The Importance of the State in Furthering the Development of Poor Countries - Coursework Example

The Importance of the State in Furthering the Development of Poor Countries Name Professor Institution Course Date The importance of the state in furthering the development of poor countries in the twenty first century Introduction The end of the Second World War has seen the development of various economies across the world. While different governments had understood that the end of that war marks the beginning of economic, social and political prosperity, other never learnt anything and are still today languishing in underdevelopment (Kothari 2007). Many leaders from underdeveloped countries currently visit developed countries to learn what make the difference between them. Todaro & Smith (2011) contend that one common denominator between countries in the developed countries is that the government had a key role to such development. Today, some people may be shocked to learn that at one point, Singapore was at the same level of economic development with Haiti. However, these countries are world apart in terms of development presently. According to Vásquez (2008), development expert argues that the secret lies in government policies and the goodwill of the people. Based on this information, this paper will analyze the importance of the state in furthering the development of poor countries in the twenty first century. The countries in focus will be Haiti and Singapore. Definition of Development Development is a not a new concept in the 21st century. The concept has been here with us since our existence. Development in this concept entails economic (financial institutions, agriculture, industrialization), social (education levels, life expectancy) and political development (democracy and human rights) (Vásquez 2008). The most common method of evaluating the development level of a country is by comparing its GDP per capita with those of other countries (Kothari 2006). However, higher income in terms of per capita in a nation does not often imply that its citizens are richer compared to ones in lower income countries, since there are numerous factors of human welfare, which are not captured by these indicators (Thirlwall 2006). United Nations professional favors use of human development index to determine the development of a county (Todaro & Smith 2011). This compound index is a straightforward average of the three indexes depicting the achievements of a country based on longevity (life expectancy), health, living standard (GDP per capita and purchasing power). Vásquez (2008) asserts that normally poor counties are characterized by low income, low levels of education, high rates of poverty and low life expectancy among others. Haiti Overview Haiti is a Latin American country which boarder Dominican Republic. The country has an approximate population of 10.8 million people with less than a million living in its capital Port-au-Prince (The World Bank 2013). Haiti is ranked as a highest populated country within the Caribbean Community. Despite gaining its independence first in 1804 among Latin American countries, Haiti has remained very poor. The World Bank (2013) points that Haiti has the least Human Development Index in America. Over the years, it has experienced political violence on several occasions resulting to instability in the government. The recent political violence took place in 2004 in the form of a coup d'état starting from the north of this nation. At the end, the Jean-Bertrand Aristide’s government was overthrown and forced to exile. Nordland (2013) states that an interim administration took over with the security offered by the UN in what was called Stabilization Mission in Haiti. Jean-Bertrand Aristide regime was marred with human rights abuses and economic inequality (The World Bank 2013). Stockman (2004) holds that in 2004 Haiti was also struck by a disaster when Tropical Storm Jeanne happened in the Haitian north coast, particularly Gonaives, causing flooding and mudslide and left 3,008 people dead. Another earthquake happened in 2010 leaving approximately 85,200 people dead and rendering 1.6 million citizens homeless (Sadowski 2010). The number of deaths demonstrates how the government was unprepared in terms of weather prediction and even how to handle disasters. Presently, the country is yet to recover fully from that earthquake. Due to such disasters, poor policies and government instability, the purchasing power parity (GDP) dropped by 8 percent in 2010 while GDP per capita maintained the same rating at 1,200 (The World Bank 2013). Development in Haiti Economy Haiti is ranked as the poorest nation in America. The household survey in 2012, reported that 6 million of 10.5 million Haiti nationals survive below the poverty line which is $ 2 a day and more than 2.5 million are extremely and live below 1 dollar a day (The World Bank 2013). There is a major income inequality. Haiti market economy experiences low costs of labor and are allowed a free tariff access to US markets with its exports. Stockman (2004) contends that its poor state of the economy is contributed by corruption, low access to better education and poverty among the majority of its citizens. Two out of five citizens of Haiti relies heavily on agriculture, mostly small-scale farming to earn a living. Even with such population involved in agriculture to improve the GDP, the government has done very little to enhance the state of agriculture (Marquis 2004). In a nutshell, the Haitian government has no elaborate policy on agriculture, but if there is, it remains a theory without proper implementation. Disaster and lack of preparedness to contain earthquakes effects and continued deforestation has made the farmers susceptible to damage from such recurrent disasters. In 2005, it is the International Monetary Fund that helped the country to develop a macroeconomic agenda for economic developments (Gold, Ito & Simons 2010, p.801). This agenda helped Haiti grow in 2006 by 1.8 percent; this was the major growth since 1999. Buss & Gardner (2009) claim that Haiti faces from a high level of inflation compared to other low-income nations, shortage of investment culture and trade deficit have led to fewer development projects in the country in the recent years. In fact, less investment has been done under the regime of the current sitting president; this has discouraged the culture of investment a great deal. The government has been depending on formal global economic aid for the financial sustainability. In 2006, the country convened a donor’s conference wherein the aid pledged surpassed the request of Haiti (Buss & Gardner 2009). Economic difficulties have made Haiti to be ranked 145 out of 182 nations in the Human Development Index by United Nations in 2010, with approximately 58.3 percent of the citizens being disadvantaged in no less than three of poverty measures in HDI (Girard 2010). According to The World Factbook, the Haitian government has not done much in terms of labor improvement. Haiti currently faces a scarcity of skilled labor, extensive underemployment and unemployment (Girard 2010). A report conducted on labor market trends claims that in Haiti “over two-thirds of workforce has informal jobs." High unemployment and low income had rendered citizens to poverty and three quarters of Haitians lives below a dollar per day (The World Bank 2013). Financial polices and lack of trustworthy and stable systems of banking has hindered economic development of Haiti. Several banks in this country have collapsed over the years. Another pillar of economic development that has faced difficulty is tourism. Political upheavals and natural disasters have led to decrease of tourist visiting Haiti mainly from 2003 to 2010. However, there is still hope to improve this if the government takes up their roles. This hope is portrayed in economic growth, which is approximated to have increased by 1.6 percent in 2013 from the 2.9 percent in 2012 (The World Bank 2013) Social development Education The government of Haiti borrowed its educational system from of that of French. Girard (2010) affirms that the country has an above average of 67% enrollment level in primary schools. The number is even lower in secondary schools since the enrolment is only 20 percent of eligible children (Angulo 2010, p.5). Today, many charity organizations are supporting Haitian education by building schools to improve the level of education. Food for the Poor and Haitian Health Foundation are some of such organizations that have constructed schools and provided essential supplies (Marquis 2004). The literacy rate of Haiti is rated at 52.9% (Angulo 2010, p.9). However, natural disasters such as earthquake and political violence have hindered the education reforms and made resources to be diverted other projects. The World Bank (2013) posits that the country is ranked as the one of the lowest spenders in education coming at position 178 out of 186. Health and life expectancy A report done by World Bank in 2013 states that the average life expectancy of Haiti from birth stands at 63 years (The World Bank 2013). Underprovided sanitation structures, insufficient health services and poor nutrition have hard-pressed the country to the lower rankings of the health indicators of the World Bank. The government has not put health as a major project, and has continued to allocate insufficient budget to this sector (Girard 2010). Haiti now is placed in the last position in term of healthcare spending in western hemisphere. The economic instabilities have led to high rates of child mentality, reduced life expectancy and many not able to get proper healthcare. Buss & Gardner (2009) Haiti has 26 physicians and 12 nurses attending a population of 100,000 patients. Haiti registered the largest HIV/AIDS in regions outside Africa (Paul 2006). The importance of the state in furthering the development of poor countries There are a lot of lessons governments of poor countries can learn from one which have moved from poor to developing or developed. A lesson can be drawn from Singapore which have moved from poor to developing (second world) countries. The government has contributed through policies and practice to make Singapore what it is today (Tan 2007). Furlund (2008, p.6) claims that 40 years ago, Singapore was ranked as a third world nation having a GDP per capita of below US$310. Rodney (2008) contends that the turnaround in Singapore has been made by Action Party (PAP) of government by taking up the principles of modernization and building foundation for development. Singapore has created and implemented various policies on education, employment, healthcare, human rights, and economic issues. Some of the economic policies involved reduction of corruption, encouraging investment and improving banking sector. Education In poor countries, education should be the top agenda for governments in furthering development in poor countries in the 21st century. Blakemore & Herrendorf (2009) believe that the state has responsibility and even resource to improve education. The importance of state furthering development through education depends on the fact that educations back to them to do so through policies. Similarly, they have the funds to sustain education in the country. In doing so, the government is able to increase its number of skilled people in the labor market. Education is one indicator that used to gauge whether ones’ life if getting better. OECD (2014a) posits that over the years, people have been hired depending on the level of education and prerequisite for the job. Education has a major role in impacting knowledge, competences and skills needed to get jobs both in public and private sectors so as to contribute efficiently to the economy and society at large OECD (2014b). Angulo (2010, p.9) holds that education does not just make citizens of poor countries to get jobs but also to create employment. Also, if the state improves education sector, people get informed on matters of health, political and economic participation. Education is an empowerment which the state can use to reduce crime which is always prone in poor countries. Education provided in poor countries must be good enough to enable its citizens to get jobs in any country (OECD 2014a). In that way, the government can reduce unemployment. Singapore is one of the former poor nations which has invested heavily in education to ensure that it is able to increase skilled labor. In Singapore, primary, secondary and tertiary education are majorly supported and financed by the government (Rodney 2008). In this country, all subjects are taught in the English language to make their education universal. Education would also help the state to foster innovation concept in the country to develop their products. Saving and investment It is important for the state to create saving and investment culture in poor countries. Saving and investment increases capital, hence citizens can improve in terms of personal development (Rakesh 2008, p.62). Later in the long-run, such investment penetrates to national level through taxes. Hence, savings raises the likelihood of future developments. The savings in poor countries like Haiti can be the most significant investment resources for future development in real sector such as manufacturing and agriculture. Rakesh (2008, p.65) argues that it is also vital for the organization to mobilize the savings culture into the country’s economy. If a country has high national savings, it becomes less reliant on the foreign investments and foreign aid. The domestic investments will increase because of accumulated savings of citizens, thus create economic stability of poor nations. In the long-run, saving and investment may further economic development (Park & Park 2010). According to Rakesh (2008, p.67), in the period before the 1960s, India was a lower income country in a poor state and was having an inadequate physical capital stock. Physical capital refers to tools, equipment and factories which are employed in the processes of production (Park & Park 2010). High level of investment rates will lead to accumulation of physical capital in poor countries. Singapore and other countries which were at level with Haiti have since surpassed it in terms of economic growth due to inadequate physical capital. The government of Singapore encourages high rates of savings and investment via its policies like the Central Provident Fund (Rodney 2008). Such funds have been used to finance healthcare and retirement demands of its citizens. Since 1970s, savings rates of Singapore have remained high across the globe. Saving and investment fronted by the government must allow foreign investor to the country to increase the number of investments (Furlund 2008, p.12. In so doing, new ideas, innovation and foreign exchange will improve. This is what Singapore and other developing nations have done to move from third world status. According to Park & Park (2010), the economy of Singapore is today ranked among the freest, innovative, competitive, and business-friendly. When state of poor nations creates a friendly business markets, they are likely to attract foreign business that will pay taxes and help the country provide better service to its citizens. Healthcare Healthcare remains a key pillar to the prosperity of any country. Paul (2006) argues that a country which aims at increasing level of development cannot ignore health sector. The importance of the state improving the health care status of their poor country is that it would increase life expectancy of its citizens. With proper health, workforce is able to increase their organizational performance (Paul 2006). Similarly, the companies and individuals are able to save more which they would have used in healthcare. Vásquez (2008) considers that every sector including finance, agriculture and energy among others depends on health sector for its workforce to perform. Therefore, poor countries should increase the health sector budget to make healthcare institutions Improve treatment and services. Developed countries have improved their development by freeing healthcare provision through Medicare initiatives (Todaro & Smith 2011). Such countries include US, UK and Australia among others. Conclusion The research has realized its objective which was to discuss the importance of the state in furthering the development of poor countries in the twenty first century. Some of the indicators of development that have been discussed comprise of education, savings and investment, healthcare and political development. The report has used Singapore policies to provide lessons for Haiti on how government can apply various initiatives to further development without depending solely on foreign aid. Education forms the key to providing a sustainable labor to a country. Similarly, healthcare has been cited as key to improving performance of various sectors. However, without good governance skills, goodwill and interest of the country at heart, the policies will remain just theory. References Angulo, A. J 2010, Education during the American Occupation of Haiti, 1915–1934, Historical Studies in Education, Vol. 22, No.2, pp.1–17. Blakemore, A & Herrendorf, B 2009, Economic growth: the Importance of Education and Technological Development, Arizona State University. Buss, T.F & Gardner, A 2009, Haiti in the Balance: Why Foreign Aid Has Failed and What We Can Do about It, Brookings Institution Press. Furlund, E.B 2008, Singapore, from third to first world country: The effect of development in Little India and Chinatown, Norwegian University of Technology and Science, pp. 1-108. Girard, P 2010, Haiti: The Tumultuous History, New York, Palgrave. 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Paul, F 2006, AIDS and Accusation: Haiti and the Geography of Blame, California University Press Rakesh, M 2008, A Story of Sustained Savings and Investment, Economic & Political Weekly, Vol. 33, No.19, pp. 61-72. Rodney, K 2008, The Singapore Miracle, Myth and Reality, Insight Press. Sadowski, D 2010, Hope and struggles remain in Haiti six months after earthquake, Orlando, Florida, Florida Catholic. Stockman, F 2004, Before fall of Aristide, Haiti hit by aid cutoff by, Boston.com. Tan, K.P 2007, Renaissance Singapore? Economy, Culture, and Politics, NUS Press. The World Bank 2013, Haiti Overview, The World Bank, viewed on 15th October 2014 from http://www.worldbank.org/en/country/haiti/overview Thirlwall, A.P 2006, Growth and development: With special reference to developing economies, Palgrave Macmillan, New York. Todaro, M & Smith, S.C 2011, Economic Development, 11th Edition, Pearson Education and Addison-Wesley. Vásquez, I 2008, Development, Economic, In Hamowy, Ronald, The Encyclopedia of Libertarianism, Thousand Oaks, CA, SAGE. Read More