Sunday, August 5, 2007

Collier's "Bottom Billion"

Having lived in several developing countries in Southeast Asia, I find the present crusade to "save Africa" led by Bono and Columbia economist Jeffrey D. Sachs bewildering. Frankly, I think these guys are naive. The West is never going to solve the problem of poverty in the most corrupt countries by holding rock concerts and writing ever bigger checks. This approach has already been tried. Money is not the solution, because a lack of money isn't the fundamental problem these countries face.

In my view, Oxford University scholar Paul Collier has taken a much more intelligent approach to the diagnosing the underlying problem of the poorest countries (the "bottom billion") which has led him to propose solutions that strike me as having reasonable chance of succeeding. I haven't yet read his book, but the book review by Naill Ferguson in the New York Times is illuminating. (A post by Bangkok Pundit brought the article to my attention. Pundit asks whether Collier's thesis might lead one to question some basic assumptions about the root cause of violence in the southern-most provinces).

Ferguson explains:
The notion of the bottom billion matters because most of today’s development strategies (for example, the United Nations’ Millennium Development Goals) focus much less discriminatingly on all developing economies — what used to be called “the third world.” But the world is no longer (as it used to be) one-sixth rich and five-sixths poor. Thanks to explosive growth in Asia, it will soon be more like one-sixth rich, two-thirds O.K. and one-sixth poor. It is this last group, according to Collier, that we need to worry about. . .
I think that's a key point, nowadays categories like "third world" or "developing nations" are misleading. Economically Thailand bears little resemblance to Burma or Cambodia, for example. According to Collier the poorest countries have fallen into one (or more) of four "traps":
  1. Conflict. ("Three things turn out to increase the risk of conflict: a relatively high proportion of young, uneducated men; an imbalance between ethnic groups, with one tending to outnumber the rest; and a supply of natural resources like diamonds or oil, which simultaneously encourages and helps to finance rebellion")
  2. "The resource curse" -- for which he coined the term “diamonds are a guerrilla’s best friend."
  3. The fact that ". . . landlocked countries are . . . dependent on their neighbors’ transportation systems if they want to trade."
  4. And the biggest, most obvious factor, ". . . bad governance. "
Collier's two main prescriptions:
  • "African manufacturers need some temporary protection from Asian competition. Rich countries should exempt products from bottom billion countries" from tariffs.
  • "Reflecting on the tendency of post conflict countries to lapse back into civil war, he argues trenchantly for occasional foreign interventions in failed states. What post conflict countries need, he says, is 10 years of peace enforced by an external military force. If that means infringing national sovereignty, so be it."
Recommended Reading: "Zen and the meaning of poor people's debt in Thaksin's Thailand."

1 comment:

  1. I recently attended a lecture by Collier on his book the bottom billion and his ideas appear eminently sensible and are at a far remove from the naive and somewhat deluded proposition that all of the developing world’s problems can be solved by aid. This is not to say that aid cannot have its uses, I believe it has a hugely important role to play in the purchase of drugs, particularly anti-retroviral drugs in order to prevent disease which have a crippling effect on many African nations. However, aid will provide no long term economic benefits and will just lead to these countries becoming far more dependent on the west. A more long term strategy in which the west should help industry to develop is necessary as to provide some sort of sustainable income for these countries. We need to end the ridiculous policy of continually blaming Western, developed countries and globalisation for the lack of development of the bottom billion countries. This is a horrendous distraction from the problems at hand such as political corruption, which will never be solved if all we do is continually guilt trip people into to believing it is the west’s fault and the only way they can help is to give aid to these countries. Instead we should follow the advice of Collier; put pressure on our politicians and demand political stability in these countries and an end to damaging European protectionist policies such as the CAP. The answer is more globalisation not less, it will only be through trade and the development of industry (following the successful example of the Asian tigers, China and India) that these bottom Billion countries will reach an acceptable living standard.


Because all comments on this blog are moderated, there will be some delay before your comment is approved.