Economic Paradigm for Growth and Development - Essay Example

? Position Paper Table of Contents On ‘The Bottom Billion’ 3 Works Cited 8 On ‘The Bottom Billion’ For a billion people living in 58 countries in thedeveloping world, mostly located in Central Asia and in Africa, the existing economic paradigms for world growth and development are failing. For most of the two decades leading up to the turn of the millennium, according to Collier, worldwide growth has failed to uplift their lives and improve their financial prospects, and in fact has led them down a slippery slope of economic decline and misery. This, in spite of the fact that for the greater majority, or about four billion people, and certainly for those living in most of the developed world, the economic systems in place have resulted in improving incomes and a good measure of financial prosperity. The impact of the economic collapse in the failed economies extend beyond incomes, and impact the very sustainability of their entire social fabrics. The strain on the social systems is evident in what Collier sees as poverty traps. There are the civil wars, for one, that are really more about young people wanting change in order to improve their financial lots in life. There are the circumstances thrust upon people due to their location in certain geographies, where countries have the bad luck of being located amidst a generally “bad” neighborhood. Even natural resources in large quantities, such as oil and minerals, are seen as poverty traps too, because they breed conflicts. Finally, a fourth poverty trap is widespread corruption brought about by immature political systems and general bad governance structures. These are confluence factors that all heighten the forces that derail the bad luck countries on skid row, so to speak, and these act like powerful downward forces that prevent these countries from escaping a terminal vortex of misery. Externally the forces of globalization and the imposition of global free markets, instead of helping these countries move up, are actually driving them to poverty even more, because the effect of such forces is to funnel growth and development even farther away from the impoverished billion and toward the developed world, which has the infrastructure and the inertia, as well as the resources, to continue to benefit from the existing order, while the unlucky billion continue to wallow in a vortex of poverty. Collier asserts that there are no easy answers, and that solutions lie sometimes in armed interventions, as well as in the intervention and policing of powerful organizations such as the European Union in order to bring about lasting economic and democratic reforms to the impoverished. This paper takes the position that indeed, the problem for the bottom billion is one that is characterized by a high degree of complexity, and the solutions are there, but executed badly Collier; The Observer; Goodreads; Riedel 519). Part of the problem with execution is that there are few organizations with the clout and the wherewithal to enforce changes and to see through them in such a way as to effect lasting structural changes (Collier 1-13; The Observer; Goodreads; Riedel 519). Part of the problem of execution too is that the tools have so far been misunderstood, and used in a bad way, and again these issues go back to the general complex nature of the problem and the very massive resources and effort needed to be used in a sustained manner in order to make the proper changes to rescue the downtrodden billion. Moreover, the incentives for helping the poorest of the poor are not apparent on the surface, because as it is those who are profiting from the global economic order are comfortably living without the participation of the poorest. These things take long-range planning and thinking, and the concerted effort and goodwill of those who are in the developed world. Apart from all this, the paper also makes the case for the economic viability of making everyone on the planet, including the bottom billion, ride the economic boat to prosperity. The poorest, when they become economically better, are consumers. The economies housing the bottom billion, when developed, become profitable markets for the rest of the world. There is an economic proposition to helping the bottom billion that can entice profit-oriented western economies to act (Collier; The Observer; Goodreads; Riedel 519). Collier makes a good case for the complexity of the problems facing those countries that have been left behind in the global race to economic prosperity and economic integration by classifying the poverty traps that face them into four. They do not exist in isolation for sure, but that they are interrelated as can be gleaned from the arguments of Collier and those that he cited throughout the course of the book. In the discussion on the causes of civil war, for instance, we see that economic decline and hardship in the affected countries are correlated with higher probabilities of the occurrence of civil war, with the inverse being true, that economic progress goes hand in hand with corresponding decreases in the incidence and probability of civil war. The implied argument from Collier is that such does not exist in isolation, nor are the problems and solutions that spring from this correlation simple to untangle and to fix. In fact, the reverse is true, that this particular poverty trap is mired in a deep tangle with the other traps. Imputing from Collier’s arguments, we see that the other poverty traps reinforce economic decline, which in turn heighten the risks and incidences of civil war, in a vicious cycle. Young men out to destabilize economic and political systems that live them with few opportunities to better themselves are also part of a larger set of forces that perpetuate poverty. The complexity is underlined by the fact that bad governance, for instance, exists in conjunction with poor economic growth, and act as ballast that prevents economies and countries from getting out of the poverty vortex. The other two poverty traps, being in the neighborhood of countries equally mired in poverty and war, and being in a country where natural resources breed intense competition for control, leading to more conflict and more poverty. The poverty vortex is powerful and multi-faceted indeed. The wisdom of Collier is advanced here as valid, with regard to the extreme complexity of the matter. The additional problem moreover is that not only are the problems complex, but that there are few mechanisms and institutions of concerted power and effort that can intervene to bring about an end to the chaos and to the unending cycle of poverty in the bottom of the world economic ladder (Collier; Riedel). This paper takes up some of the prescriptions of Collier with regard to specific action points that the developed world can take to rescue the bottom billion, not as magical silver bullets that can do the trick once and for all, but rather as prescriptions that can strike at the large problem little by little in order to reverse the tide of rising poverty in the affected countries. Instead of one-shot solutions Collier points to the problems with current interventions and how to correct them. These are practical interventions that are mindful of the complexity of the problems and are realistic about what they can and cannot accomplish in the short term. For instance, with regard to the root causes of rebellion and coups, the latter can be instigated by large aid, which successful coup leaders and their supporters can get access to, in the absence of real economic opportunities. On the other hand, rebellions which are of longer duration can be sparked by a naked grab to gain hold of power over natural resources. In both cases long-term interventions are different. In the case of aid, aid when sustained and large are most effective when given after the resolution of conflicts, because then aid acts as a stabilizing factor in the political and social systems. Greater stability in turn can be leveraged to effect greater reforms in governance, democratic processes, and meaningful economic development that has traction. The wisdom here that this position paper gathers and endorses is that it is these kinds of practical solutions and insights that, taken together, can be used to win the long war versus the poverty that afflicts the one billion at the bottom of humanity’s economic pile. This kind of thinking recognizes complexity while at the same time makes a good case for the use of various interventions that have their root in insights from experience. Collier effectively makes a case for recognizing that there are solutions available, but the devil indeed is in the execution and the proper use of the solutions and tools. This vision and way of thinking respects that the problems are indeed a tangled web of interrelated and very deep issues that need to be addressed with diligence and with the concerted effort of those who are prosperous and secure. A combination of aid, the heavy hand of the industrialized nations in some cases to enforce rules and to use arms when necessary, and other tools in the arsenal of the developed world in a sustained manner to be able to make a dent (Collier; Riedel; Rogers). Works Cited Collier, Paul. The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It. Oxford University Press. 2007. Goodreads. “The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It by Peter Collier”. Goodreads.com. 2013. Web. 13 October 2013. Riedel, Rafal. “Recensions/Reviews: The Bottom Billion- Paul Collier”. Canadian Journal of Political Science 41 (2). June 2008. Web. 13 October 2013. Rogers, Cate. “Bottom Billion: Effectiveness Summary”. Australian Government AusAID Office of Development Effectiveness. May 2008. Web. 13 October 2013. < http://www.ode.ausaid.gov.au/publications/documents/bottom-billion-issues-note.pdf> The Observer. “Review: The Bottom Billion by Peter Collier: Paperback of the week: how to escape poverty”. The Guardian/Observer. 11 January 2009. Web.13 October 2013. Read More