Why poor countries are poor
Most rich countries are in the North of the globe, and most poor countries are in the South, but it’s not geography that causes wealth or poverty. After all, Australia and New Zealand are part of the Southern hemisphere, and both are doing fine. You couldn’t say this of Papua New Guinea, which is the Asian country closest to Australia and New Zealand.
A superficial view is to blame racial differences. Black Africa is the poorest and most disordered part of the world, and Haiti, with an almost entirely black population, is the poorest country of the Americas. But the coincidence is accidental.
What makes some countries rich and others prone to poverty is not related to skin color or racial factors. Many immigrants from poor nations do very well in the US and Canada (though one has to admit that both countries are likely to make immigration easy only for the best and the brightest of those who hail from Third World countries).
It is also not the presence or lack of natural resources what makes a country rich or poor in the long run. Japan is a country with very limited natural resources, and it has been the richest country in Asia for a long time. On the other hand, it is easy to predict that some Third World countries that currently are rich because of immense reserves of natural wealth while not being burdened with large populations will slide back when the natural resources are depleted.
But why are the people of some countries doing well, in spite of the destruction brought by lost wars, and in spite of the lack of natural resources, or an unfavorable climate?
It’s wrong to search for just one answer. There are many aspects that determine how well, or haw badly, a country will fare economically.
Furthermore, in some cultures, parents and the society put more value on education than in others. Societies that have been influenced by Confucian teaching, from Singapore to Korea, will likely feature more educational drill than, for example, Islamic societies.
As in protestant Christianity, societies guided by Confucian teachings will also be more likely to regard business success as a consequence of righteousness, thus propagating an ideology that is conducive to the accumulation of riches.
The reason why poor countries are poor depends on many aspects. Some of these may include:
they have borrowed
more money than they
can afford to repay.
they suffer from lots of
natural disasters like
droughts, floods and
earthquakes (Africa, Haiti, Mexico)
the people who live in
them have not
bothered to get a
good education (Africa)
they have been
encouraged to
borrow money from
the richer countries
and have had to
pay it back with
a lot of interest.
they have corrupt
governments (Poland :P )
parents have too
many children (rural China)
rich countries have
stripped them of
their resources (diamonds in South Africa)
they didn’t spend
the money they
borrowed
wisely
they have been
involved in wars (African tribes)
You can come up with many examples to back these up.
Why countries remain poor.
Why do some countries remain poor? Is it because they lack adequate resources? This was a popular reason sometime. Is it due to overpopulation? The most populous country in Europe is the Netherlands, and the most populous state in the US is New Jersey. Both are among the most prosperous. Could it be lack of brains? India has many skilled people who cannot find jobs.
Every year technology gives the world new ways of doing things with less labor and usually with less consumption of material from other parts of the economy. The fact that the standard of living of the average American worker is incomparably more satisfactory than that of the average Hindu worker, and that in the US working hours are shorter and children are sent to school and not to the factories, is not an achievement of the government and the laws of the country. It is rather an outcome of the fact that that the capital invested per head of the employees is much greater than in India and that consequently the marginal productivity of labor is much higher. This is not the merit of social policies. It is the result of laissez faire methods of the past which abstained from sabotaging the evolution of capitalism.
Blaming the European powers for the poverty of the masses in their former colonial empires yet do nothing about the status quo is like sitting by the rivers of Babylon and weeping, but like the proverbial four lepers who were banished from mingling with the rest of their country folk, we should ask ourselves, Why sit here till we die? Economic backwardness in countries endowed with rich natural resources hurts the interests of those whose standards of living could be raised if a more appropriate mode of utilizing this natural wealth was adopted. The conflict between the haves and have nots is real but it is present only in a world in which any sovereign government is free to hurt the interests of all peoples by depriving the consumers of the advantages of better exploitation of the country’s resources. It is not sovereignty as such that makes for war, but sovereignty of governments not entirely committed to the principles of the market economy.
A country will fail to progress economically if there is an insatiable unproductive income sink. Whatever extra income the country gets will go into this sink. Some countries are dominated by the sink of oppressive and unproductive nobility that conquered the country and regards its people as part of the machinery. The sink of shying away from technology, ever increasing regulation, lawsuits and commissions of inquiry that never bear fruit is prevalent. There is always a way out for those with will and resolve.
Helpful link: http://www.metacafe.com/watch/2231034/cycle_of_poverty_why_poor_countries_are_poor/