NEW: Also see a presentation on Haiti and the 5 Ps of Global Poverty
Why are poor countries poor? It’s not because people in those countries aren’t working hard. The countries of the “bottom billion” (a term coined by economist Paul Collier), are poor because:
- They are subject to one or more of the factors described in The 5 Ps of Global Poverty.
- They find themselves in a dynamic where one of these factors leads to, or compounds another. Symptoms and causes become hard to separate, and interact with each other in toxic ways.
- They become trapped in a vicious cycle where extreme poverty becomes tremendously self-perpetuating. In the words of Collier,” they are poor because they are poor.”
For example, the state has no money because its citizens cannot get above subsistence living to start businesses, earn incomes, save, invest, and pay taxes. Because the state has no money, it cannot provide its citizens with basic health care, education, housing, and security – all of which further limits citizens’ ability to rise above subsistence living to start businesses, earn incomes, save, invest, and pay taxes. The cycle repeats, for generations and generations. Add in poor governance, weak institutions, and conflict… and place these countries in an unfavorable climate and geographical location – the deck is stacked against progress and economic growth.
The very factors that caused these countries to be poor in the first place, and that keep their economies from growing, also impact their ability to make good use of development assistance in any form (aid, loans,investment, microfinance, trade policies, special programs). That’s why they are so hard to help. And why it’s all so complicated.
- It maybe said that the formulas used by wealthy countries to grow their way out of poverty centuries ago,(making use of things such as industrialization, modernization, export-diversification) haven’t worked as well in the countries of the bottom billion today.
- It’s also helpful to remember that the US and other developed countries (often known as the countries of the OECD – the Organization for Economic Cooperation and Development) did, in fact, take centuries to accomplish their current standard of living and place in the world. The countries of the bottom billion simply don’t have centuries to do this – the global economy is moving too fast, and they are being (some experts think, irretrievably) left behind.
- The more they are left behind, the harder they are to help. The harder they are to help, the more they are left behind.
See the 5Ps of Global Poverty Power Point Presentation, and click the links below for more information on each P.