Hi everyone,
As you know, There are a 196 countries in the world. 25 of them are very rich defined as having an average wealth per person of over $100,000 a year. They are but far more countries are quite poor and some which we're considering here are very very poor these are the 20 poorest countries in the world where the per capita wealth is under $1,000 a year or under $3 a day every country is now more or less on a path to growth but the poor ones are growing very very slowly. If Zimbabwe continues at its current growth rate, it will qualify as a rich country in 2722 years. Why some countries prosper and others stagnate so that we can understand what rich countries are doing right and get a better grip on the challenges and hurdles facing poor countries there are basically 3 factors that determine whether a country will be rich or poor.
The first is institutions;
Institutions are beyond important. Broadly speaking, rich countries have good institutions and poor ones have very very bad ones. The correlation between poverty and corruption is direct the richest countries in the world are quite simply invariably.
The Corruption;
The least corrupt ones and the most corrupt countries are also the poorest when countries are corrupt, they can't collect enough taxes to get the good institutions. They would need to escape the poverty trap half of the wealth of the world's poorest 20 countries goes into offshore accounts, lost revenues in these countries totals between 10 and 20 billion dollars a year. Meanwhile, without an adequate tax base, poor countries can't invest in police education health and transport now a more generous way to look at corruption is that, it's really a case of clan based thinking say, you're hiring someone in the rich countries. You're meant to do so simply on merit interviewing lots of candidates then picking the best one irrespective of any personal connection but in poor countries under the sway of clan based thinking that approach would itself be seen as corrupt. It's your duty to disregard the so called best candidate from an anonymous Bunch order to pick someone from your own team. Your uncle, your brother, your second cousin, the guys from the same tribe as a result poor countries don't allow themselves access to the intelligence and talent of the whole population.
Religion and Wealth;
There's a second thing that keeps countries poor culture what goes on in people's minds their outlooks and beliefs a striking statistic pops up. Here in relation to religion if there's one generalization you can make about religion and wealth. It's that the less people believe the richer they stand a chance of being nineteen of the richest countries in the world, have seventy
percent or more of their populations saying that religion is not at all important to them the exception. Here is unsurprisingly the United States which manages to combine great religiosity with huge wealth more on that in a second and conversely the poorest nations in the world are also extremely believing once. Here's how many people think religion and the supernatural is deeply important in the following countries in the world's poorest country simply everyone is a believer why is belief quite so bad for wealth creation because in general religiosity is connected up with the idea that the here-and-now can't be improved, so, you should focus on the spiritual and look forward to a next world instead it makes quite a bit of sense when you live here in the rich world. On the other hand, people are generally great believers in their capacity to alter their destiny through effort and talent incidentally to explain the anomaly of the United States religion seems not to slow down economic growth here because it's a particular sort of religion an overwhelmingly Protestant and exceptionally materialistic kind the
American God doesn't want you to think of building the New Jerusalem in the next world. He wants it here and now in Kansas or Houston.
Regions;
There's another big factor that determines the wealth and poverty of Nations geography. Poor countries are overwhelmingly located in a tropical regions. This isn't a coincidence. Life is in many ways simply far far tougher there the problems begin with agriculture tropical plants are generally a lot less packed with carbohydrates poor countries have worse soil. Also, in surprisingly a tropical climate can be disadvantageous to photosynthesis historically a key determinant in the likelihood of societies growing rich with their possession of large domesticated animals such as horses and oxen which liberated a huge part of the workforce from having to plow by hand but in tropical Africa domesticated animals have throughout time been devastated by a further of palling scourge that sits a fly this small fly exclusively present in Africa because of its heat and humidity knocks out animals on an enormous scale making them sleepy or inactive and has had a profound effect on the ability of Africans to develop technology, increase agricultural productivity and amass wealth. It isn't just plants and animals that suffer in the tropics in the middle latitudes.
Humans are open to a terrifying array of diseases including a hundred percent of low income. Countries are affected by at least five tropical diseases. Simultaneously, the magical temperature which has helped to make rich countries rich is 16 degrees centigrade, however, superficially unpleasant that drop below 16 degrees as autumn starts to bite is quite literally a foundation stone of civilization geography also encompasses transport and poor countries are on the whole very badly connected landlocked Bolivia and semi landlocked Paraguay are the poorest nations. In South America Africa has only one major navigable river the Nile and hosts 15 landlocked nations 11 of which have average incomes of $600 a year or less not coincidentally, the poorest country in Asia Afghanistan is also landlocked then there's the matter of natural resources natural resources like oil or precious metals can be real trouble and paradoxically poor countries tend to have them in spades these natural resources are what economists call intensifiers. They will help to make a country with good institutions richer but one with bad institutions get even poorer precipitating. What's called the resources trap so the Democratic Republic of the Congo is one of the world's most mineral rich countries holding most of the world's coltan which every mobile phone has a bit of inside but natural resource wealth helps elites to grab money without requiring the cooperation of the whole society if the only way to grow wealthy is to assemble high-tech aero engines. For example, you're going to need your whole society to buy into the project but if you just need to extract a few minerals. You can do so with a small labor force, some guns and an airstrip long enough to ferry. Your loot out to market the wealth from coltan keeps DRC armed rebels in guns and corrupts every level of society, so, how should one way up the relative importance of all these different factors institutional cultural and geographic in determining the wealth of nations. There's no hard and fast rules but as a guide, one can suggest that 50% of a nation's wealth comes down to the state of its institutions, 20 percent is due to its culture and 10 percent each can be allocated to latitude connectivity with the rest of the world.
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Regards @momimalhi
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