Social Sciences and Humanity Studies Academic Blog

The Bottom Billion : Why the poorest countries are failing and what can be done about it

Posted in My life by Shekhar on June 7, 2012

 

 

The Bottom Billion

Why the poorest countries are failing and what can be done about it

Author: Paul Collier

 

 

Paul Collier’s concern for the group of poorest people- ‘the bottom billion’ in this book is reflected through his insights and statistics- which not only explains why those ‘left behind’ poor people fell in the trap but also gives way outs to break those cycle of traps and hold the ladder to sustained development path. Collier quotes-‘The bottom billion has missed the economic boat’- and to make ‘turnaround’, he provides three ways to escape out of poverty trap.

Four traps

The author identifies recurring civil wars as the first trap- a situation which enable imbalance between ethnic groups with one tending to outnumber others. Also, there might be the supply of natural resources like diamonds or oil, which simultaneously encourage and help to finance rebels and terrorist.The second trap is ‘resource curse’ or ‘Dutch Disease’- that creates hostile environment for the ownership of natural resources like diamond and oil reserves. To free such curse- one can learn from the Norway’s policy of limiting rent-seeking and forced resources revenues. The third trap is Geography or level of productivity existing among neighbouring countries- which allows the host country to catch up the development opportunities of neighbouring countries. Collier gives the example of developed landlocked country Switzerland having neighbouring countries like Germany, France and Italy. The fourth trap is the bad governance or type of political system existing in the country.

 

Three Way-out

Collier has felt the need of military intervention (for at least 10 years or more) in poor countries especially located in Sub-Saharan Africa to break the cycle of poverty and civil war, Also he finds the implementation of laws, statutes and charter resulting in controlled corruption, flourishing of democracy, budget transparency and good investment environment. Unrestricted access to the market of high income countries for labour intensive exports goods of The bottom billion is another way-out to break the poverty trap, according to Collier because by only removing tariff barrier and diversifying quotes for exports, these ‘58’ trapped countries can compete in the global market and increase their trade profits.

 

Will three way-outs for four traps work out?

Collier’s solution to the problems of the 58 trapped countries nourishing nearly a poorest group of 980 million were derived from his 30 years of experience in development sector and some of his important findings. Those finding states that among the bottom billion countries, 73% were trapped in recurring Civil War and violence, 29% were suffering from the scarcity of natural resources, 30% countries were landlocked with unproductive neighbours and 76% states had bad governance and ineffective economic policies. Aforementioned findings speaks that those bottom billion characterizes themselves with different obstacles and Collier’s attempt to overcome those obstacles theoretically are yet to be seen in reality. But his intentions are true.

Another point to be noted about this book is about Collier’s concern for Africa where 70% of the bottom billion survives, so Collier argues that the foreign aid flow should make sure that these 70% bottom billion residing in Africa are not deprived of the services they are supposed to be provided by different multilateral and bilateral agencies. Also, Collier has serious doubt over the effective distribution of the foreign aid in addressing the poorest of the poor. As according to him, foreign aid should reach the 1/6 of total humanity in reality as the remaining 5/6 are either richest or belongs to Asian driven economy- already holding the ladder to development path (China and India). He derives a statistical conclusion – ‘US $ 75 billion a year of foreign aid can save Africa and help it escape out of poverty trap’.

The Bottom Billion: Relevance for Nepal

How do we compare inflicted and starved Malawi with politically inflicted Nepal? Collier’s book tempt us to think ourselves suffering inside the poorly equipped health post in a small village of Malwai or being one of the 10 orphan nourished by a only-remaining grandmother in the family- the tragic result of HIV. For Nepal, this book provides a future outlook and signs of warning. These warnings can guide and motivate Nepalese policy makers and development thinkers to act strategically and honestly if Nepal is to avoid being another ‘Malawi’ or ‘Congo’.

The four traps discussed by Collier are truly applicable for Nepalese context because Nepal though is included in the list of ‘developing country’ but in reality characterizes the starved and inflicted Sub Saharan countries like Malawi. The centralized infrastructural development and state planning has resulted in vast income disparity between rural and urban citizen often giving rise to relative and absolute poverty.

Collier’s 3 ways to escape the poverty trap can be very useful for Nepalese policy makers if they are implemented successfully. For instance unrestricted access to the market of high Income countries is very important for land locked countries like whose trade business in highly depended on labour intensive product like textiles and garment. Since the number of export quotas for Nepal in US and Britain are falling due to various quality and competitive factors, Nepal’s trade deficits are likely to prolong in coming years. 

Also, Collier’s concern for geo-political factors in determining a host country’s progress can be explained by looking at the China and India- the two neighbour of Nepal likely to reshape the global politics and economy. But due to India’s monopoly on Nepalese market and Nepal’s passive trade relation with China, these two neighbours have been proved unproductive for Nepal.

Conflict trap as hypothesized by Collier is reflected in Nepal’s decade long Maoist insurgency and the rise of armed group in Terai belt of Nepal after Maoist’s arrival to peace politic. These conflicts are showing its negative influence even in constitution writing process – the phenomenon which is lingering since 2008. Natural resource trap is another such example. Despite having vast potential, Nepal has not been able to produce output from them and such issues have been frequently repeated issues in Nepalese media. Similarly, Nepal has been suffering from bad governance and has not been able to escape from corruption, trade union turmoil, restricted bureaucracy, and anarchy existing in political parties.

Hence, Collier’s hope of re-visualizing ‘the bottom billion’ as equal to that of US and European citizen sounds possible and hence this hope must inspire Nepal to follow Collier’s pathways to prosperity- otherwise Nepal will again miss the boat once ‘turned around’.

Shekhar KC (08)

MDEVS First year

Book Review Assignment -1

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: