Which of the following statements is/are correct?

Both 1 and 2

The correct answer is option 3: Both 1 and 2

• Countries with high levels of human development invest more in the social sectors and are generally free from political turmoil and instability. — Correct. Such countries usually spend more on education, healthcare, and welfare, leading to better living standards and stability.
• Places with low levels of human development tend to spend more on defence rather than social sectors. This shows that these countries tend to be located in areas of political instability and have not been able to initiate accelerated economic development. — Correct. Political instability and higher defence expenditure often reduce investment in social development. 

NCERT: Countries with high levels of human development invest more in the social sectors and are generally free from political turmoil and instability. Distribution of the country’s resources is also far more equitable. On the other hand, places with low levels of human development tend to spend more on defence rather than social sectors. This shows that these countries tend to be located in areas of political instability and have not been able to initiate accelerated economic development.