Can a Poor Country Become Rich?
By Kamala Sarup
Can the people of the poor country realistically expect to gain more wealth relative to other countries in the future?
To answer this questions, it is necessary to state the specific requirements for higher incomes and then look
historically at the geographies, cultures, economies and polities that affected these requirements for the tabulated
countries to see if some generalizations can be drawn that will be useful to country leaders and their contenders. In
doing so, we must recognize that we indulge outselves in a value-judgment: acquiring material wealth is "good", and not
doing so is "bad". This statement acknowledges the leaders in countries who eschew these values, who prefer to spend the
studies and labor of their people in the pursuit of spiritual wealth, who consider material wealth a necessary evil that
must be tolerated only to the extent of sustaining life and no more.
Note, too, that we are talking about relative wealth, i.e., the wealth of the rich countries versus the wealth of the
poor countries. There will always be an increase in absolute wealth, in varying amounts, by all countries because some
wealth will inevitably spill over from the rich countries to the poor ones via trade, industrial globalization (the
transfer of businesses from rich to poor countries) and repatriated income from nationals working in foreign lands.
However, a perennial state of poverty in a nation leads inevitably to revolution, or emigration, or both, or to
absorption by other countries.
The direct causes of per capita income and living standard increases are technologies, new and old. These are the tools,
machines, materials, power sources, medicines, and manufacturing and commercial practices) that are transformed into
consumable goods and services comprising basic living standards that are summarized in per capita income statistics.
Technologies affect living standards in three ways: (1) They create goods and service that people want, but don't have.
Automobiles, telephones, most medicines and medical care did not exist at one time, but were created by innovators. (2)
They improve the quality of goods and services that people already have. Medicines, foods, clothing, medical care are
improved compared to those available in former times. (3) They increase the availability of goods and services to more
people by reducing the effort, waste, and cost to produce them.
Food, clothing, housing, medicines and medical care became cheaper and, simultaneously, their quality improved since
earlier times. Technologies and associated incomes devoted to preventing people from killing and stealing from each
other, i.e., judiciaries, prisons, police and military personal and institutions, restrict their being used to raise
incomes and basic living standards, so however necessary they are in a world of aggression and acquisitiveness, they are
counterproductive to raising incomes.
There are other ways to increase per capita incomes, of course, but they are limited. Leaders can put more people to
work and compel them to work harder. But how far can you push people? Maybe an additional 10%, and then what? They can
extract more raw materials (ores, lumber, etc.), assuming they are available to exploit, but there are limits to how
much can be obtained and used. They can put more land under cultivation, but that too is limited by people's appetites.
As an alternative, a poor country that wants to be richer cannot expect to develop its own technology.
That would futile because it would take a very long time, and in the meanwhile, the rich countries would have obsoleted
it with newer technology, or else conquered the country with its more advanced military technology to use its land and
resources for the people of the conquering country. Therefore, a poor country must import technology that produces more
and better goods and services for its own people and for producing goods and services for trade with foreigners.
This acquisition of technology requires large amounts of money ("capital"), which cannot be accumulated at home because
that requires technology. It's a vicious cycle: technology depends on capital, which depends on technology, etc. Karl
Marx acknowledged this cycle in his discussion of "M-C-M" (money-capital (= technology)-money). Thus, an initial loan or
grant of "seed money" is required by poor countries from rich countries. Such loans, as we have seen from World Bank,
IMF, and WTO efforts, do not necessarily make poor countries rich. There is an complex interplay of technology,
geography, culture, economy and polity, that produce unknown, uneven effects, thus preventing guaranteed success of
capital and technology inputs.
Geography is important in determining whether a country has any prospects of becoming richer. Countries that have poor
transportation facilities must devote much of the acquired technology to improving it. This was done in the formative
years in the U.S. Otherwise, supplies cannot reach producers and products cannot reach customers cheaply enough to be
bought by those with modest incomes. Mountanous countries and those without access to navigable rivers and oceans are
especially disadvantaged in their quest for wealth, since the capital and technologies to "move mountains" and "tame
water" are prohibitively expensive.
These countries will remain relatively poor. Even within countries with relatively few mountains and many waterways,
such as in the U.S., the government of which has spent enormous sums of money, effort and technology to reduce the
inequalities of location, the poorest people today are located in mountanous, waterless regions. In the U.S., the state
counties located in the appalachian, rocky, and ozark mountains are the poorest. In contrast, those counties located in
watered plains are the richest. Scanning the U.N. list from top to bottom, the only rich country that has too many
mountains and too few navigable waterways is Switzerland.
However, its geographical disadvantage is offset by its geographical location at former trade routes between rich
countries that allowed it to accumulate sufficient capital and technology to "move mountains" (or, at least penetrate
them with tunnels and cross the valleys with bridges) and prosper. The Balkan countries in southeastern europe enjoyed
no such advantage and suffered economic stagnation.
Switzerland also has the advantages of culture, economy, and polity to which we will return below. By contrast, scan the
list at the bottom. There you will find nations with too many mountains and too few navigable waterways: Tajikistan
(153), Nepal (150), Mongolia (141), and Bhutan (140). If Afghanistan and Tibet were included, they would, no doubt, also
fall into this group for the same reasons. Therefore, the geography of a country is an important determinant of its
ability to achieve greater wealth.
In particular, countries with too many mountains and too few waterways are unlikely to become richer relative to other
countries, although they certainly will become absolutely richer because of the inevitable trade of cheaper goods and
services provided by their richer neighbors. However, absolute wealth breeds envy by its citizens who see the richer
countries enjoying goods and services which they cannot afford, and this envy may lead to revolution or emigration, or
both.
The use of technologies depends not only on geography, but also on culture. Nations that have no basic schools will
forever be dependent on the largese of the wealthy nations. How can you teach a farmer or factory worker to perform
simple tasks efficiently if he/she cannot read or write? Those nations that have a developed educational system, but
whose leaders prefer to teach children how to read and interpret their holy books rather than mathematics, science,
engineering, and programming may achieve spiritual wealth, but surely will not achieve material wealth, because
technologies depend on technical education.
We are talking here, not only of innovative scientists and engineers, the unattainable for the poorest countries, but
technical operators, i.e., "technicians", the people who must know enough math and science to make small decisions
involving the operation of increasingly complex machinery. Again, scan the list of countries below and you will clearly
see that the richest have highly developed primary, secondary, and university scientific, engineering, and technician
educations available to most of its population, both men and women. In contrast, look at the lower half of the countries
(87-174). With a few exceptions, like China (102), Philippines (104), Indonesia (114) and India (115), and the S.
American countries, the educational systems are abysmally antiquated.
Therefore, even if these countries had adequate technologies, which they don't, they would not even be able to
adequately maintain imported technologies because of their poorly educated technicians. With regard to religious
practices, again from a materialistic viewpoint, the rich countries have long ago made the pursuit of religious values
subsevient to those of wealth acquisition. Their schools provide the education consistent with that end. On the other
hand, those countries that prefer to spend time and education on religion matters cannot expect to enjoy high per capita
incomes unless they are among the fortunate few that sit above precious petroleum, gold or diamonds required by the rich
countries.
The use of technologies depends not only on geography and culture, but also on the economy and polity of nations.
Subsistence economies, like those of the nations' aboriginies, resulted in their subjugation and doom by people with
more advanced economies that featured the division of labor, technologies, and trade, i.e., capitalist economies.
Furthermore, feudal, socialist, and communist economies all over the globe, from small utopias (New Harmony, Lanark,
Oneida in the U.S.) to colossal nations (Russia, China), with very few exceptions, have given up on their attempts
establish egalitarian societies because equality and incentive are incompatible. Why work hard when you get the same
reward as your dumb and lazy neighbor?
Where they failed, leftists and fascists removed these liberal governments, but ultimately failed to provide an
adequate prescription for per capita income advancement, either my improving technologies or conquering other countries,
or both. They are mostly obsoleted today. Additionally, all attempts by leftist governments to create classless
societies, resulted in merely replacing the capitalist classes with bureaucratic classes, the general population
remaining as poor as ever. This was certainly true of of the U.S.S.R., China, and all eastern european countries under
the hegemony of the U.S.S.R.
All the richer countries have capitalist economies and most are democratic In these countrieswhen inequalities generated
by capitalism became too great, the exploited pressured their government representatives to pass laws that relieved the
poorer segments of the population. Returning to new, revolutionary leftist governments, in the modern world, where would
such a government obtain capital and trade to improve the living standards of its people? There are no large leftist
governments with such excessed of money that they can support a poor leftist government until it becomes
self-sufficient, a la the U.S.S.R. with Cuba.
The rich capitalist countries certainly have no incentive to lend money to leftist governments as a matter of ideology.
Best that a new leftist government can do is redistribute income from the rich to the poor as was done in revolutionary
Russia, China, and Cuba, but then what?
Redistribution benefits the poor at the expense of the rich, but it does not promote increased incomes generally because
of the lack of incentives. Therefore, where does it obtain the capital and technology to increase incomes, if the
capitalists will not provide it? Inexorably, the lack of incentives under socialism, communism, maoism, or any other
leftist brand will lead to to malaise and poverty, as it did in Russia, eastern Europe, China and Cuba.
In summary, the kind of economy and polity determine the ability of poor countries to become rich and the successes of
democratic capitalism have prevailed over other forms the world over. There are ample lessons in the 75 years of wars to
reach the simple conclusion that democratic capitalist nations are successful, and totalitarian socialist nations are
not.
From the above discussion, it is clear that a country with an unfavorable geography, or culture, or economy or polity is
severely handicapped to make sufficient technological advances that increase the wealth and living standards of its
people. It is likely to remain poor, despite the enthusiastic and sanguine projections of its leaders, planners and
would-be leaders, the revolutionaries. Furthermore, countries with a combination of unfavorable geographies, cultures,
economies and polities are doomed to remain relatively poor and, like beggars, will continue to depend on the altruism
and largesse of the rich.
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(Kamala Sarup is associate with Peace Media e-magazine http://www.peacejournalism.com/)