The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It – Paul Collier

The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It
On July 9th 2011, the people of South Sudan took to the streets jubilant, celebrating their country’s independence. Alas! The euphoria was short-lived as the newly independent, strictly landlocked country fell into the cyclic trap of civil war; ethnic annihilation and mass starvation taking the centerstage. The recent signed peace deal between President Salva Kiir and the rebel leader Riek Machar, dashed all hope of tranquility as the ceasefire deal was broken through a couple of violent attacks in the oil rich state of the Upper Nile. Although, when Collier penned this book, South Sudan was still on its independence path , yet as of today, South Sudan stands not only among the several bottom billion countries , but it is at the bottom of the very list. Nigeria, which is one of the most focused countries in Mr. Collier’s research studies, is being marred by the terror of Boko Haram. The horrendous kidnapping of several hundred school girls and the frequent bombing attacks have once again spiraled the country and its governance into socio-political chaos. Its neighbour Cameroon has also recently had its share of terror-related violence involving the mushrooming of Boko Haram pockets and the attack on the emigrated Chinese workers. Speaking of Chinese workers, China over the years has found Africa as its economic gold mine. The abundance of natural resources and the dearth of stable and good governance seemed to have immensely worked in the favour the autocratic China. The BBC sponsored news segment of Chinese ‘chicken farmers’ taking Zambia by storm confirms the fears that Collier has expressed on the Chinese business mantra of “we won’t ask question” taking a less ethical position in the race of fiscal prosperity. It is a known truth that Kenya is not only being crippled by the terrorist act of Al Shabaab( the Somali militia) , but also by the vast corruption that encompassed the governing bodies. In most of the cases, it is the latter that is more dangerous than the former. The Portuguese- speaking country in West Africa -Guinea Bissau, is on the verge of becoming the kingpin in cocaine trafficking and illicit arms trade, soon becoming a heaven for extremists groups and criminals . The list goes on and then one is compelled to ask, “Why is it that Africa is seen as a core problem by the elites of the world, even when there are numerous other countries in the ‘bottom-billion’ list? Maybe, because firstly even though countries like Afghanistan find itself in the bottom billion, it is in a much more stable neighbourhood when and only compared to that of the African continent. And, secondly since a large number African countries find themselves in the bottom billion, the surrounding neighbourhood is as hostile as the others in the continent, largely creating adverse circumstances. Given Collier’s expertise on the African region, the comprehensive prose thus encompasses the thriving problem of poor countries not being able to break in to the global market and why so. Why have the bottom billion countries not grown? Will it ever be able to penetrate into the global markets, currently ruled by two Asian giants – China and India? Is the African youth the only economical vaccine to inoculate the curse of Dutch disease?

“But at the bottom billion the villains have the guns and the money and they usually prevail. With hard work, thrift and intelligence a society can climb out of poverty unless it gets trapped. The four big traps are:- 1) Conflict , 2) Natural Resources, 3) Being Landlocked and 4) Bad Governance.”

By definition, the bottom billion constitutes to the “1 billion” populace that thrive in the 58-60 impoverished economies. Adhering heavily on the statistical data, Collier infers that “as of 2006, around 980 million living in “trapped” countries”. 73% of the populace is in Africa. Collier argues the validity of consistent cycle of “traps” factors resulting in the extreme poverty and zilch development prospects in the bottom billion. Civil war tops the entrapment factors, with Collier deducing the highest probability of a relapse of civil war in post-conflict societies. As per as the international law, civil war is seen as a domestic and self-determination matter. Only when and if the ‘rebel’ are accepted as belligerent by the other states thus becoming the subjects of international law, then can the law intervene on the conditions of insurgency and belligerency , but the process is subjective. Thus, Collier’s argument of civil war being an international problem since it hampers the economical conditions seems legitimate yet; the workings of it may be crippled. The suggestion of war and coups could be avoided by democratic political design brings forth a shining possibility. Commodities like oil, diamonds, et. al. Increase the possibility of civil wars. This brings us to the above mentioned “trap” of natural resources. Collier structured his argument on the fact that natural resources have no legitimate ownership whatsoever; it is owned by the one who seizes it. Supporting his research on the 1980s Nigerian oil boom, Collier debates that unlike Saudi Arabia where the entire societies safely lives as “rentiers”, the African countries may suffer from the resource curse of the infamous ‘Dutch disease’. Collier is commendable in his truthful inference of in the “survival of fattest”, natural resources contribute to lengthy conflicts. The trade of natural resources can also be a rather tedious and risky task for landlocked countries where the intricacies of trade depends on the transport costs. Comparing the fiscal environment of Switzerland to that with Uganda, Collier makes it crystal clear how two landlocked countries exhibit vast disparities in their economical atmosphere, concluding the argument on the comparison of the political neighbourhood and their dissimilar treatment bestowed on the respective countries.

Collier with his other colleagues engages in research studies arguing on how poverty is not a trap because one can come out of impoverished circumstances. This however, does not seem plausible in societies overwhelmed by corruption and criminal political misgivings. Again on other stance, where I differ is Collier’s deriving the no relationship equation between the political repression and the risk of civil war. Maybe, Collier identified more with the low-income conditions and illiteracy that empowers the bottom billion societies. Even then the theoretical outcomes appear a bit absurd in the same nerve of another Collier &co. finding on negative relationship between low income and the risk of civil war. The labelling of bad governance of being a trap then become heavily debatable as political repression, poverty , low income and conflicts are all known salient features of bad governance. Collier’s utmost reliance on statistical data and outcomes, make the resulting analysis more mathematical and at times detached from logical reality.

“Why countries of the bottom billion have missed the “globalisation boat”?…When will the boat come around again? If it does, when will the bottom billion actually be able to break into the global markets?

In the process of inducing developmental economic factors in to the bottom billion, Collier fears the blurry prospects of the bottom billion societies making their mark in global markets. Collier’s stamped valid societal entrapment in the form of bad governance and natural resources come in play. Arguing on the exemplar of Zimbabwe’s R. Mugabe’s political strategy of seeking the help of the Chinese government in order to bail Mugabe out from the economical mess; Collier affirms the factual possibility of China becoming the prime investors in Africa. Familiar with the autocratic workings of the Chinese, Collier expresses his trepidation of the bottom billion further spiralling down into a financial downfall. Understandably, Collier emphasizes on the need for more inflow of private capital which would enhance the internal socio-political conditions. Yet, at the same time there are worries about exodus of skilled and educated population into favourable economical societies , the proliferation of corruption due to the influx of private capital , the high likelihood of capital flight and slush funds stashed in foreign banks and the growing adverse effects of Dutch disease. A fairly suitable theoretical answer lies in the hope of private investment, making a minimal risk trade market suitable for “convergence” from firms relocating into the developing societies to minimize labour wages and resulting wage-gap. As of 2010, China’s investment in Africa has reached $ 40 billion ; thus ringing true Collier’s trepidation on whether the bottom billion will ever be able to hop on the missed globalization “boat” because the process of socio-political growth is a slow process with the probability of nearly 50% post-conflict societies falling back in to the cyclic trap of civil war.

“Brave people in these societies struggle for change but the odds are against them. Of the four instruments – aid, security, laws and charters and trade — we are using the first quite badly and the others scarcely at all.”

A staunch supporter of aid, Collier urges the international aid agencies and NGOs for a finding a better and liberated corridor for aid sustainability. The meticulously detailed chapter on aid brings forth a likelihood of safer developmental economical milieu. Collier and his academic team promisingly put forth instruments that would help in unlocking the political conflict traps. Aid becomes the prime rescuer, with Collier suggesting it as a legitimate reinforcement. Although aid speeds up the growth process, Collier claims that aid is still unlikely to be the intact solution to the bottom billion problems for the very reason that it is highly politicized. Collier appeals to the Western world to uplift the significance the issue of aid from being an opportunity of publicity driven photo-ups and a match of sovereign egos. Aid minimizes the risk of capital flight as it helps to sustain private capital within the country. Nevertheless, even with aid being the part of the solution, aid becomes a part of problem, too. Collier’s in-depth analysis on this subject deduces the forthcoming problematic issues of aid inducing slow growth due to failing export activities, the possibility of the aid being used for military enhancement, the proliferation of corruption,flight of monetary and human capital, patronage electoral, ethnic diversities and rebellion and the odds of “diminishing returns”, throwing the societies back in perilous governance. The evidentiary study of aid being used more as military spending than to augment educational suggest the vulnerability of a post-conflict society. Collier’s undertaken research supports the claim of “about 40% of Africa’s military spending is inadvertly financed by aid.” Once again, Collier throws his analysis on wobbly foundation when he claims how the police force would be a better security than the military in preventing further conflicts. It appears to be quite illogical as, even a police force can repress the populace by violence.

To bring the much needed economical development it is necessary to help and encourage “heroes”. It is here, that I undoubtedly and completely agree with Mr. Collier. Reformers have always been the guiding light in the world of development. But, in societies that are plagued with mammoth corruption, political infused ethnic rebellion, drug trafficking and the ever festering poverty, do reformers have a stand? Collier accentuates the importance of laws and charters which are in a terrible need of amendments, thereby helping to implement a better and transparent socio-political and economical developments. A promulgation of an international charter appears to be favoured by Collier as such a charter and laws would likely empower the reformers keeping the political criminals at bay. Colliers presses the need for a stricter and more libertarian charters and trade policies and a need for international institutions like IMF, World Bank, GATT, OECD, NGOs and political forums to establish stricter and firmer methodologies of trade policy that would be fundamental in the developmental process of the bottom-billion. With the bottom billion having infinitesimal and capital-scarce stagnated markets, the need to modify trade policies become essential in order to create liberalization of trade economy and eradicate restrictive trade barriers. Although slightly flawed in its undertakings, Collier passionately urges the Western world to seriously consider the developmental issue of the bottom billion, not as a monetary burden but as an essential task that will help to minimize the claustrophobic economical polarization of the international community.

“Change is going to have to come from within the societies of the bottom billion…”

On development Colliers surmises, “development is about giving hope to ordinary people that their children will live in a society that has caught up with the rest of the world. Take that hope away and the smart people will use their energies not to develop their society, but to escape from it.” Repeatedly, at intervals Collier emphasizes on two prospect of transformation; firstly on how it is essential for change to come within the core of socio-political governing of the bottom billion countries and secondly, how things are needed to speed up. The former conjecture is plausible on every account because only if and when the internal political environment is stable can the country prosper externally. With numerous limitations within the international law statutes and the non-existent concept of a “world government”, for the external investments to easily seep into the countries financial domain the internal environment should be at minimal risk, if not risk-free. Conversely, the latter reasoning was quite worrisome as there are possibilities of speed and political chaos being directly proportional to each other. So, from the process of research quest, in a world where emigration is now looked as a menace to the extent of deportation and imposing stringent laws, a question is derived of whether there are any favourable prospects in minimizing the economical disparity between the two extremely polarized world societies. And, what if the needed “change” is plundered into a political debacle; will the probability of exodus rendered in deepening poverty in the countries of vast natural resources? Could there be a possibility that the bottom billion, a treasure of natural resources, become home to new fluid peripheral ownerships, solidifying the countries that are racing to reach the zenith of the economic prosperity? When will the success of aid be measured by its developmental scale and not by its size? Will democracy in the bottom billion be stuck within the enclosed walls of a voting ballot? Is there a possibility of change?

My previous encounters with Collier had left me jotting down plethora of questions that remained unanswered; asking for a more depth in the written prose. This book is not far from that experience either. Nonetheless, with Collier’s strong academic expertise and experience in the African region, this book gains the clarity of being a concrete groundwork for developmental economics. To say, that Collier’s work in this book is the ‘destination’ would render a certain vulnerability to the economic theories and experiments proposed in this book because it was written in the pre-2008 days. Collier himself has asserted that a number of his theories were yet to achieve the said credibility and thus were unpublished; many of which I presume must have been changed due to World Economic Crisis, post-2008. Having said that; it would be preposterous to easily dismiss this book as certain economic theories proposed are admirable and excellent in their implications and even in their implementations, when required. Thus, it would be appropriate to deduce that Collier’s book is more of a road map that leads to the future agendas of tackling poverty and economical inequality.



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