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Ask HN: How do countries get out of poverty?

• slambam 12y ago
  I think it is energy? I live in Canada and our middle class has the highest income in the world but we also use the most energy per capita. That's the simplest, other than entropy, life is about reducing entropy, richer people spend more money on insurance. Civilization tries to reduce surprises for its citizens.
• bikamonki 12y ago
  In the same way that you'd get out of poverty: by transforming resources into products and/or services and selling them. Your resources might be time (labor), skill/knowledge and capital (land/natural resources), same with countries. Take into account that many countries are rich (i.e. full of resources) but can't manage to climb out of poverty due to mental/social obstacles like corruption, religion, culture, etc. I am not an expert, just my opinion.
• yen223 12y ago
  Poor countries need to make strategic long-term investments that will enable future economic growth, and somehow resist the urge to blow whatever resources they have on white elephant projects. I'm talking about investing in infrastructure, healthcare, and education; not in building the world's tallest tower or golf courses in the desert.
• known 12y ago
  A nation cannot productively govern no more than 2 million citizens. Decentralize World into Cantons as in Switzerland https://en.m.wikipedia.org/wiki/Cantons_of_switzerland https://en.m.wikipedia.org/wiki/Cantons_of_switzerland which will create more local jobs in the economy.
• known 12y ago
  To Curb Global Poverty Every 3rd World Currency Should Be Pegged To OPEC Oil For 4 Years
• ahi 12y ago
  Ask the World Bank/IMF for advice. Then do the exact opposite. More seriously, historically it has required a strong industrial policy with selective and targeted trade barriers / industry support. With poor governance this is incredibly difficult to pull off without it devolving into kleptocracy. Unfortunately, the n for countries that have gone from poverty to OECD level wealth is very small so history might not be a useful indicator. Frankly, I think Malawi is probably just screwed. Limited resources, landlocked, difficult neighbors, extreme ethnic diversity, etc
  • refrigerator 12y ago
    I noticed during my Googling that everyone seems to hate WB/IMF - how come?
• massappeal 12y ago
  This is a very complex question; I'll see if I can help. Before I begin though, let me just say that you could take an entire undergrad and postgrad course on the economic, social and political development of Africa, because non-African nations have almost as much to do with the current state of Africa as the African nations. Let's start by addressing why some countries are poor. There are many reasons some countries are poorer than others, and I would hate to over-generalize, but I'm going to. Access to International Trade, having resources worth trading Internationally for, the domestic resources available to develop a valuable workforce and a stable and effective form of governance. Generally speaking. Malawi for instance. Even if it had some tremendous resource it could sell in International markets, there aren't any regional buyers to pay for the development of further infrastructure. It doesn't have direct access to major trading centers and routes. If it wanted to develop a workforce to export something of value that wasn't dug up from the ground, it would need investment in order to pay for the education, infrastructure, etc. And that gets us into foreign aid and development banks, but we're just going to avoid that for now. But even if it had all of that, the purchasing power of International markets greatly effect the International distribution of wealth. Great example: The U.S. is one of the top oil-producing countries in the world. Despite this, we continue to import almost all of our oil. Why is this? Because American energy companies make more money by selling our oil internationally than they would domestically, so they do, and we end up buying cheaper oil from somewhere else. Even if Malawi was swimming in some resource, maintaining domestic ownership of said resources and making it cheap enough to compete with countries that heavily subsidize certain industries can make it impossible to repeat. Another great example of this: NAFTA. The North American Free Trade Agreement is a FTA between Canada, U.S. and Mexico. We promised Mexico that by enacting this agreement, American companies would move all their factories from Asia to Mexico, employing millions. What happened though was that even after NAFTA, it was still cheaper for us to manufacture in Asia. But what the U.S. and Canada got in exchange for the "promise" was the removal of import tariffs on Financial Capital and Corn, among other things. As it happens, the U.S. subsidizes the Corn industry here to the tune of $9-12b per year. As a result, it became cheaper for Mexico to import Corn from the U.S. than it was to buy domestically. And in case you don't know this, Corn ("maize") is a huge staple of Mexican agriculture. They make everything out of corn. So now, all of a sudden, Mexico has millions and millions of unemployed farmers. Who do you think has been rushing to the American borders all these years? On top of that, by allowing us to freely invest in Mexican companies without tariffs, American banks purchased controlling interests in almost all of Mexico's highest-grossing companies. So anytime a Mexican company makes money, the revenue flows back to NYC, rather than back into Mexico. I tried to keep that simple and direct. I'm sure I missed some details on a lot of that, so please correct where I erred. Hope this helped!
• metastart 12y ago
  Study countries like Singapore, Korea. They are countries that in the last 50 years or so were able to escape poverty in just one or two generations. Maybe even Vietnam or Thailand which I think are not quite in poverty so not nearly as prosperous as Singapore or Korea. The education system in both countries is really really intense -- like Korean kids go to school at 8am and get back home at 9pm!!! It's very hard to say -- obviously or there wouldn't be poor countries! For example, there are a lot of attempts to explain China's success versus India. Indians will blame corruption -- but there's massive corruption in China. Some observers say that it's China's iron-fisted rule that gets things done that's driven development instead of India's clunky not-so-effective democracy. But most observers seem to find and you would expect that democracies tend to have economically better off populations. India to some extent has become internationally famous as a hub for software development -- and it's certainly helped India and positions India fantastically well for the future as softwares gets more and more important. But if you look at India's accomplishment to date and the IT industry -- it looks really pathetic actually!! But that's how you start. India's whole IT industry is around $100 billion/year in revenues for something like 2.5 million people. IBM does that much in revenues with maybe 400k people or 16% as many people!! Google does $60 billion/year or 60% of the entire Indian IT industry with something like 3% as many people...so Google is like 20x more efficient!!! So the Indian IT industry is literally just throwing cheap labor at problems -- not very creative or intelligent. But anyway, that's how you start. I wonder if you can go back and look at when China's manufacturing hub was $100bn/year -- maybe sometime in the 1980s and see how it evolved versus India's IT industry growth, and also how wages increased. Maybe India can follow such a trajectory as China did. China now wants to build up IT! Just a few thoughts, observations!