Why Poor Countries Are Poor
POOR COUNTRIES ARE POOR BECAUSE THEY ARE POOR
Poor countries are poor not because they are poor but because they lack the essential resources which are significant for economic growth and development. The African continent is considered as the poorest continent in the world. This is due to political instability which tends to scare away investors thus stunting economic growth of a country. Some of the reasons as to which developing countries are poor are; corrupt governments, low illiteracy levels, dictatorship and many others.
Poor countries are characterized by underdevelopment which includes; lack of access to job opportunities, healthcare, drinkable water, food education and housing. They have unequal trade balance which results from their dependence upon primary products. These commodities are;
• In limited demand in the industrialized countries – for example; tea, coffee, sugar, cocoa, bananas
• Vulnerable to replacement by synthetic substitutes like jute and cotton
• Are experiencing shrinking demand with the evolution of new technologies that require smaller quantities of raw materials.
Governments of these developing countries have put in high barriers of trade. High tariffs prohibit countries from producing goods that they are most efficient in producing, and force them to provide such a wide variety of goods that they become very efficient. This keeps nations poor because they cut themselves off from technology and maintain low standard of living due to the lack of competition to produce high quality goods. High tariffs and quotas keep foreign imports expensive and protect domestic markets. While in theory they protect a country’s workforce, barriers of trade actually make countries worse off economically by preventing them from being active in international trade. If these nations would lower trade barriers, it would allow them to import goods they do not efficiently produce and as a consequence, jobs and capital would be allocated to more
Poor countries are poor not because they are poor but because they lack the essential resources which are significant for economic growth and development. The African continent is considered as the poorest continent in the world. This is due to political instability which tends to scare away investors thus stunting economic growth of a country. Some of the reasons as to which developing countries are poor are; corrupt governments, low illiteracy levels, dictatorship and many others.
Poor countries are characterized by underdevelopment which includes; lack of access to job opportunities, healthcare, drinkable water, food education and housing. They have unequal trade balance which results from their dependence upon primary products. These commodities are;
• In limited demand in the industrialized countries – for example; tea, coffee, sugar, cocoa, bananas
• Vulnerable to replacement by synthetic substitutes like jute and cotton
• Are experiencing shrinking demand with the evolution of new technologies that require smaller quantities of raw materials.
Governments of these developing countries have put in high barriers of trade. High tariffs prohibit countries from producing goods that they are most efficient in producing, and force them to provide such a wide variety of goods that they become very efficient. This keeps nations poor because they cut themselves off from technology and maintain low standard of living due to the lack of competition to produce high quality goods. High tariffs and quotas keep foreign imports expensive and protect domestic markets. While in theory they protect a country’s workforce, barriers of trade actually make countries worse off economically by preventing them from being active in international trade. If these nations would lower trade barriers, it would allow them to import goods they do not efficiently produce and as a consequence, jobs and capital would be allocated to more