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Book Title: The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It
Authored by Paul Collier
Publishers: Oxford University Press (United Kingdom)
Year of Publication: 2007
Paul collier is an economist and former director of development research at the World Bank, who is analyzing the poverty level which is escalating in underdeveloped countries especially in the African Region where more than 50% of poor people are living. Collier in his contribution The bottom billion has discussed; the underdeveloped countries are facing different kinds of problems that are hindering economic development. Collier argues that most of the development initiatives in today’s world are focusing on developing countries, but there is a need to focus all the efforts to bring the positive change in the lives of the bottom billion, e.g. the average life expectancy in the bottom billion is 50 years which is very less as compared to the average of 67 years in developed countries.
According to the collier; the issues faced by most of the developed nations are due to different factors which include; Conflict trap, bad governance trap, natural resource trap, and land-lock trap. These four development traps clearly explain the plight of the bottom billion. The conflict trap which arises due to the political instability or the political conflict may result in the civil war which results in economic stagnation. There can be different reasons for the violent conflict like, the abundance of natural resources, the large portion of the young population is unemployed or uneducated, and the presence of different ethnic groups. The insecurity and structural violence lead to the second trap which is the natural resource trap. About 29% of the people in the bottom billion are living in underdeveloped countries which are dependent on natural resources.
Those Governments who mainly depend on these natural resources have dysfunctional democracy and they try to create hindrances for the institutions that facilitate the economic growth. Instead of using these resources for the benefit of their people, only elite and status-quo receive profit. This exploitation is based on the politics of patronage, which results in little political accountability and transparency. The third trap which the bottom billion faces are being “landlocked with bad neighbors”. The issue behind this trap is that; the land-lock countries depend on their neighbors to access the global market through the coast for exporting their goods and, if the neighboring country lacks the proper infrastructure then it becomes difficult for the landlocked countries to gain access to the global market.
Lastly, bad governance is the reason why the bottom billion’ are trapped in the vicious circle of poverty. Bad governance destroys economic progress and innovation. Poor governance and the incapability of the political leaders to make the right decisions at the right time result in low economic opportunities. Countries that fell into these traps are mostly characterized by corruption and severe government dysfunction.
To tackle these four traps, Collier suggests four instruments to tackle these problems faced by the bottom billion which can make a difference. The first one is the monetary aid; the author is of the view that at least for the first post-conflict decade, aids need to be sustained even there is no growth, then at least minimal standards of living can be achieved. The second intervention is; the Military Intervention that can help the bottom billion. Military intervention can be used for the restoration of peace and order or to prevent the military coup. Collier argues that military interventions can bring peace and stability. The third instrument focuses on the changes in international law and it is based on the formation of five different charters. Those are the Post-conflict charter, Democracy charter, Natural resource charter, Investment charter, and Budget transparency charter. These international charters and the changes in the international law can provide incentives for the bottom billion which can help them to adopt sustainable change. The fourth instrument involves the trade preferences for the bottom billion. Due to the low wages in Asia, the manufacturing industries started moving to Asia, and Africa was left behind. So, in that context author suggests that the bottom Billion in Africa and Asia should also be protected so that they can compete and integrate into the global market.
One of the weaknesses of Collier’s analysis of aid intervention is; ‘global public goods” but he has not explained the ‘global public bads’, which can result through these interventions. If we take the example of Pakistan who’s economy suffered billions of dollars due to the military intervention in Afghanistan for the US. Investors and businessmen flew back due to the unrest and deteriorating situation in the country. The IMF and the US provided billions of dollars in aid to support the economy of Pakistan but instead of reforming the economy, aid received by Pakistan went to the pockets of the status quo and powerful politicians who laundered out this money from the country. The trickledown effect of the aid intervention to the poor people was almost zero. So despite getting billions of dollars in form of aid in the last decade, a time came in 2018 when Pakistan had only one month of foreign reserves left and furthermore unemployment and poverty level in Pakistan reached an all-time high.
Collier also talked about the military intervention that can help in maintaining peace and prevent conflicts which in a sense is true, but we cannot generalize this intervention, because the military intervention can have unintended effects e.g. the US invaded Afghanistan to eliminate terrorism and to bring freedom and peace to the general public which was living under an extremist regime, but the US intervention resulted in the blowback for the neighboring country Pakistan. The war in Afghanistan created unrest in the tribal areas of Pakistan which are at the borders with Afghanistan, and from there it spread across the whole country and Pakistan suffered huge losses in terms of economy and civilians’ causalities.
Still, there is a need to explain further how conflicts can be minimized and economic development can be generated through interventions without having the potential for negative consequences. The result of these interventions can be positive but most of the time they are likely to fail than succeed.