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Problems of the Poorest People, Capital Flight, and Migration Essay


Introduction

Globalisation is probably on of the most controversial issues in the world history: many people find it as an amazing possibility to achieve success and make use of a number of opportunities, still, some people, for example the citizens of South Africa, suffer a lot because of inabilities to solve their problems and eliminate poverty that decreases the level of human lives considerably.

There are many writers and researchers like Dicken (2007) or Ravenhill (2008) who investigate the economic perspective of globalisation, however, not all of them manage to discuss the chosen issue in a proper way.

In this paper, the work by a famous British professor, Paul Collier, will be evaluated in order to prove that the poorest billion of people have already integrated into the world economy by means of capital flight and migration, still, the outcomes of such integration are not as successful as they are in the countries like the USA or China.

The Bottom Billion: Why the Poorest Countries Are Falling and What Can Be Done about It is the book where the author evaluates the level of developmental aid offered to the developing countries like Africa and underline the advantages and disadvantages of the process of globalisation.

Africa has bad governance, one of the four traps defined by Collier in the book, that is not ready to use the full potential of the country. This is why the citizens of South Africa have to make use of capital flight and migration in order to continue developing and becoming a recognisable country on the world’s arena.

Collier’s attempt to discuss the difficulties existed in developing countries is powerful indeed; poverty is the challenge that has to be overcome by the Africans by means of proper understanding of the main ideas of globalisation, four traps which are dangerous for the country, and the possible instruments like capital flight or migration, which may be used to overcome poverty and find another way to success.

Poverty as the problem to be solved

Poverty is the challenge that not all nations are able to overcome. Sachs (2005, p. 10) admits that even if some countries like China or Canada are lucky enough to overcome poverty and stabilize citizens’ lives, it does not mean that poverty will never influence human lives again or create some new risks for human survival.

It is wrong to believe that poverty may be completely illuminated from human lives, and in order to succeed in development, people have to understand the main reasons of poverty and the conditions under this problem may appear again.

However, there are a number of countries where poverty is not that huge problem anymore; China, Canada, the USA are the best examples of such countries. Collier explains that even such developing countries like Africa are able to create a certain paradigm by means of which people can shift away poverty and set new goals to be developed.

Acemoglu and Robinson (2006) discover that “the European presence in South Africa began in 1652 when the Dutch East Indian company founded a colony in Table Bay” (p. 10). It was a kind of the starting point after which the country was not able to control the activities which took place on its land, and the Africans could help but fighting poor conditions of living.

Types of traps for people

In order to understand how poorest people may integrate in the world economy through capital flight and migration, Collier offers to define poverty as not the only trap which the countries may fall into. What he suggests is to pay more attention to the four types of traps which are dangerous for different countries.

These traps are the conflict trap, the natural resource trap, the bad governance trap, and the landlocked with bad neighbours trap (Collier 2007, p. 5). The author underlines that poverty cannot be intrinsically a trap as much more countries remain to be poor; this is why Lesotho, Botswana, and other countries in the South Africa still get a chance to overcome this challenge in case they clearly identify what else may lead to poverty.

The citizens of South Africa are actually in several traps at the same time, still, the most terrible trap for the country is the one of bad governance. In a number of small countries, governance plays a very important role in promoting economic development. However, it happens that small governments are usually eager to achieve some personal benefits and decide to corrupt or choose some bad policies.

This is why it is hard to understand how economic development may occur under such conditions. It is necessary to admit that South Africa as well as the rest of the countries on the continent is characterized by impressive workforce that may be developed along with the coast. Unfortunately, the government of the country does find it beneficial to make use of natural sources but rely on aid-flows which may be received from different developed countries.

The bad governance trap is not the only one that exposes to danger the whole country. Collier says that the landlocked with bad neighbours trap may also challenge the country. Most African countries have to be geared to the world market or be enclosed. And even if some countries have appropriate geographic location, its citizens are not able to benefit from this natural gift.

For example, African economies are more inward looking, this is why when the time to increase its neighbour comes, the vast majority of Central African countries which are far from the coast do not have enough sources to take the step required and the countries suffer because of such landlocked trap.

Switzerland is another example of a landlocked country; still, it continues advantaging from cooperating with Germany and Italy in the market sphere. Though the natural resource trap is not as dangerous for Africa as for other billion countries, the government cannot find practical application to the already defined sources. This is why even this trap may become dangerous for the country under consideration.

The last trap that plays a crucial role in economic development in Africa is connected to the conflicts which are inherent to the country. Brett (2008) mentions that during the 1970s, post-colonial Africa overcame the economic crisis that was based on the “intense conflict over political control and resource allocation, and a shift to military or authoritarian rule” (p. 340).

The possibility to escape the traps

The peculiar feature of the book introduced by Collier is that the author does not lose hope to improve the economic conditions in billion poorest countries and does offer a number of ideas of how and when the country should start its development.

The examples of how African countries may be developed are observed in the successful development of Botswana that “had the highest rate of per-capita growth of any country in the world in the last 35 years” (Acemoglu, Johnson, & Robinson 2003, p. 90) and the promotion of the ECOWAS (Economic Community of West African States) that aims at promoting economic integration in different fields which may be improved by means of hard work, desire, and properly defined intentions (ECOWAS in Brief 2010, para. 1).

In fact, all of the billion countries defined in the Collier’s book usually fall into several traps identified earlier, however, all of them have a chance to escape the traps in case a number of steps are taken in time. The history shows that some African countries like Botswana have already succeeded in economic development, and the vast majority of success dated before the process of globalisation covers the whole world. Globalisation is regarded as an influential factor that has to be considered by countries (O’Brein & Williams 2004).

For the vast majority of South and Central African countries, globalisation is not an advantage; it is a challenge that has to be defined and certain actions should be taken to overcome it within a short period of time. Even the new offered escapees in the form of capital flight, migration, and international trade undergo a certain impact of globalisation due to which these escapes take a wrong turn.

Globalisation has two different sides: on the one hand, this process creates a number of perspectives and comfortable conditions to be used in economic development, however, South and Central African countries do not observe these improvements being trapped by bad governance or landlocked with bad neighbours; on the other hand, globalisation also aims at making many things harder than they are and not all countries are ready to comprehend the standards and requirements which are set, this is why this process becomes one of the most serious disadvantages for the citizens of Central Africa.

It countries should understand within a short period of time that it is more preferable to use labour and neglect the use of land due to fast-developing manufacturers. Still, Collier (2007, p. 84) says that the bottom billion has missed the boat that could successfully carry them through the process of globalisation as they did not have enough agglomerations and did have low wages.

Capital flight and migration as a chance for people to integrate into the world economy

Easterly (2001, p. 59) notices that economists believe that such countries like African face a number of economic challenges, still, people do not want to be involved into the things which go wrongly. Globalisation influence on the bottom billion through capital flows is different than in developed countries. The point is that capital flows which are bigger than others do not go to the countries which are challenged a lot and shot of the necessary capital.

In other words, the vast majority of capital flows bypass the vast majority of African countries which are in financial or investment need. Economies are short of capital in the country, but governance fails to understand why the separation of capital into private and public is crucial for the citizens. A number of attempts have been made to rescue Africa from its destiny during the second half of the 2000s, but Callinicos (2009) underlines the truth that colonial mascaras cannot be stopped.

Collier points out that migration and capital flight are the two powerful means which could be used to help the bottom billion to integrate the world economy, still, both of them are used in a wrong direction. Capital flight is based on the illegal activities which occur with the capital flow.

Government does not take appropriate care of private capital that is usually responsible for delivery of equipment for workers; what the representatives of the government do is promotion of public capital that promotes the development of infrastructures which are also important still not as effective for workers as the possibilities connected to the private capital. Statistics shows that nowadays African public capital is twice as African private capital.

Without any doubts, the bottom billion has already integrated into the economy by means of capital flight, however, corruption and numerous illegal activities prevent successful development of the country. This is why it is still rather a doubtful question whether the idea to use capital flight as the only possibility to integrate into the economy because the control organised by the government is not as strict and coherent as it should be.

Migration is another important aspect in the integration process. In spite of the fact that African economies are considerably improved by foreign aid as stated by Easterly (2006, p.290) and Hausmann, Pritchett, and Rodrik (2005, p. 307), this help is not always enough to overcome the poverty trap that is spread over the country.

In comparison to other successfully developed projects like the Bretton Woods Project that aims at improving justice and equity in society (“What Is the Bretton Woods Project” 2010) or the World Development Movement that is organised in the United Kingdom in order to provide anti-poverty campaigns (“About the World Development Movement” n.d.), the ideas which are implemented in the bottom billion are not as successful as they could be regarding a huge potential of the country.

Many people have to migrate in order to find more appropriate conditions for living and benefit from the possibilities offered by more prosperous countries.

Certain attention to the gender issue of migration should be paid. Women are frequently identified as victims of economic restructuring, and gender analysis developed by Beneria (2003) helps to understand that social goals and a number of collective needs may be considered as a starting point for migration in Africa. Many women involved into the sphere of caregiving get chances to leave the country and find more appropriate working place in the developed country.

This is why respect of different social groups and self-esteem are the factors by means of which migration is spread. Still, even now, when globalisation is used as an effective means to success, it is hard to integrate women into the existing policies and practices with the help of which women may get the same possibilities as men (Pearson & Jackson 1998, p. 2).

In addition to the gender issue, some problems appear as a result of educated people’s migration. From this perspective, migration is identified as the safety valve for people who are eager to improve their financial positions. Collier (2007) introduces education as a type of wealth that in comparison to capital flight is wrongly used by the government. People do not evaluate properly their possibilities and make a decision to leave the country within a short period of time to get some benefits as a result of migration.

Conclusion

In general, the idea offered by Paul Collier in his work The Bottom Billion: Why the Poorest Countries Are Falling and What Can Be Done about It that the poorest people in the world have managed to integrate the economy by means of capital flight and migration makes sense.

Still, even the author admits that the steps taken are of wrong direction. In spite of the fact that the Africans as well as other from the bottom billion get a chance to improve their living conditions and benefit from globalisation, bad governance is still considered to be a serious trap that makes the vast majority of population suffer.

Collier proves that the poorest bottom billion has a chance to improve living conditions and integrate successfully into the world economy without losses and negative outcomes which are usually based on the bad governance trap or the conflict trap which are inherent to the vast majority of African countries.

Reference List

About the World Development Movement, (n.d.). [online]. World Development Movement. Web.

Acemoglu, D & Robinson, J 2006, Economic origins of dictatorship and democracy. Cambridge University Press, New York.

Acemoglu, D, Johnson, S, & Robinson, JA 2003, ‘An African success story: Botswana’. Chapter 4 in 14 in D. Rodrick (ed) In search of prosperity: Analytical narratives on economic growth. Princeton University Press, Princeton. pp. 80-119.

Beneria, L 2003, Gender, development and globalization: Economics as if people mattered. Routledge, New York.

Brett, EA 2008, ‘State failure and success in Uganda and Zimbabwe: The logic of political decay and reconstruction in Africa’, Journal of Development Studies, vol. 44, pp. 339-364.

Callinicos, A 2009, Imperialism and global political economy. Polity Press, Cambridge.

Collier, P 2007, The bottom billion: Why the poorest countries are falling and what can be done about it. Oxford University Press, Oxford.

Dicken, P 2007, Global shift: Mapping the changing contours of the world economy. Sage, London.

Easterly, W 2001, Elusive quest for growth. MIT Press, Cambridge.

Easterly, W 2006, ‘Reliving the 1950s: The big push, poverty traps and take-offs in economic development’, Journal of Economic Growth, vol. 11, pp. 289-318.

ECOWAS in Brief, (2002). [online]. Discover ECOWAS. Web.

Hausmann, R, Pritchett, L, & Rodrik, D 2005, ‘Growth accelerations’, Journal of Economic Growth, vol. 10, pp. 303-329.

O’Brein, R & Williams, M 2004, Global political economy: Evolution and dynamics. Palgrave Macmillan, Houndmills.

Pearson, R & Jackson, C 1998, Feminist visions of development: Gender analysis and policy. Routledge, New York.

Ravenhill, W 2008, Global political economy. Oxford University Press, Oxford.

Sachs, K 2005, The end of poverty. Penguin, New York.

What is the Bretton Woods Project, (2010). [online]. Bretton Woods Project. Web.

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Downs, A. (2019, July 4). Problems of the Poorest People, Capital Flight, and Migration [Blog post]. Retrieved from https://ivypanda.com/essays/problems-of-the-poorest-people-capital-flight-and-migration/

Work Cited

Downs, Aliana. "Problems of the Poorest People, Capital Flight, and Migration." IvyPanda, 4 July 2019, ivypanda.com/essays/problems-of-the-poorest-people-capital-flight-and-migration/.

1. Aliana Downs. "Problems of the Poorest People, Capital Flight, and Migration." IvyPanda (blog), July 4, 2019. https://ivypanda.com/essays/problems-of-the-poorest-people-capital-flight-and-migration/.


Bibliography


Downs, Aliana. "Problems of the Poorest People, Capital Flight, and Migration." IvyPanda (blog), July 4, 2019. https://ivypanda.com/essays/problems-of-the-poorest-people-capital-flight-and-migration/.

References

Downs, Aliana. 2019. "Problems of the Poorest People, Capital Flight, and Migration." IvyPanda (blog), July 4, 2019. https://ivypanda.com/essays/problems-of-the-poorest-people-capital-flight-and-migration/.

References

Downs, A. (2019) 'Problems of the Poorest People, Capital Flight, and Migration'. IvyPanda, 4 July.

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