Bottom billion why the poorest countries are failing

There is one exception: the US. The US allows Kenya to export shirts duty-free into its market. Europe does not. Even the few African countries that are allowed duty-free access into Europe get blocked by absurd technical requirements: Lesotho sells thousands of shirts to America, but they do not satisfy the regulations of the European Union. The G8 could easily adopt a common set of rules for these African exports that would generate jobs across the region.

I proposed this to the G8, but they spent their time posturing over aid commitments. A second policy issue is that many of the countries of the bottom billion are now in the throes of revenue booms from oil and other minerals that dwarf any conceivable aid flows. The last time this happened was thirty years ago and it proved a disaster.

The money corrupted the local politics so badly that not only was it wasted, it impoverished, sometimes even leading to civil war. Can the governments of developed countries do anything to reduce the risks of repetition? Well, where do corrupt politicians put their money? They certainly do not leave it in their own banks, it comes to banks in developed countries.

And what do developed country banks do? Basically, they keep quiet about it. Is this a necessary consequence of banking secrecy laws? No it is not.

If the money is suspected of having terrorist associations then, very sensibly, we now require the banks to blow the whistle on it. But if its stolen from the ordinary citizens of the bottom billion, well that is just too bad. Collier identifies four traps that, he believes, explain the performance of the bottom billion: the 'conflict trap', the 'natural resources trap', the trap of being 'landlocked with bad neighbours', and the trap of 'bad governance in a small country'.

Conflict is a trap because it both causes and is caused by bad economic outcomes. Conflict has economic costs in addition to human costs, reducing growth and income levels.

But slow growth and low levels of income increase the risk of conflict, creating a vicious cycle. Having abundant natural resources also, ironically, tends to lead to slow growth, a phenomenon known in the development literature as the 'resource curse'.

The resource curse operates through a number of channels, including the difficulty of managing highly volatile government Use this link to get back to this page. The Bottom Billion: Why the poorest countries are failing and what can be done about it.

Author: Paul Segal. Trade is more likely to lock these countries into natural resource dependence than to open new opportunities, and the international mobility of capital and skilled workers is more likely to bleed them of their capital and talent than provide an engine of growth. The problems of the bottom billion are serious, but fixable. Change will have to come from within, but external actors can use a range of policy instruments to encourage steps towards change:.

Full text - pages Summary This book argues the real challenge of development is the small group of countries that are falling behind and often falling apart. These countries are caught in one or another of the following traps, which have kept them stagnant: The conflict trap : Seventy-three per cent of people in these countries have recently been through civil war or are still in one. Some of them are stuck in patterns of violent political conflict in the form of internal challenges to government.

Wars and coups keep low-income countries from growing, and dependent on primary commodity exports. Because they stay poor, stagnant and dependent on primary commodities, they are in turn more prone to wars and coups. The natural resource trap : Twenty-nine per cent of the bottom billion are countries in which resource wealth dominates the economy.

A low-income, resource rich society is likely to become an autocracy or lopsided democracy with no checks and balances, and is in turn unlikely to grow.