I really enjoyed The Bottom Billion. I read it after Stephen Lewis’s Race Against Time, which was a bit of a shift. According to most of the information we covered and books we read, what will fix the situation is more money. This book presents a different view of the efficacy of aid, and I think it has at least something to do with where the authors are coming from.
Stephen Lewis, as someone who works for the UN, doesn’t have a great deal of actual power. The battle he is fighting is for awareness, for the “hearts and minds” of people in power, so that– once won over– they can put money where he thinks it’s needed. Also, in Race Against Time he was dealing with a humanitarian crisis. In a medical situation money is very much needed to buy medical supplies, hire nurses, etc. His call is always for More Money.
And on the other side, we have Paul Collier, who has worked for the World Bank. (I know, that den of all evil. BOO, HISS… wait.) His position is not to make people aware of bad situations– there are people like Stephen Lewis to do that. Rather, his job is to look at economic situations and make sure that the money given helps as much as possible. It’s all about looking at the big picture, with all possible factors and positions, and making the best decision with what you have to do. The head and the heart together. The call is for Smart Money.
I like the big picture. I don’t really believe that problems arise in isolation, and I love seeing connections made between points. (Makes me feel like I understand what’s going on.) So yes, I really liked Bottom Billion. It doesn’t make me feel like I know WHAT to do, but at least I know more of the complexity of the situation.
What complexity, you say? WELL LET ME TELL YOU.
Paul Collier opens the book talking about how we’re used to hearing the world described. There are six billion people (at the time the book was drafted), and of those six one billion are in the “developed” nations. The other five are “developing,” and they need help. He says that this is not really true. Yes, there is a top billion, but of the “developing” nations, four billion of them are doing quite well at catching up. They have growing economies, and more importantly, they have a clear path forward to get to “developed” status. The problem lies in the bottom billion (ah-hah, seeing the connection with the title now, eh?) which are not improving. While almost every nation on earth has grown and improved over the past 50 years, these nations have just stayed put in miserable conditions. It’s the bottom billion where attention needs to be fixed, he says.
So, how do we go about helping? And how come these nations are stuck in the first place? Fascinatingly, Paul Collier points out that these nations who have failed to grow are in one or another of a certain list of bad circumstances, and explains why these bad circumstances (he calls them “traps”) are a bad thing.
The traps are:
- It is pretty self explanatory as to why this is bad for a country. People die, economies stagnate, disease spreads, a legacy of organized killing creeps into the culture, and other nations don’t want to deal with you.
- But even worse, once a nation falls into a cycle of civil wars or coups, it just keeps happening. This is not to say that any nation that has a civil war is going to be stuck in an endless cycle of war, just that once you have one, you have a 50% chance of having another one within the next ten years.
- 73% of nations in the bottom billion are either currently engaged in a civil war or have just been through one.
- The Natural Resource Trap
- At first glance this appears to be a good thing, so why are natural resources a trap? First of all, the high amount of resources being exported causes the country’s currency to rise– and other exports (including food, in many places) becomes uncompetitive. Oil (or diamonds, or lumber, or mining) is suddenly the only game in town. This is bad for the overall economy, and also bad for when the resource runs out.
- The large amounts of natural resource money also floating around an economy also tends to make a democracy corrupt with startling rapidity.
- Therefore; resources = good, only resources = bad in unexpected ways.
- 29% of countries in the bottom billion have economies dominated by resource wealth.
- Trapped inland with bad neighbours
- Being landlocked severely restricts trade, both moving in and out. If your neighbours don’t feel like letting you use their roads, or they’re locked in another civil war (sadly common) or if the roads out are terrible, you’re just stuck. You can’t get things you need in, and you can’t get things you want to sell out. You’re just on you own.
- Another factor to consider is that your neighbours are in many cases your prime trading partners. (As Canadians, we should understand that.) So if your neighbours are not buying, you do not end up looking like Switzerland, you end up looking like the Central African Republic.
- 38% of countries in the bottom billion are landlocked.
- Trapped in a small country with bad governance.
- Basically, the opportunities for a government to improve a country are a bit hit and miss, but it is sadly easy for a bad government to utterly destroy an economy– and shortly after that to become a “failing state” and destroy a country.
- Not all bad governments result in bad economies– he contrasts Chad and Bangladesh, which tie for “most corrupt governments in the world” (now that’s a title you don’t want) but which have very dissimilar economies. The difference is that Bangladesh is in a position where if it avoids making actively terrible decisions it can get along okay (it’s not stuck in any of the other traps), whereas Chad is landlocked, and its economy is based primarily on aid and oil. To get ahead it would need really good, non-corrupt government, which it emphatically does not have.
- More than 75% of the nations in the bottom billion live in what can be defined as “failing states,” where the government is actively making disastrous decision, corruption is rife, and there is little or no way for anyone to get ahead.
These are all clearly bad things, but interestingly, they’re not issues that will be fixed with the straight application of lots of money. In talking about the resource trap, it’s pointed out that a great deal of aid money has a similar effect to a great deal of resource money, in that it tends to aid corruption. There’s also the stat that an estimated 60% of African military spending is funded by aid money– almost none of which was intended to purchase guns by the people who offered it. But the solution is not to just cut off aid money either, it does have an effect. That the amount of money that has come into the african economy because of oil is roughly equal to that which has come in for aid, and while the aid money has had a measurable positive effect on the lives of citizens and the economy as a whole, the oil money has had a negligible effect. Paul Collier’s main contention is that money is needed, but we can’t just give and assume we’ve fixed the problem that tugged at our heartstrings. We have to have “the head and the heart working together.” He then goes on to outline ways that countries can break out of the traps, and how we can (hopefully) help.
I’d like to stress here that this is not a summary of the book, it’s merely a teaser of how very interesting it is. There are so many more interconnected factors he talks about– for example whether poverty or oppression is more likely to spark civil wars, and the costs and benefits of military intervention in failing states. However, I am not here to take a possible book sale from an interested party, I’m just here to raise awareness. (Not as well as Stephen Lewis, I know, but he’s a master!)<
In conclusion, you should read this book. Yes, you. You will learn fascinating things.