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The definition of 'getting rich' in this article seems rather vague. Are we talking about the average standard of living of the entire population, or the accum
by photochemsyn 4y ago
The definition of 'getting rich' in this article seems rather vague. Are we talking about the average standard of living of the entire population, or the accumulation of wealth by a handful of privileged elites? A gross measure like GDP doesn't distinguish between the two situations, does it?
The general trend in poor countries with exportable raw materials over the 20th century has been this: wealthy and powerful countries make deals with small groups of elites to extract those resources and ship them to the wealthy countries industrial production sectors at relatively low prices, while propping up the local tinpot dictators with weapons and cash so they can keep control of their populations. Saudi Arabia is one example (America being the wealthy patron), Niger is one example (France's supply of uranium ore), and that's how the Soviet Union operated in the various 'stans of Central Asia as well. The poor countries may have 'become rich' but in general, their average standard of living remains extremely low relative to the industial wealthy powers.
The only way for such countries to raise their overall standard of living is to add value to their raw materials domestically by building up their manufacturing potential. For example, if they have lithium deposits, they should be building factories to convert the lithium into batteries, and then sell the batteries on the global market. Now they have an industrial center, which brings in revenue, and they have begin to have a well-paid professional sector, medical and legal experts, a higher standard of living and so on.
At least until their brilliant financial gurus realize they can increase their personal wealth 50-fold by shipping the entire industrial sector to some Third World hellhole and wrecking the whole system, like Wall Street did to the Rust Belt in the United States.
- aetherson 4y agoIn practice, when GDP rises significantly, average standard of living rises as well. Saudi Arabia's GDP per capita is $20k. Niger's GDP per capita is $565. I think that Niger and Saudi Arabia's living standards are about on par with other countries for those per-capita GDPs.
- hither_shores 4y ago> Saudi Arabia's GDP per capita is $20k. Saudi Arabia's nominal GDP per capita. Their GDP (PPP) per capita is more like $50k - comparable to the United Kingdom, which has significantly better living standards.
- pas 4y agoAlso in a very unequal society like SA the average doesn't mean much.
- aetherson 4y agoBut... the reason why their PPP GDP is much better than their nominal GDP is exactly because they aren't actually that wealthy a nation, and so anything involving human labor there is cheaper. If Saudi Arabia actually developed better (whether by finding new, exciting natural resources to export or by developing some kind of productive economic sector not based on natural resource expansion), their nominal GDP would grow but the difference between their nominal GDP and their PPP GDP would shrink. The point here is, Saudi Arabia is not particularly wealthy, and that, not their inequality, mostly explains their low standard of living. It is not the case, as the thread-starter implied, that Saudi Arabia has a high GDP but due to massive inequality it's all in the hands of the royal family.