Characteristics of Developing countries:

i) Low PCI:
People in developing countries are poorer on an average than those in developed economies. However, this does not mean that all the people are poor. Some may be very rich.

ii) Low levels of saving:
Poor people cannot afford to save and so the savings ratio (saving as a percentage of disposable income) of a country, where the average income is low, is likely to be low.

iii) Low life expectancy and high infant mortality rate:
Someone born in Japan can expect to live up to the age of 83 whereas one born in Nepal has a life expectancy of 66 years only.

iv) Serious population pressure:
In a number of developing countries, the birth rate exceeds the death rate and there is a high dependency ratio, with a high proportion of children being dependent on a small proportion of workers.

v) Low export and high import:
Underdeveloped countries like Nepal have trade deficits. The exports are cheap semi-finished goods and raw materials and imports are finished goods and other expensive items.

vi) The predominance of agriculture:
Agriculture has a predominant place in the structure of the developing countries. Majority of people live directly or indirectly on agriculture. A major portion of the GDP of developing economies is constituted by agriculture.

vii) Underemployment:
Underemployment can be high in primary sectors. For instance, ten persons may be doing the work of six. This, again, lowers productivity.

viii) Dualistic economy:
Most of the countries have dualistic economy; market economy and subsistence economy. There are backward rural areas as well as modern town areas. Majority of people live in rural areas and rely on subsistence farming.

ix) Others:

• Low levels of literacy and medical services.
• Low levels of capital goods and poor infrastructure
• Poor housing and sanitation
• Widespread unemployment
• Low levels of investment
• Underutilization of natural resources
• The vicious circle of poverty