enrichment of landscape by cultural features; sustainable exploitation of

environment for present as well as future generations.

Negative impacts

Programs: construction of transport infrastructure, great water dams, cities: materials and energy etc.
mining of natural resources of raw

Effects: fragmentation of natural habitats: loss of fertile soil: deforestation and soil degradation:
pollution of Environment: local climate change etc.