The Bottom Billion

“I have a little boy who is six. I do not want him to grow up in a world with a vast running sore- a billion people stuck in desperate conditions alongside unprecedented prosperity. ” (176. Paul Collier). It is a global nightmare and “a ghetto of misery and discontent” (collier) that would affect, not only Africa, but the world in general, “unless” the G8 (a group of 8 industrialized countries) and mass of informed ordinary citizens act seriously and responsibly to help these countries overcome the poverty trap they have been stuck in for decades; enable them to converge with the rest of the world and live up to the 21st century standards.

Paul Collier is a professor of Economics and Director of the Center for the Study of African Economies at Oxford University, and former director of Development Research at the World Bank. In 2010, he was named by Foreign Policy Magazine to its list of top global thinkers. Collier holds a distinction award from Oxford University. Among his books The Plundered Planet published in May 2010, Wars, Guns, and Votes published in March 2009, and the Bottom Billion published in 2007.

In the “Bottom Billion: why the poorest countries are failing and what can be done about it” Collier seeks to find out factors that are causing one billion of people to live in extreme poverty and have unproductive life. In the meanwhile he wants to shift the thinking of the industrialized countries from “alleviating [their] poverty” to “economic convergence”.

Collier approaches his arguments through an empirical studies where he analyses statistically the correlation between factors he considers to be responsible to cause the sad reality which one billion of people live in – the “fourteenth century [characteristics of]: civil war, plague, ignorance. ” He uses data from University of Michigan, his own resources and experiences as an Africa expert, and his colleagues’ resources. Collier gradually argues that there are four traps which are responsible to trap bottom billion countries and place them at the bottom of the global economic system.

However Collier does also include solutions that are needed to be taken seriously and responsibly by both the G8 and the bottom billion government officials for any change to happen and to save the world from “sleepwalking into unnecessary catastrophe” in the future. What is the “bottom billion”? According to Collier, they are fifty-eight small countries Characterized by civil war, plague, and ignorance. Their population combined is fewer than China or India. Per capita income is very low, so the income of the typical country is negligible, less than that of most of the rich world cities.

They are countries that do not form a geographic label, so Collier label them as “Africa+” as 70% of the people of the bottom billion are in Africa. The + sign refers to places such as Haiti, Bolivia, the Central Asian countries, Laos, Cambodia, Yemen, Burma, and North Korea. The average life expectancy is 50 yrs, the infant mortality is 14%, and proportion of children with symptoms of long-term mal nutrition is 36%. The misfortune one billion still is living in extreme poverty in a country affected by recurrent conflicts, resource curse, geographic isolation or bad governance. ) The conflict trap: according to Collier, 73% of people in the societies of the bottom billion have recently been in civil war or still in one. 50% of conflicts in the bottom billion are post conflict relapses. The low income, slow growth, and dependency upon primary commodity exports (oil, diamonds, or gold) are leading causes that increases the risk of civil war. Civil war destroys the economic of the society during war and post conflict war as collier calculates the average cost to be $ 64 billion. Examples of countries fail into conflicts are Cote d’Hivoir, Democratic Republic of the Congo- formerly Zaire, and Sierra Leone.

The typical civil war last for a long time “something around a decade, more than 10 times as long as typical international war. ” (Collier). It is very hard to stop it, when it does, possibility for another civil war, repeated civil war. Collier argues that political injustice is not what makes the society prone to a civil war, as Zimbabwe faces the injustice of political rights but there is no war, no rebellion civil war. Instead, Collier statistical analyses show that poverty, stagnation, and availability of valuable natural resources are the causes that seem to produce civil war rather than political injustice. ) Natural Resource Curse: Natural resource rich countries in Africa have ended up poor as a result of resource wealth that only the few (government officials and foreign extract agencies) to benefit from but not the majority (the citizen). The elites in these countries detach themselves from the interest and concerns of the majority of their population; they control and steal the revenues of primary commodities exports. All these revenues go to private pockets or foreign banks. According to Collier, it is estimated to be 38% of Africa’s wealth has fled the continent.

Economists explain resource curse as a “Dutch disease”, because “the resource exports cause the country’s currency to rise in value against other currencies. This make the country’s other export activities uncompetitive. ” Nigeria for example in 1970s, its oil revenues built up. Yet, the country’s other exports such as peanuts and cocoa became unprofitable. As Nigeria’s currency rise in value, the peanut and cocoa prices become higher for importers who might find another peanut and cocoa supplier cheaper from that of Nigeria. Therefore, Nigeria’s peanuts and Cocoa became unprofitable, and production rapidly collapsed.

Failure to diversify the export products, the resource rich countries can’t break free from the dependency of exporting the primary commodities as they are source of big revenues. The government accountability is not transparent for its citizens as the latter are not taxed by their governments. Consequently, the citizenry are less likely to demand financial accountability. However, the natural resource is good source of wealth for the whole society when their governments have managed to use the resource wealth very well such as Canada, Norway, and Australia. ) Landlocked countries with bad neighbors: Countries that lack coastline are forced to sell to their neighboring countries’ markets. Example of Uganda and Switzerland, both are landlocked but the first one is poor and the second one is rich (respectively). Collier explains that neighbor matters for development, he continues explaining the fact that Switzerland is a rich country, despite the fact is a landlocked, because it depends on its neighbors the Germany and Italian infrastructure. Whereas Uganda’s poor neighbors with their weak infrastructure make it hard for Uganda to access to the sea and integrate into global markets.

Kenyan’s infrastructure is so important to Uganda’s access to the sea. Moreover, sometimes the neighbors not only are the transport corridor, they are also the markets themselves, like Germany, Italy, and France were the Switzerland market. While Uganda neighbors are Kenya, Somalia, the Democratic Republic of the Congo, Rwanda, and Tanzania. All of Uganda’s neighboring countries are poor, and have been through genocide like Rwanda, stagnation of nearly three decade like in Kenya, Somalia that is completely ollapsed, and Democratic Republic of the Congo that has catastrophic for it to change its name from Zaire. Therefore, Switzerland has been for a period of three decades in the better neighborhood. While Uganda’s neighbors are economically poor countries with weak infrastructure, which is absolutely don’t form good neighbor for Uganda. “Landlocked countries with poor infrastructure connections to their neighbors have limited market for their goods. ” (Collier) 4- Bad Governance in a small country: bad policies adopted by bad government can destroy the economy of a country.

The type of democracy practiced in these countries is dysfunctional democracy lack the check and balance system. Thus, the government officials seize each opportunity they have to build up a fortune from the natural resource revenues that are supposed to benefit the majority of the society not only the few in the government. The instability and lack of accountability especially in these small countries of the bottom billion discourage potential investors, who usually feel better when opt for better known countries such as china and India than unfamiliar countries with instability and risks.

Chad is a landlocked country with aid and oil. Chad’s only option is their government to provide public services from the aid and oil revenues. However, 2004 survey tracked money released by the ministry of Finance “intended” for rural health clinics. Survey showed that “only1% of it reached the clinics and 99% failed to reach its destination. ” In part 3 Chapter 6, Collier argues that globalization works for India and China but not the bottom billion that may have “missed the boat”.

Globalization seem to work against the bottom billion, because of “economies of agglomeration” as Asia used labor-intensive manufacturing strategy to break into the global markets and makes competitive for “later comers” to compete with their products that seem to control the international markets. Bottom billion, in turn, become supplier of primary commodities, which just reinforce the natural resource trap. In the final section, Collier suggests in helping the poorest, there is a need to “narrow the target and broaden the instruments”.

To focus only on the one billion that live below poverty line and experience no type of growth compared to the rest of the world; and to shift thinking from aid to an array of policy instruments such as aid delivery, military intervention, charter and laws, and trade policy, which are the instruments he proposes to help the bottom billion escape from the traps mentioned above. 1- Aid Policy: Aid causes intense political disagreements between the left and right. Left sees it as a part of solution they regard it to be as a reparations for colonialism, while the right sees it a part of problem when the feckless get rewarded.

Collier believes that aid does “tend to speed up the growth process”. He reminds readers to the fact that United States was also that poor, and took it to get to where it is today about two hundred years. He believes in “aid for development” neither in “aid for reparations” nor “aid for the feckless”. However Collier insists to change the way the aid is provided, keeping in mind that statistical evidence generally suggests that aid is “subject to what is called “diminishing returns. ” When aid reaches about 16 percent of GDP it is not anymore effective.

In addition aid can be an inducement to rebellion and to coups, it is sometimes called “rents to sovereignty”. So to make it more effective, there is a need to form agencies just to supervise the aid money and to make sure it reaches its potentials for which is given. Aid money needs to be watched more closely so does not leak to military spending or be taken by coups. 2- Military intervention: it is the most controversial one in the list of instruments; however, the bottom billion countries “cannot provide their own security to an adequate fashion. That is the same strategy used 40 years ago, when North America provided supplies security to Europe after World War II.

Collier mentions the tragedy of Rowanda when 800,000 died unnecessary due to rejection of military intervention. Yet the British military intervention in Sierra Leone end brutal long lasting civil war. Both the Sierra Leone government officials and its citizens welcome the military action that helped them to be in peace from the rebellion that recruit addicted teenagers and train them to hack the hands and the feet of villagers including women and children. -Laws and Charters: giving the fact these countries are very corrupt and far from the transparent to adopt laws that will benefit their citizens, Collier suggests in this case a voluntary of international standards that would put pressure within these societies to adopt them. Example of such law “the extract industry transparency” requires governments in the bottom billion to report to its own citizens what revenues are getting from natural resource extraction. Nigeria eformers adopted it and a lot other governments have adopted it because of the pressure from below. It is that pressure on governments from within their own society that would lead some other governments to adopt them. 4- Trade Policies: also it is debated about especially the bottom billion countries are poor with zero tolerance; however, Collier believes that opening the west markets to bottom billion countries in much generous way, would absolute help their economy to succeed and to diversify to light manufactures and into a wide range of agricultural goods.

As matter of fact, would enable them to break free from their dependency on exporting that narrow range of primary commodities. “The west countries have done it in the past- when rich countries opened its markets to each other, or when North America opens its markets to Europe so the latter could recover. The whole modern wealth of Europe, America, and Japan grew through that process of opening and sharing markets”. Trading policy that Collier proposes in the bottom billion would help the rich countries to be safer and more prosperous.

Collier, I think he achieves his goals of building a mass of informed citizens as he thinks that it is a step forward for changes to happen and for better future for the bottom billion countries. About 50,000 copies of the bottom billion book were sold in just few months by different age groups. Also, the new paperback edition was being translated into Chinese, Japanese, German, Spanish, French, Italian, Korean, and Norwegian.

Politicians may find it hard to get away with the classic political gestures of “flying in, kissing couple of babies, announcing some sort of Aid program, and then forgetting about it. ” Now the well informed citizens are just a pressure on politicians’ decisions toward this part of the world. Collier also generates an astonishing political interest that the bottom billion countries now are benefiting from and their economic growth is being recognized by leaders such as Ban-Ki Moon, the Secretary General of the Unite Nations announced “let 2008 be the Year of the Bottom Billion. Robert Zoellick, the president of the World Bank, announced in his first Annual Meeting address that “a stronger focus on the bottom billion would now be a priority”, Douglas Alexander, British Secretary of State for Development “announced the creation of a massive international Growth Center for the poorest countries…etc. Bottom Billion is a must read book for whoever is interested