Get US money out of the Third World now? Or, how best to ameliorate poverty?

June 26, 2006 8:22 AM

GlobalPovertyFilter: Is poverty in the third world and emerging countries like India and China due more to exploitation by multinational corporations, or due to disconnection from globalization?

IIRC, about half the Earth's population lives on under $2 per day.

What I want to know is, where (and how) do they live? Are they generally in disconnected countrysides, living a life that's not to different from how most of the world lived in 1500? Are they in factories cranking out Gap T-shirts and the like?

I'm accustomed to hearing fact-free bromides and smug cliches from both sides of the debate, but I don't know much about what the data show, or where to look for good data. Thanks in advance for any suggestions on either of these fronts.

Question inspired by this globalization-skeptic comment in the Warren Buffet thread.

posted by ibmcginty to law & government (16 answers total)

Start here.
posted by flabdablet at 8:49 AM on June 26, 2006

I've suggested this in other threads. Development Economics, by Debraj Ray. (And no, I'm not related or associated with him, but this book really cleared up a great deal to me regarding poverty traps, vicious cycles, the futility of foreign aid, and the power of population growth as a means of keeping people poor.
posted by SeizeTheDay at 9:00 AM on June 26, 2006

I don't think either of your options are particularly accurate.

Often the change is just from one style of poverty to a different one. In some places (Ecuador comes to mind) there's enormous amounts of environmental damage that accompanies the development and that ruins the lives of others... of course that doesn't happen everywhere.

It's not a simple issue. Anybody who tells you firmly that it's extremely good or it's extremely bad is full of shit.
posted by I Love Tacos at 9:05 AM on June 26, 2006

P. J. O'Rourke took a look at this in his book "Eat the Rich." His conclusion was that while no one would want to have to do it, $2 a day income in an agrarian economy means something entirely different from $2 a day in an industrial economy.
posted by ZenMasterThis at 9:06 AM on June 26, 2006

I'm in Goa (India) right now, and this precise question is driving me nuts. Just looking around me, I can see so many ways in which life can be made easier (and cheaper) for everyone and the prevailing attitudes are (1) the govt should do something about it and (2) it's always been that way, it was good enough for our grandparents, and it's good enough for us.

*fume*

But to answer your question, in my opinion, it's the pervasive corruption that's doing a lot to keep people poor. You need to pay a bribe for just about everything. You get around paying fees for civic services by paying bribes. And nobody seems to make the connection that if you don't pay the service fees, services will begin to deteriorate....

Ok, I'll get off my soapbox now...
posted by Arthur Dent at 9:25 AM on June 26, 2006

Talking about $2 /day has no meaning. Money has different values in different places in the world. Middle class Indians make far less than middle class North Americans, but can hire servants and have nice houses (service is cheaper there). In Canada, you live with a bigger house on less money than you would in Britain, so when Canadians are paid less, it's not a big deal.

It's not about how much money you have, it's about the life you have with that. You wouldn't say that an English nobleman in 1600 were poor because he only had £5,000 a year.

I don't study currently developing countries (taken a few classes, have friends who do), but I do study Britain in the period of development (16th to 19th century), and nutrition (a big part of quality of life) was better for a lot of rural Britons in 1700 than it was in 1800. But wages didn't go down - prices went up. Also, people had less stability -- in 1500, the majority of rural people had access to some land, either to grow crops, to graze animals or even just to have a vegetable garden. (Vegetables were so cheap in c1700 that they rarely appear on household or institutional budgets, because most people didn't buy them). But over the next few centuries, more and more people lived on their wages alone. If you lost your job, you were in big trouble - which is one of the reasons the poor law system developed (which, flawed as it was, still was rudementary social security).

In the developing world, many people are losing access to land and natural resources and becoming dependent on wage labouring -- very low wages, even by their own economy -- but it's happened in one century or less (not slowly over four centuries) and I don't see a system of social support developing.

Globalisation is itself complicated. It can bring wealth, when globalisation means opening up new markets to locally produced goods - few people anywhere are self-sufficient. In India, outsourcing is bringing some well paid skilled work to the country and local companies and economies are benefitting. But when globalisation means the exploitation of labour or natural resources with the profit either leaving the country (accruing to a multi-national) or into the hands of a small minority, while taking away economic resources from people (land being a biggie, but also water, forests. etc), then globalisation can contribute to poverty. When a Canadian or British company goes in somewhere and makes a fortune off their oil while employing locals only in the lowest paid positions, that's not really going to help their economy. You also have mixed bag scenarios - In China, globalisation has brought a lot of money into the economy (not just to international investors), but it's been extremely uneven, so that some have become fabulously rich, while others are, in comparison, much poorer, and inflation makes this worse.

It's not about development=bad, but bad development=bad. In whose interest is the development? Who is investing, to whom does the bulk of the profits accrue? Does this development come at a price - does it hurt the environment, affect local agriculture, cause inflation? Do the benefits outweigh the costs for the local people? Are the local people involved - is it local businesses working with the strengths of the place? Or are they trying to bottle Coca-Cola with groundwater taken from a region suffering from drought. (This is currently happening in India - and it's ruining the farmers there.)
posted by jb at 9:38 AM on June 26, 2006

jb: [In China] some have become fabulously rich, while others are, in comparison, much poorer.

Well, any kind of development is going to be uneven. It's just not going to benefit everyone equally, day by day, year by year. So, what can we do to see to it that globalization and international investment do benefit the poorest?

When a Canadian or British company goes in somewhere and makes a fortune off their oil while employing locals only in the lowest paid positions, that's not really going to help their economy.

Well, that's an assertion, but what are the empirics? Are those who are hired better off than they would have been? How common is this pattern of globalization? Is it likely that the natural resources will be siphoned off, temporarily, marginally enriching a small handful of locals, leaving no lasting benefit? Has that pattern happened before?

I asked the question to get a better handle on the empirics of globalization. Anecdotes and plausible arguments run in both directions.

I read Debraj Ray's textbook in college, was somewhat mystified by it then, I'll have to try again-- thanks, STD, and all others.
posted by ibmcginty at 10:12 AM on June 26, 2006

Is poverty in the third world and emerging countries like India and China due more to exploitation by multinational corporations, or due to disconnection from globalization?

Paul Krugman argues forcefully that globalization benefits the Third World.

After all, global poverty is not something recently invented for the benefit of multinational corporations. Let's turn the clock back to the Third World as it was only two decades ago (and still is, in many countries). In those days, although the rapid economic growth of a handful of small Asian nations had started to attract attention, developing countries like Indonesia or Bangladesh were still mainly what they had always been: exporters of raw materials, importers of manufactures. Inefficient manufacturing sectors served their domestic markets, sheltered behind import quotas, but generated few jobs. Meanwhile, population pressure pushed desperate peasants into cultivating ever more marginal land or seeking a livelihood in any way possible....

... wherever the new export industries have grown, there has been measurable improvement in the lives of ordinary people. Partly this is because a growing industry must offer a somewhat higher wage than workers could get elsewhere in order to get them to move. More importantly, however, the growth of manufacturing--and of the penumbra of other jobs that the new export sector creates--has a ripple effect throughout the economy. The pressure on the land becomes less intense, so rural wages rise; the pool of unemployed urban dwellers always anxious for work shrinks, so factories start to compete with each other for workers, and urban wages also begin to rise. Where the process has gone on long enough--say, in South Korea or Taiwan--average wages start to approach what an American teen-ager can earn at McDonald's. ...

The benefits of export-led economic growth to the mass of people in the newly industrializing economies are not a matter of conjecture. A country like Indonesia is still so poor that progress can be measured in terms of how much the average person gets to eat; since 1970, per capita intake has risen from less than 2,100 to more than 2,800 calories a day. A shocking one-third of young children are still malnourished--but in 1975, the fraction was more than half. Similar improvements can be seen throughout the Pacific Rim, and even in places like Bangladesh. These improvements have not taken place because well-meaning people in the West have done anything to help--foreign aid, never large, has lately shrunk to virtually nothing. Nor is it the result of the benign policies of national governments, which are as callous and corrupt as ever. It is the indirect and unintended result of the actions of soulless multinationals and rapacious local entrepreneurs, whose only concern was to take advantage of the profit opportunities offered by cheap labor. It is not an edifying spectacle; but no matter how base the motives of those involved, the result has been to move hundreds of millions of people from abject poverty to something still awful but nonetheless significantly better.

Possible derail:

Poverty, in the form of subsistence farming--with a surplus extracted from the peasantry to support a governing class and an army--is the historic norm throughout most of recorded history. That is to say, the poor countries have always been poor. To me, the more interesting question is, how did the rich countries become rich, over the last 250 years or so?

The process is usually called industrialization: the accumulation of tools, machines, and other forms of physical capital. If you're a farmer, for example, you can farm much more land and grow much more food if you have a tractor and other modern equipment than if you're using oxen to plow your fields, or worse yet hand tools. According to Krugman, in 1840 most Americans were farmers; today, much more food is grown by less than 2% of the workforce.

Similarly, if you're digging ditches, you can dig them much faster if you're operating a backhoe than if you're using a shovel. If you're making cloth, you can do it much faster with machines than by hand.

What determines the standard of living in a country is productivity: how much can the average worker produce? (In the long run, you can't consume more than you can produce.) With more and better tools, machines, buildings, infrastructure, etc.--physical capital--each worker can produce more.

And to accumulate more physical capital, you need surplus production: if everyone's a subsistence farmer who consumes all that they produce, it's not possible to put any effort into making tools and machines.

In Foreign and Other Affairs (1964), John Paton Davies Jr. summarizes the process of industrialization:

The cost has been high for those societies that have done it on their own. Britain, Japan, and the Soviet Union are three disparate cases. About the only thing that they had in common was that they were in the same general latitude. Yet their patterns of growth had certain things in common.

A small minority decided instinctively or by plan to industrialize and expand the economy. They kept control of the process in their own hands. They siphoned off a small fraction of the increase for their personal benefit. The bulk of it was reinvested. None was distributed to improve the lives of the workers. To the contrary, generations of workers and peasants were sacrificed to the national growth process. But it worked.

In The Myth of Asia's Miracle (1994), Krugman gives a similar story for the East Asian tigers:

Consider, in particular, the case of Singapore. Between 1966 and 1990, the Singaporean economy grew a remarkable 8.5 percent per annum, three times as fast as the United States; per capita income grew at a 6.6 percent rate, roughly doubling every decade. This achievement seems to be a kind of economic miracle. But the miracle turns out to have been based on perspiration rather than inspiration: Singapore grew through a mobilization of resources that would have done Stalin proud. The employed share of the population surged from 27 to 51 percent. The educational standards of that work force were dramatically upgraded: while in 1966 more than half the workers had no formal education at all, by 1990 two-thirds had completed secondary education. Above all, the country had made an awesome investment in physical capital: investment as a share of output rose from 11 to more than 40 percent.

This suggests that a key element in successful development is having the discipline necessary to sacrifice current consumption, in order to achieve higher productivity in the future by increasing investment. In other words, a high domestic savings rate.

According to the World Bank, in 1990, gross domestic savings in India as a percent of GDP was 22%; in sub-Saharan Africa, 16%. In Hong Kong, Singapore, South Korea, and China, the figures were 36%, 44%, 37%, and 38% -- nearly twice as high.

More here, with references.
posted by russilwvong at 10:38 AM on June 26, 2006

Interesting question!

I have no references except for my vague memories of Peacemaking class in law school. That said, I don't think you can have a meaningful discussion about this topic without considering colonization.

Capturing and exploiting colonies was the first kind of globalization, right? And the countries doing the colonizing were looking for places with rich natural resources to exploit. So many areas that are poor now were, ironically, fairly wealthy (at least in terms of food availability, etc.) before the colonizers arrived.

It's no coincidence that countries like India or Ecuador are rife with corruption. In some cases, the colonizers set up ineffective governments on purpose, to grant themselves more control after they reduced their explicit control. This recent metafilter post did a great job of explaining that strategy.

You could argue that America is a former colony success story, but of course it isn't a success story for its original inhabitants. South Asian Indians, despite the corruption and poverty, are probably doing better as a group than the few remaining American Indians.

So now what? Can globalization help erase the heritage of colonization, or is it just making things worse? I agree with others that globalization is complex and it's difficult to generalize. I do know that we're outsourcing our labor without outsourcing our labor laws. It's cheaper to hire workers in developing countries because you're allowed to open sweatshops there, right? It that sense, it certainly seems exploitative. And hopefully it's just a matter of time until those countries manage to build more protective regulations, either through gradual change or revolution.

I hope these are more than fact-free bromides. I welcome disagreement and facts that point in either direction!
posted by equipoise at 11:01 AM on June 26, 2006

The book Confessions of an Economic Hitman is a first person account of these phenomena. The author worked as a "field economist" for a long time, and he became pretty disheartened after seeing how the "system" works. It's a pretty badly written book, but it's definitely a lay-person's guide to how well (and also how poorly) foreign aid, contractors, debt, natural resources, and development work.
posted by zpousman at 11:30 AM on June 26, 2006

To me, the more interesting question is, how did the rich countries become rich, over the last 250 years or so?

The process is usually called industrialization: the accumulation of tools, machines, and other forms of physical capital.

Ok, please. Let's be just a little bit more realistic. Remember African slavery? Remember the vast colonial empires? Remember the various trade wars? Capitalism didn't make the West wealthy. The massive, unprecedented exploitation of the East made the West wealthy. Capitalism provided a logic, a modus operandi, but past empires (Athens, Rome, the Chinese dynasties) have all followed the same basic game plan: seize raw materials with cheap/free labor and feed it into a market-driven manufacturing base. The West just perfected this and did it better than anybody else.

The question itself is pretty flawed. What is the difference between being exploited by multinationals and being 'disconnected' from globalization? Are you equating globalization with exploitation? It really doesn't make much sense.

To answer your more general question, it's usually pretty clear that the 'source' of poverty almost always comes down to education. Education--not aid or factories--is really the only investment that's proven itself against poverty. Whether you're a peasant in the country side scratching dirt or a factory-caged wage-slave (and, you can imagine which you'd rather be), your net opportunity is still pretty much zero.
posted by nixerman at 11:40 AM on June 26, 2006

Thanks, russilwvong-- I'll go through your links later on. I'll be interested in particular to see the savings rate discussion spun out-- the criticism I've run into is that the list of countries that played by IMF/IBRD rules and succeeded begins with Korea & Taiwan, and ends there too. This might speak more to developed nations' cowtowing to domestic industries than anything else, though.

Equipoise-- that's a very interesting and useful discussion to have. I would say that it's not clear to me that, were it not for European colonialism, the rest of the world would have hit upon the Industrial Revolution and developed rapidly. Your discussion seems a bit Euro-centric, to me. After all, world history-- and empire-building-- hardly began in 1500. Arabs, Chinese, Africans, Indians, Mongols, everyone else were pretty good at it for a time. China almost did have an industrial revolution around the 1200s, but the emperor at the time didn't like the decentralization of power that came with merchants acquiring wealth. But none of that takes away from the validity of your points.

It's cheaper to hire workers in developing countries because you're allowed to open sweatshops there, right?

Well, define "sweatshops." Do you mean, conditions like the Lowell Mills in the US in the 19th & 20th centuries? Or worse? Has any country developed without going through a period of factory-dependent work? Can something be done to allow today's developing countries to circumvent, or shorten, that phase?

Also, what are the alternatives for the people in those countries? Would they rather work in fatories that we in the US find unacceptible, because our alternatives are better?
posted by ibmcginty at 12:01 PM on June 26, 2006

I would say that it's not clear to me that, were it not for European colonialism, the rest of the world would have hit upon the Industrial Revolution and developed rapidly. Your discussion seems a bit Euro-centric, to me. After all, world history-- and empire-building-- hardly began in 1500.

Well, right. Without the industrial revolution, exploitation seemed relatively tame. Sure, you'd capture slaves, treat them horribly, maybe demand steep taxes. But that's nothing like declaring ownership over all the land and shipping all of the national resources somewhere else. Which is why it seems like the Roman or Egyptian or Vietnamese empires didn't cause the extreme poverty and governmental collapse that the British empire did. But maybe that's just because we're closer (chronologically speaking) to the Western colonization of the world, so we're more able to view its results. Certainly the domination of the Christian empire in the dark ages sucked.

Has any country developed without going through a period of factory-dependent work?

Any pre-industrial revolution country developed without going through a period of factory-dependent work, although I'm not sure that many were fabulously successful without depending on some kind of exploitation (e.g. slave labor). Of course, it depends on how we're defining "success." There have certainly been happy people throughout history who weren't living in a post-factory-dependent country. "Developed" != "happiness."

Can something be done to allow today's developing countries to circumvent, or shorten, that phase?

What a great question! Marx had his answer...I don't know one that satisfies me.
posted by equipoise at 2:29 PM on June 26, 2006

When a Canadian or British company goes in somewhere and makes a fortune off their oil while employing locals only in the lowest paid positions, that's not really going to help their economy.

Well, that's an assertion, but what are the empirics? Are those who are hired better off than they would have been? How common is this pattern of globalization? Is it likely that the natural resources will be siphoned off, temporarily, marginally enriching a small handful of locals, leaving no lasting benefit? Has that pattern happened before?

I'm basing this on the ciolonial history I have read, where British "investment" in India and Africa led to much greater poverty than there had been before. Africans were put into tiny reserve areas so whites could use the bulk of the land to grow crops for world markets, and people wonder why the Africans starved. In Mozambique, the Portuguese colonial government forces people to cultivate cotton for world markets at gunpoint, even as their own food crops were going unplanted. This is bad globalisation. India exported grain to Britain in the 1870s and the 1890s, even as 20-40 millions Indians died of starvation; those nearest to the railway lines and lines of trade were even more likely to suffer (because grain prices were higher due to demand from European buyers). Mike Davis's Late Victorian Holocausts is a good look at some of these issues, as is just about any colonial history; Cotton is the Mother of Poverty is a chilling read on the situation in Mozambique in the mid twentieth century.

But basically, all we can offer is argument and anecdote - if you want to understand more, you will have to read a great deal of history, sociology and economics.

Equipoise-- that's a very interesting and useful discussion to have. I would say that it's not clear to me that, were it not for European colonialism, the rest of the world would have hit upon the Industrial Revolution and developed rapidly. Your discussion seems a bit Euro-centric, to me. After all, world history-- and empire-building-- hardly began in 1500. Arabs, Chinese, Africans, Indians, Mongols, everyone else were pretty good at it for a time. China almost did have an industrial revolution around the 1200s, but the emperor at the time didn't like the decentralization of power that came with merchants acquiring wealth. But none of that takes away from the validity of your points.

Here we are moving directly into my field (economic and social history of Britain). The economic growth of Britain in the critical period (c1650-1750) leading up to the industrial revolution was directly based on slave labour and the cash infusion into the country from the sugar and tobacco that was produced - much of which was re-exported to Europe for other goods. This was the source of much of the capital in the fast growing capitalist system - fortunes were made off slave labour, and reinvested in Britain in farms and other industries.

Now, this wasn't the industrial revolution - that had less to do with capitalism (considering that the Low Countries and Italy had an older, more well developed capitalist system), but on the combination of technology and easily accessible (and thus cheap) coal. China had the possible technology, but not the coal (or at least, not coal in hills above good river transport, as you find in Newcastle. Welsh coal wasn't that important until the 19th century). The difference between the industrial economy and the "advanced organic economy" was not it's economic organisation, but the change in the source of energy. Coal represented thousands of years of forest growth - just as China was facing an energy crises in the nineteenth century, Britain had basically struck black gold. Even by 1700, London was being fueled by Newcastle coal, whereas the Dutch republic was beginning to run out of peat.
posted by jb at 4:30 PM on June 26, 2006

I'll give the Brazilian POV on causes of poverty, how poor people live here, and the influence of globalization. Keep in mind that I live in the urban, industrialized Southeast, come from a mixed lower-middle/middle-class family, and I am somewhat neoliberal, so, my opinion will be biased.

Causes:
If you ask the average person, there are some ready answers: "We suffered exploitation colonization, instead of occupation colonization (like in Northeastern USA)". "We have been kept underdeveloped by the world powers, through debt and unequal commerce".

Both have some truth in them, but, today, I tend to blame it mainly on our own (should I say our elite and government's) past mismanagement. While the rest of the world (Germany, Japan) was having the second wave of industrialization (1850-1900), our discourse was that "the vocation of Brazil is agrarian". So we kept our economy plantation-based to the beginning of 20th century. Here we fork between the South/Southeast and the rural Northeast (Urban Northeast is very similar to Urban Southeast).

Rural Northeast:
Roughly no change. Big plantations (although slave work has been switched to impoverished peasants), drought, poverty, agrarian "Barons" ruling.

Southeast:
The plantation model was supplanted by immigrant free peasants, which came to form a proto-middle class, and this led to some urbanization. Then we had a semi-fascist boost on our economy, during Vargas, in which our industry was at least comparable to some lagging developed countries. After the WWII (where, surprisingly, we were on the allied side), Vargas came down, and we had some opening of the market by the following presidents. In the 60s we had a military coup, and were isolated from the rest of the world, which meant that any crappy industry producing crappy products could survive on the internal market alone.
This led to artificial prosperity (~10%/year growth), maintained by inflation and international debt. This artificial prosperity led much of the rural population to the urban centers, leading to the formation of shanty towns ("favelas"), and unemployment. The military tried to keep unemployment low by financing pompous enterprises (like the Itaipu power plant) via external debt. By the time the military left power, the economy had crashed and burned into hyperinflation, unemployment and external debt, in the 80s (sometimes called "the lost decade"). Then we had a lot of experimenting in our economy (Collor - tried to control inflation with a great recession, and opened the market, all at once, to imports, severely hurting the uncompetitive internal industry). The last 15 years had Plano Real, which effectively controlled inflation, and traded our external deficit for internal debt (which is massive to this day).

Current state:
Uncompetitive and mismanaged industries that thrived during the "market reserve" (isolation) time are still dying, so we have high unemployment rates. Some areas of the economy have adapted to international-level productivity, and we have some competitive national industries, although most of the production is still dominated by international companies. We have a large service sector, but informality is quite high. The economy is at least stable, but with mediocre growth (3-4%/year). Unemployment is high, but not critical. Government corruption is high, but policies are much more reasonable and sober than the propagandistic policy of the military, or the experimentation of Collor.

Poverty in Brazil:
We have some broad stereotypes of poor people in Brazil: In rural areas (sp. semi-arid northeast), we have the isolated countryside, with famine, drought, third world diseases. These people either have a small property, which is hardly enough to provide for them, or they work for an agrarian "Baron" (big land-owner), for barely subsistence wages.

In the cities (Brazil is highly urbanized, and much of the poverty is in urban areas), we have some homeless people. We also have many favelas (in Sao Paulo, they are mainly in the outskirts of the city, in Rio they are more spread inside the city). People in the favelas work either work inside them (small commerce), or in the city, in low wage positions. Favelas have precarious services, sometimes lacking even the basic ones (like sewage). The favelas generally receive very few attention from authorities, so they end up becoming safe harbor for criminals, specially drug dealers.

Public Services:
There is free public access (as well as a private sector) to most welfare, but of lower quality (most buildings are located outside favelas, so people from favelas need to move some distance to get to schools/hospitals). We have a bizarre public school system, with crappy K-12, and elite public universities. As for health, we have hospitals with very good doctors, but underfunded, underequipped, and with long waitlines (I'm talking about waiting weeks/months for an exam). We also have some small health posts that provide simpler services (like vaccination, simple consults). Public transportation, at least in the cities where I lived, is OK, and has a reasonable price. Streets are generally dirtier and asphalt more beaten, but high-traffic urban ways are reasonably well maintained. We have some privatized and/or toll funded state highways that are high quality, but most toll-free federal highways are crap.

Globalization:
For Brazil:
Our economy is driven a lot by multinationals. Foreign multinationals generally offer good jobs compared to the local market. This means upper-middle-class jobs that drive the local service and goods market. For a detailed explanation of multinational jobs, comparing different countries wages, and the effect of a middle class in the economy, see jb's post.

When foreign investment wanes (as it has in the past), we usually plunge in a crisis. Actually the problem in external commerce that we face is more protectionist barriers to our exports than low-cost imports. So, true, multilateral globalization could help us more than harm, IMHO.

Also, poverty in third world countries go back to at least the colonization times, and has lots of inertia, so it is not that simple to pin it to a phenomenon of the last few decades (globalization). Singapore opened itself to all sorts of multinational influence, and, still today, its economy is mainly driven by multinationals, but it is highly developed. Japan has a very nationalistic culture, and is also highly developed. And I'm sure I can find both open and closed countries among the poorest in the world.

(Damn, my posts here in MeFi are becoming BIG!)
posted by qvantamon at 4:49 PM on June 26, 2006 [1 favorite]

OK, my post applies to industrializing, developing, emerging countries (China, India, Brazil, Russia, Argentina, Mexico).

The situation in non-industrialized, non-developed, third world countries (Sub-Saaran Africa, Haiti) is completely different. Colonization ended recently, (decades ago, instead of centuries ago), and was completely brutal to their economies. I have few information about their situation, but, from what I know, they have almost no middle-class, no industry, no service sector, only the basic commerce.

In a quick analysis, to get out of poverty, they need non-corrupt governments (many of them are ruled by autocratic dictators), and a middle-class to push their economy. And I think _ethic_ multinational investment (actual industries, complying with decent standards of wage and work conditions) is a good way to raise a middle class there. The problem with Africa is not globalization, is that the only multinationals that seem to be interested are extrativist exploitators (diamonds, for instance), which put/maintain dictators in power in order to keep their business as lucrative as possible. There is very few real industrial investment there (factories, not even assembly lines).
posted by qvantamon at 5:14 PM on June 26, 2006