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Wednesday, 1 July 2015

Matt's answer to the big question

My Grandson, Matt Taylor, who is 13, did some work to try to answer a really important question. Here is his answer.

Why are some countries RICH and others POOR?

There are 195-200 countries in the world, 25 count as very rich with an average per capita wealth of $100k a year, these include Australia, Canada, Hong Kong, Iceland, Ireland, Italy, Japan, South Korea, Sweden, Taiwan, UK the USA etc. ect. Though many other nations such as the DR of The Congo, Chad, Central African Republic, Sudan, South Sudan and Afghanistan, the average per capita wealth here is less than $1000 a year, or as little as $3 a day. Why is this? I have tried my best to narrow it down to 3 reasons:

1.             INSTITUTIONS
Institutions are possibly the most important thing a country needs, take a look at the Korean Peninsula, on the Northern half is the one man, clan based, totalitarian dictatorship of North Korea (Or the hilariously ironic official name of The Democratic Peoples Republic of Korea), and on the Southern half is the wealthy, developed, capitalist republic of South Korea (or the non-ironic Republic of Korea). In short, the reason the North is poor and the South is rich is because the South has good institutions and the North has very, VERY bad ones. The North picks its leader from a single family who then serves for life and cannot get the intelligence or skill from the whole population in office, or “clan based thinking”. The South has its leaders democratically elected by the people, and in turn has some of the highest education and living standards in the whole world.

The worse an institution is, the more corrupt it is, so it should be no surprise that wealthy nations such as Sweden, Iceland, New Zealand and Canada are some of the least corrupt, but places like Somalia, Afghanistan, the DR of The Congo and the aforementioned North Korea are amongst the poorest and most corrupt. The vast majority of the wealth from these countries goes into offshore accounts or away from the country and into its greedy elite. Without the required taxes and wealth the nation cannot invest in vitals such as police, healthcare, transport and education.

2.             CULTURE
Another way a country can be affected is by a person’s outlooks and beliefs, their culture. A surprising statistic pops in regards to religion, in short, the less religion the more wealth. An overwhelming 70% of people in 19 of the world’s richest nations say that religion is not at all or hardly important to them. The noticeable exception to this is the USA, which manages to combine strong religion with vast wealth, a reason for this is because of their perspective of the gods and the unknown, the American God doesn’t want you to build God’s New Kingdom in the next life, he wants in it Washington or Los Angeles, right here on earth.
This isn’t the case in many poor countries as their outlooks make them think that there’s nothing they can do in this world and should focus on the spiritual side of things and look forward to next life, it makes sense when you live in endless poverty, in the world’s poorest countries, (The Democratic Republic of the Congo, Somalia and Niger), simply EVERYONE is a fundamental believer, this is no coincidence.

3.             GEOGRAPHY.
The poorest countries in the world are overwhelmingly located in tropical and hot areas, the issue begins with agriculture, tropical plants mostly lack minerals and carbohydrates and have less fertile soil too. In history the more Large Domesticated Animals (Such as horses, cows, and oxen,) the better it did, these animals could pull ploughs and liberating most the workforce from doing it all by hand, but unfortunately, many insects containing some of the worst diseases known to man are exclusive to tropical Africa, these creatures can kill of livestock by the thousands crippling agriculture and dooming the society. And sadly, it’s not just the animals that suffer, humans are devastated by an assortment of deadly diseases such as Ebola, Cholera, Malaria, Rotavirus and many, MANY more, 100% of low income countries are affected by at least 5 tropical diseases. Another geographic issue is related to transport, as many poor nations are very badly connected, landlocked Bolivia and semi landlocked Paraguay and the poorest countries in South America, and it should be no surprise that Afghanistan, the poorest country in Asia is also landlocked. Africa’s only navigable river hosts 13 landlocked nations, all which that have an average Per Capita wealth of $600 a year or less. Back to institutions, a lot of poor countries have tons and tons of oil and other natural resources, but because of their corrupt institutions, they can get even worse. For example, the world’s poorest country, the Democratic Republic of the Congo has an abundance of natural resources. If to amass wealth you needed High Tech Fusion Engines, then you’ll need the help of the whole society. But if you just need to extract a few minerals, all you need are some mercenaries and an airfield long enough to send out those resources to the black market. The wealth and worth from these resources helps DRC armed rebels to stay strong, and corrupts every level of their society.

So what makes a country rich or poor? Well I’d say the it would be 50% institutions, 20% culture, and 10% each to Latitude, Connectivity and Geological Good-fortune. If you’re a policy maker, you should take this discussion into account and watch it closely, but on a more personal level you should take away two things, 1 being Modesty, you should know who you owe your individual success to, the founders of your society who built it over hundreds of years, and how many draw benefit from that unknowingly. The second thing being Sympathy, you should know a lot of the reasons these countries fail is because of lack of shorelines or navigable rivers or diseases like malaria, we should help these people instead of taking our society for granted.