Poverty Traps in The Bottom Billion

As I sit in my air-conditioned home, with a large television and brand new iPhone, there are millions of people that live in extreme poverty. Not only do they not have the most up-to-date technology, but they also do not have even the most basic belongings. They live without clean water, sanitation, or adequate food. These people have very low life expectancies, high infant mortality rates, and high malnutrition rates. Why is this? Why are some people and some countries so fortunate while others are so poor? Paul Collier explains some reasons that certain people and regions are so poor in The Bottom Billion.

Collier explains that there are about 60 countries in the world that have progressed very little, if at all, in the last 30 years.

Some countries have even digressed in their progression. These different impoverished countries house almost 1 billion people. Most of these “bottom billion” people are in Africa. The rest of the world is considered “developed” and has been seeing large rates of growth in the last 30 years.

Impoverished countries often find themselves in “traps.” They have an extremely hard time progressing and creating an economy that can bring the citizens out of poverty. Collier discusses four main traps that countries can find themselves in; (1) conflict, (2) natural resources, (3) landlocked with bad neighbors, and (4) bad governance. Countries like China and India have broken free of these traps and have started developing more rapidly. Most countries have not been able to escape these traps, and they remain in poverty. One thing that is important to know as we discuss these traps is that it is possible to escape them.

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The first trap is the conflict trap. Countries that are engaged in civil war have an extremely difficult time having a successful economy. Civil war creates a large economic cost and burden. It reduces income, making everyone in the country poorer. When people are poor, there is more of a rof of civil war. This vicious cycle seems to never end for some countries. Why do people rebel? As a teenager, I rebelled when I wanted something that I did not already have. This is what the rebels in poor countries are rebelling for. In countries that are poverty-stricken kin, they rebel because they want a better way of life. They want more money, more education, more freedom, more health, etc. These countries rank very low on the Human Development Index, and they would like to improve that Radha that is not the first thought that comes to their minLet’sLets rebel so we can boost our ranking.” Essentially, that is what they want though. They want a better way of life. But just as I learned as a teenager, rebelling can often make you much worse off. My overall wellness typically decreased as I rebelled, and so does these people in poor counties.

Collier explained a situation in Africa where this conflict trap was exemplified. The current country of Eritrean was involved in 30 years of civil war. The people of Eritrea were very poor during the war. Once the civil war was over, and the country started rebuilding, Eritrea went to war unnecessarily with Ethiopia. When the people showed their displeasure toward the president of Eritrea, he imprisoned them all. He then enlisted young men as soldiers for his war.

This created a whole new cycle of wars that has left the country impoverished. The next trap is the natural resource trap. Countries that are abundant in natural resources tend to be poorer than countries that are not abundant in natural resources. Often these natural resources cause conflict over ownership, which can cause a conflict trap. Excess natural resources also can cause corruption in government and business. Countries that are rich in resources will over-specialize in exporting that resource, and the other parts of their economies will not flourish. In 1970’s Nigeria, oil revenues were very high, so they specialized in oil.

Their other exports like peanuts and cocoa became unprofitable, and those markets collapsed. This hurts the economy as a whole because it only had one specific thing it was good at. When countries are landlocked with bad neighbors, this becomes another trap. They are unable to trade effectively because they do not have access to the sea. When looking at many landlocked African countries, this trap seems obvious. In landlocked Africa, there are very few trading partners. These countries can only trade with their neighboring countries (which are also poor) because they do not have access to ocean shipping methods. Their infrastructure is very poor, and shipping anything is ineffective. Essentially, they are trapped.

Developed countries that are looking to import goods are looking to import those goods at an inexpensive price. They cannot import those goods inexpensively from these landlocked countries, so they go elsewhere for trade. When I shop on the Internet, I look for the cheapest deal I can find. One thing that I typically look for is the shipping price. My favorite site to buy products from is Amazon. I buy from Amazon because shipping is free, fast, and guaranteed.

When countries are looking for a trading partner, they are looking for the same qualities. Shipping from landlocked countries is expensive because they do not have access to the ocean.

Shipping is also not fast, because the proper infrastructure is not in place, and goods have to travel a longer distance typically. In smaller, poorer countries, shipping is anything but guaranteed. Importers are hesitant to buy from places that they deem unsafe or unreliable.

The last trap that Collier focuses on is the bad governance trap. This is a fairly self-explanatory trap. If the leaders of a country are ignorant or corrupt, they will hurt the economy. Countries that do not have a high level of education tend to have underqualified leadership. These leaders make poor economic decisions that hurt the country even more. If a country is known to have poor or corrupt leadership, other countries that are looking to trade will trade with a more proven or trustworthy partner.

Like I said in the beginning, all countries have the opportunity to get out of these traps. They may be extremely difficult, but it is possible. Collier suggests a few different policies that may help these countries escape their poverty traps. One thing I think is interesting that Collier says is “Aid alone is unlikely, in my view, to be able to address the problems of the bottom billion, and it has become so highly politicized that its design is often pretty dysfunctional.” I have never thought of “too much” aid for poor countries, but I understand that it can eventually become detrimental. Collier also suggests military intervention when rebellions get out of hand or when coups try to overthrow democratic governments. He also suggests that trade policy be more friendly for developing countries. It is useless to provide aid, and then have trade policies that impede development.

I largely agree with Collier on most of his theories. He has many examples to provide evidence that countries get stuck in the traps he explained. There is more going on with the economies of developing countries than these four traps, but they explain large problems. The more effective we are in minimizing these problems, I believe the more successful we will be in irradiating extreme poverty. Collier seemed to have a very negative view of foreign aid to countries. I understand that too much aid is a bad thing, but aid is often necessary to simply help these people live. It is easy to try to understand why people are poor, but getting them out of poverty is an uphill battle.