10 Positive and Negative Impacts of Economic Development

10 Positive and Negative Impacts of Economic Development

Economic development is a condition in which there is an increase in the country's productive capacity compared to the previous year. This can be seen from the increase in GDP, the ability to produce goods, technological improvements, and so on. In fact, this increase has not only had a positive impact, but also a negative one. Check out the following 10 positive and negative impacts of economic development.

5 Positive Impacts of Economic Development

Economic development basically brings many positive impacts. Some of them are:

1. Simplify Human Life

Economic development has an impact on human convenience in life. For example, with the existence of public transportation services, it is easier for people to move or move from one place to another.

When the internet did not exist, the dissemination of knowledge and knowledge was very limited. Currently, humans find it easier to seek knowledge and explore abilities for the betterment of their lives.

2. Increased Job Opportunities

Economic development will also increase employment opportunities. Large production of goods and services requires the role of human resources. Job opportunities will also increase in order to raise the standard of human life.

Job vacancies in various fields can be obtained easily. In fact, along with the increase in economic development, various fields of work have emerged that have never existed before, such as software engineer , cyber security , and many more.

3. Standard of Living Improved

The amount of employment opportunities will certainly have an impact on improving people's standard of living. For example, in the area of ​​Qatar before the discovery of petroleum, the country used to have a nomadic society with a middle to lower economy. After economic development in the petroleum sector was carried out, changes in living standards ensued.

In fact, according to Weil (2013, p. 22), most parts of the world have experienced an unprecedented increase in living standards with economic development.

In Japan, the life expectancy for people born in the 1880s is 35 years. Compare that to today where life expectancy in Japan has reached 83 years.

Meanwhile, in the United States, to buy a refrigerator, an average person had to work for 333 hours. Currently, refrigerators can be purchased for only 66 hours of work.

4. No Scarcity of Goods

Economic development indeed makes the production of goods increase. Apart from that, economic development will also open up a freer trading sector as well. This is what makes consumer goods more available.

It is very rare for a scarcity of basic necessities such as rice for example. Indeed, sometimes scarcity occurs, but it is not caused by a stoppage of production, but due to other factors such as politics and price games.

5. Ready to Compete in the Era of Globalization

A growing economy makes a country ready to compete in the globalization era. Countries are becoming more open to foreign investment, export-import, and cooperation agreements.

Day by day, global economic competition will continue to increase. The existence of economic development will make the country no longer surprised to face the era of globalization.

5 Negative Impacts of Economic Development

Although there are many positive impacts, economic development also has negative impacts. The following are 5 negative impacts of economic development.

1. Income Inequality

The negative impact of economic development in relation to employment is that it allows inequality in terms of income. As economic development progresses, there will be the possibility of exploitation of various resources.

Those with lots of money and resources are more likely to find it easy to exploit. Meanwhile, those who are less fortunate are only quite satisfied with working as laborers. This is what causes income inequality to become more striking in the midst of economic development.

2. Increased Pollution

One of the negative impacts of economic development is from an environmental perspective. In 2014, the World Bank stated that the rate of degradation of natural resources in many countries is increasingly worrying.

China is one of the countries with the highest levels of pollution. Even its two cities, namely Beijing and Shanghai, have bad quality air. This happens because many factories are located in the area, which is one of the means of economic development.

3. Lifestyle Changes

Lifestyle changes in economic development will definitely occur. An example can be seen in the country of Nauru which is located in the West Pacific and was once lined up as one of the richest countries in the world per capita. Before the discovery of phosphate, the people of Nauru lived a simple life. However, when phosphate was discovered, the government launched a massive exploitation.

State income increased drastically and eventually changed people's lifestyles thanks to the subsidies provided. Society becomes happy to live in luxury with high hedonism and consumerism.

The government of Nauru is too 'pampering' its people with various subsidies to tax exemptions. As a result, a phosphate deficit occurred in the 1990s, causing damage to 80% of the island of Nauru, making it no longer suitable for agricultural land. Even now, Nauru's income still depends on aid from Australia.

4. Depletion of Natural Resources

Natural resources, especially non-renewable ones, are not spared from the effects of economic development. As mentioned above, Nauru used to be the owner of the largest phosphate mine in the world.

Unfortunately, due to all-out exploitation, the country went bankrupt. The local government does not think about alternative state revenues, only relying on phosphates. In fact, this type of mine includes non-renewable energy.

This exploitation not only affects the environment, but also the condition of the country. Wisely, the state must think of alternative resources in anticipation of running out of non-renewable resources.

For example, countries in the Middle East region are currently starting to think about alternative sources of income other than petroleum. One of them is the tourism sector, because oil will run out one day.

5. Declining Health

In addition to environmental exploitation, economic development will lead to degradation of public health. Pollution due to factory smoke, water polluted by waste, garbage, and the like does not only damage the environment.

The quality of human health will also decline, because the environment and health are one link in the chain. For example the tragedy of the leaking of the Nuclear power plant in Chernobyl which forced the people to be evacuated. Many people who are exposed to nuclear radiation end up suffering from chronic diseases. Liver cancer, for example.

That's a complete explanation of the 10 positive and negative impacts of economic development. Economic development is really needed by humans and a country. However, the process must be full of calculations so that the negative impacts of economic development can be minimized.