How does a country exit being poor?

[Eren Eeager]

You know we here always talk about the USA, china,Russia and all the economically strong countries.But still, we don't talk about poor third world countries. How does a poor country improves its economy? How does that happen? What does it take? 

Edited November 21, 2020 by Eren Eeager

[howtoyellow]

Kinda like how an individual goes from being poor to rich.

Good Food and Health

Education and Training

Healthcare

Infrastructure(Transport,Electricity,Water,Internet,etc)

Access to tools

and a healthy social life.

 

Its funny how these things can be achieved as low as on Stage Purple in some scenarios.

 

Edited November 21, 2020 by howtoyellow

[Leo Gura]

Massive economic development. China is a good example. It went from poverty to success in 60 years.

[Preety_India]

Export business and trade 

Education and good health for most. 

Upgradation from stage Blue/red to stage Orange /stage Green. 

Low divorce rate and healthy family units 

Low population. Balanced population. 

Zero corruption 

 

[PurpleTree]

the neighbouring countries are also hugely important, especially if you're not a huge country

if you're in a bad neighbourhood it's hard to get better

[Leo Gura]

You need some unique service or resource to sell.

[Preety_India]

You can sell software and high quality technology services. 

 

[howtoyellow]

Selling a unique service or a in demand resource is not a sustainable way,especially if your 90% economy depends on that. One major turn of events and back to eating dates and milk.

[Leo Gura]

11 minutes ago, Preety_India said:

You can sell software and high quality technology services. 

No you can't. That assumes high development already.

[Preety_India]

12 minutes ago, Leo Gura said:

No you can't. That assumes high development already.

What unique product/service can a third world country sell that a first world country possibly could not have? 

 

[Hello from Russia]

20 minutes ago, howtoyellow said:

Selling a unique service or a in demand resource is not a sustainable way,especially if your 90% economy depends on that. One major turn of events and back to eating dates and milk.

Well, more than half of countries live like that if you do some research on economics. They typically try to diversify the economy after getting some success, though, but the main economic vehicle a lot of times remains the same 

Edited November 21, 2020 by Hello from Russia

[Preety_India]

I feel like eventually all economies will finally collapse because a permanent stable economy in my mind is just not sustainable. 

So my long term projection is slight elevation in world economy and then chaos and decline. 

The world needs something completely different in order to sustain but I'm not sure what that thing really is. 

(by the way why do countries want to get rich. The kingdom of Heaven is not meant for the rich anyway.) 

 

Edited November 21, 2020 by Preety_India

[Heart of Space]

1 hour ago, datamonster said:

Depends on a variety of factors, but the most fundamental one is always stability. Without relative stability nobody is gonna start investing and building factories and infrastructure in a country. 

It's interesting to study some recent cases of countries that have moved from extremely poor to extremely wealthy in a matter of only 50 years or so: China, South Korea, Singapore, Japan, etc.

And it looks like the next big success stories are already in the making: Rwanda, India, Vietnam, Kazakhstan, Ghana, Kenya, Uganda, just to name a few.

Don't confuse these countries with extremely poor ones like the DRC or Somalia. They are already on a completely different level.

It's also fascinating to see that some countries like Venezuela were extremely lucky to have tremendous natural resource wealth. But in this case they squandered the money they made from it like an immature lottery winner through reckless government spending, bad economic policies and corruption. On the other hand, countries like South Korea have very few natural resources, but they implemented the right policies and made many good decisions, which ultimately lead them to where they are today.

The YouTube channel Economics Explained is a great resource to learn about these case studies at a high level.

You've studied economics, right?  What are your favorite countries to read about in terms of economic case studies?  

For example, when I was trying to understand national debt I looked at Japan and Greece which was fascinating and very educational on that subject.  

[Gesundheit]

The only practical way to solve this problem is by fighting all forms of corruption within the government. But this alone is not an easy task because governments in poor, and underdeveloped countries are highly dependent on corruption. The less corrupt the government gets, the more unstable it becomes and the faster it loses its grip and power over the country. Why is this the case? I'm sure I have the answer even though it's very complicated, but for lack of fluency, I can't articulate it by any chance. Basically, all you need to know is that when it comes to power and politics, money is the main driver and nothing else interferes. And the people/families holding the most money in said poor country are not in full agreement with one another. Each party is waiting the other to make a mistake so that they can kick them out of power and replace them with other more collaborative families or even take their place by themselves without having to involve new players into the dynamic. Typical chimp behavior. So there is a hierarchy within government and these people are corrupt and are setting traps for each other all the time. Families fighting over power, some go up the ladder, and others go down. This is the case in my country, but I don't assume anything different about other governments. Power dynamics in politics should be universal. Even though there definitely are different levels of corruption depending on the government structure and some other factors. Poverty is one factor too, so it feeds into the problem even more. Economy has a positive feedback loop. If you're poor, you're gonna be poor for the longest time possible. And if you're rich, same thing. Unless you're crazy or something crazy occurs of course.

[Eren Eeager]

@datamonster Wow thanks for the detailed thread. I will be studying every case you presented , looks like juicy stuff.

5 hours ago, Leo Gura said:

 

[Heart of Space]

2 hours ago, datamonster said:

Lots! I love the topic

First, Norway vs Venezuela vs Saudi Arabia. All nations with vast oil resources but very different approaches to managing them, with mixed results. Many lessons to be learned here. 

Second, North Korea vs South Korea. NK has better geography and tremendous natural resources, so how has one become one of the richest nations on the planet and the other one of the poorest? - Again lots of things to learn. 

Third, the rise of China is deeply fascinating. Especially comparing the Chinese model to the American one.

Fourth, I'm starting to learn more and more about African countries. There's huge potential in many of them and they are evolving at a rapid pace: Rwanda, Ghana, Uganda, Kenya and Ivory Coast in particular.

Fifth, Kazakhstan vs Uzbekistan vs Tajikistan. I'm still learning about these, but it's also fascinating how Kazakhstan is developing rapidly and kinda emerges as a bridge between China and Europe due to good political relationships, while its neighbors are being left behind.

Sixth, India is a whole nother topic in and of itself. They have a quite Western-like legal system, a large English speaking population and an educated workforce. Good prospects for the future!

Seventh, Bangladesh. How did it come about that they used to have like 5+ children per family only a fee decades ago to having as many children as Americans do on average today? - Interesting development!

Eighth, the DRC. How come one of the most resource rich country in the world is the poorest? And why don't they seem to be getting out of that misery? - Sad, but illuminating to learn!

Nineth, Liberia. @Leo Gura once shared a fascinating documentary on his blog. It's kinda crazy what's happening there!

Tenth, Germany. The rise and fall of Hitler and how it became Europe's greatest economy.

Those were a lot of examples. Sorry as you can see I'm quite passionate about this topic

For sure Japan and Greece are fascinating, too! If you're interested in understanding the topic of debt it's also important to understand the concepts currency, inflation, bonds and how money is created.

When it comes to countries I think there's no country not worth studying. There's so much to learn about culture, politics, economics, business and more from every country.

Let me know if you have more case studies if you found any particularly interesting! Cheers

Great post, man.  Exactly the kind of thing I was looking for.  Seems there are a tremendous number of things to read about.  I appreciate you enlightening me on some avenues to go down.  

I've spent a fair amount of time studying monetary economics.  Especially in regards to centralized banking and MMT.  My interest in economics really began in my quest to learn whether or not different social programs like UHC or free college where economically viable.  Economics always seemed like the one last bastion of legitimacy the conservative ideology had when I was younger.  

[No Self]

Natural resource extraction has been one of the biggest historical economic transformers. I don't think anyone has mentioned UAE. Where were they 40 years ago? The more recent bid to diversify into a tourism-based economy was enabled by the earlier discovery of oil and a massive population growth.

DRC has massive natural resources but lacks political stability and has a tragic history. Chinese involvement in Africa may be a good thing in the long term.

That said, being poor is not a problem so long as basic humanitarian needs are present, and population growth is not constantly out-stripping resources. Education is a basic humanitarian need.

[Leo Gura]

13 hours ago, Preety_India said:

What unique product/service can a third world country sell that a first world country possibly could not have?

Oil, rare minerals, cheap labor, factories, tourism, farming, etc.

But of course it's a difficult situation. Which is why 3rd world countries tend to stay 3rd world countries.

But look at India. They are a good example of a 3rd world country that might soon develop into something more thanks to their labor and manufacturing potential.

Basically 3rd world countries have to go through industrialization just like 1st world countries did a century ago. You can't really skip the massive industrialization part.

[Raphael]

17 hours ago, Eren Eeager said:

How does a poor country improves its economy? How does that happen? What does it take? 

Huge stage orange success & progress ideological indoctrination.

[Parththakkar12]

17 hours ago, Eren Eeager said:

You know we here always talk about the USA, china,Russia and all the economically strong countries.But still, we don't talk about poor third world countries. How does a poor country improves its economy? How does that happen? What does it take? 

Productivity, productivity and more productivity. Here in India, most people's lives are all about productivity. Productivity that isn't just survivalistic, but that brings about change in the individual material circumstances of people. Individual and collective.

This is a difficult thing because survival is much more of a grind in a third-world country than in a first-world country. You will have to work harder to survive, so it can be difficult to create positive change in your material life. That's what's going to have to be done though. People will actively resist what you do and the risks you take because recovering from failure can be harder in a third-world country.

Here in India, there has been a collective asking for economic development for decades. Everyone wants it, there is no resistance to it. This is high Blue/low Orange where the collective as a country works together to develop itself economically. Then, as we move higher into Orange, the nationalism will go down and the individualism will go up. India is a good example of healthy nationalism where the collective works together to develop the collective in a united fashion.

In the final stages of this, there will be a need for a falling away of old, Stage Blue control-structures and the need for more individualism. I think India is ready for more individualism right now. This will take India to a whole new level.