Extract B states: 'One of the fundamental goals of economic development is to secure a higher standard of living.'
Explain the term 'a higher standard of living' and analyse two factors which can be considered in any assessment of a country's standard of living.
This decade marks a significant milestone since major institutional reforms began across the East African Community (EAC). Over these years, several member states have navigated political transitions and external economic shocks, such as fluctuating global commodity prices and regional droughts.
The United Nations Conference on Trade and Development (UNCTAD) distinguishes between two primary groups within the region. The resource-exporter economies, such as South Sudan and the Democratic Republic of Congo, face different structural challenges compared to the more service- and agricultural-diversified economies, such as Kenya and Rwanda. For both groups, however, regional trade integration under the African Continental Free Trade Area (AfCFTA) offers strong prospects for future growth.
UNCTAD argues that as global supply chains restructure, foreign demand for manufactured goods and processed agricultural products will drive industrialisation in East Africa. Just as some developed nations possess a comparative advantage in high-tech manufacturing, certain East African economies are developing competitive advantages in textile production and horticulture. Eco-tourism is also a major source of service-sector growth.
However, although economic progress is visible, persistent barriers remain. Improvements in labor productivity and infrastructure are essential to enhance international competitiveness. Increased foreign direct investment (FDI) in transport corridors, clean energy, and digital network systems is urgently required. Furthermore, youth unemployment and food price inflation remain volatile social challenges.
Rwanda is frequently cited as an example of what targeted policy interventions can achieve. Through institutional reforms and anti-corruption measures, it has become one of the most competitive business destinations in Africa. This structural strength has helped it attract significant investment and secure bilateral trade agreements. Rapid GDP growth has been accompanied by public investment in health and education.
One of the fundamental goals of economic development is to secure a higher standard of living. The Human Development Index (HDI) is widely used to make international comparisons of living standards. The average HDI for transition economies in Sub-Saharan Africa has risen from 0.402 in 1990 to 0.547 in 2021. For comparison, Rwanda's index rose from 0.250 to 0.534 over the same period, while Germany recorded an HDI of 0.942.
Real income per capita, access to modern healthcare and primary schooling, life expectancy at birth, environmental quality, and the level of income inequality are vital elements in assessing national living standards. For developing and developed nations alike, improving these indicators builds a more resilient and productive global economy.
