Helping Developing Nations

by Krishna on January 20, 2007

The developments in many Third World countries over the past few decades show that poor nations cannot go it alone in their development efforts. Richer nations are expected to help them. Many countries need a basic level of growth (at or above 6%) before they can see their poverty decline. These countries do not have the requisite amount of internal capital to achieve such a goal. With the advent of skewed globalization where poorer countries have little bargaining power in terms of lowering tariffs and eliminating trade barriers, they find themselves at the short end of the stick.

The basic problem in the Third World is the level of capital and production needed for sustenance. For example, in the book, “The End Of Poverty“, Jeffrey Sachs gives us the example of a family that is making $100 a month using their farm goods – just enough to meet their needs. Then he shows how external conditions can either help them develop (such as better infrastructure to sell their produce or reach new markets) or lead them to penury (lack of rain, family member falling ill).

The Third World countries are in such a situation. Many of them are ravaged by factors such as diseases like AIDS, drought, unfavorable climate, etc. Their corruption and tyrannical governments are partly a result rather than the cause of such problems. To stabilize their economies, large amounts of capital is required – so that disease (fatal or dehabilitating) can be eliminated or reduced and basic infrastructure can be created. The Gates Foundation and other NGOs have recognized this and have made the elimination of killer diseases one of the major priorities. Secondly, these countries don’t have the educational strength (and by extension, the legal and political framework) to take advantage of the global economy.

The reason why it is important for richer countries to help the poorer ones is very simple. We share the same planet and the same resources. For example, India and China have large populations because of poverty that results in lack of access to contraception and other medical facilities. Such large populations consume enormous resources including fuel (read “global warming“), water & food, and create massive social and political upheaval.

Poorer countries are also breeding grounds for mercenary interests, including, but not limited to terrorists, drug traders, gun runners, etc. People who make money through such activities have the power to directly or indirectly influence, control and manipulate Western governments. For example, the fact of terrorism in Afghanistan resulted in changing US defense policy and the Iraq war.

Real globalization can help. Right now, many poor countries depending on agricultural exports are thwarted by farm subsidies in Western nations. Outsourcing opponents also fail to understand how much poverty is being reduced by MNC operations in those countries while bring consumers cost benefits.

A final note: Help by richer nations doesn’t just mean “money”. Throwing a lot of cash at the problem without exploring the political, legal, social and geographical factors that create poverty may only translate into transient results.

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