Introduction
The Bottom Billion is a short book that addresses contemporary issues in the world today. Collier looks at the main problems causing Poverty in Africa. He contends the traditional definitions of underdeveloped, developing and developed countries. According to the author, poverty is only a fifty eighty countries. To resolve the problems in the third world countries whose inhabitants make up the bottom million, countries should resolve corruption, improve infrastructure and governance practices. He argues against the imposition of radical changes by the developed countries on the third world countries. Collier focuses on the problem facing the African countries and relates them to globalization.
Economic globalization can be described as a rapidly growing integration of countries on an economic scale (Dollar & Collier, 2002). The left wing opponents are those who argue against economic globalization. Arguments put forward against globalization by arguing that it has led to massive loss of jobs due to production shifts. Workers in the developing countries are not well paid. It is leading to the dominance of the developed countries and increasing the difference between poor and rich economies. The right wing supports are those who argue for globalization. Supporters argue that globalization raises the living standards through offering employment opportunities. It avails a wide range of products from which consumers can choose from. It has led to the growth and expansion of many economies in the world. He takes a middle ground on the issue of globalization. He is of the view that Africa can benefit from globalization, on the other hand, some of the problems Africa is facing have been caused by globalization. According to Collier, globalization can solve some of the problems in Africa is facing such as scarcity of capital. He goes ahead to point out some of the problems in Africa is facing have been caused by globalization. Globalization has led to massive draining of educated pool, as well as, creating a barrier to entry into the global market. In addition, some countries are trapped in conflicts and poor governance making it difficult to integrate in the global market. To benefit from globalization, the bottom billion, must embrace good governance.
Analysis
Paul lays the foundation of his arguments by diving Africa into three sections based on the resource endowment; natural resource endowed economies, coastal economies, and landlocked countries. He argues that the natural resource economies are part of globalization through trade and foreign investment regardless of their domestic policies. On the other hand, countries that are landlocked and without resources are not integrated in globalization even when their domestic policies are favourable. Therefore, most of the landlocked countries remain poor.
Violent conflict and civil wars have led to the failure to diversify. Africa has many countries characterized by low incomes, low economic growth, over dependence on foreign aid and dependence on natural resources. Paul points out that a low income country has a greater chance of falling into civil war. A civil war destroys the development of a nation. In addition, it affects the economy of neighbouring countries. Foreign investment is discouraged in these countries making it hard for countries to participate in international trade.
Most countries in Africa are poorly governed Corruption is rampant, and this has contributed to lower economic growth experienced in most countries. Collier does not focus on the issue of poor governance. According to him, Bangladesh achieved economic growth even in the face of corruption. However, Poor governance is the cause of most problems Africa faces. Poverty and conflict are all consequences of poor governance (White, Killick, & Mugerwa, 2001). The biggest problem with governance in Africa is that the government acts as a hindrance to economic development. Most leaders do not have the will to implement policies that have been set out. Poor governance hinders countries that are endowed with resources for integrating in the global market.
Inadequate capital inflow hinders the bottom billion from globalization. Paul uses the current trends to support this argument. China is a major economy in the world today, and it is recording a high rate of capital inflow. On the other hand, scarce capital nations are not attracting capital inflows. The countries are short of capital. The public capital is used to improve on infrastructure, provide medical care and other societal needs (Collier, The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It, 2007). The funds cannot be invested in the manufacturing industry. This is the reason most Africa’s natural resources have not been exploited (Goldin & Reinert, 2012). In addition, it lacks the capital to purchase equipment and pay workers hence it cannot be involved in manufacturing. The bottom billion exports raw materials and import manufactured goods and thus adversely affect the economies of these countries. Most private investors invest in developed countries such as China. Poor governance and conflicts increase the risk of investing in such economies. Globalization is one of the solutions to scarcity of capital in Africa. Availability of cheap labour is attracting investors. To cut on production cost, investors are shifting production to Africa.
Private capital outflows also affect Africa participation in the global market. First the bottom line imports more products than they export. The imports are manufactured hence are of more value than the exports which are mainly composed of raw materials. Most wealthy Africans deposit their money in foreign banks outside their countries. According to Paul, 30% of Africa’s wealth by 1930 was held abroad. Corruption is a major cause of the capital flight. Those involved in corruption deposited their money in foreign banks to do away with evidence of being involved in fraudulent activities. The other cause of capital flights is the fact that the countries were already trapped in conflict and poverty. Capital flight was a response to traps. The people are discouraged from investing in such economies and prefer holding their wealth abroad. Today, Africans are investing in their countries. Africans living abroad are investing in the local markets. Capital flight has reduced considerably.
Migration is also limiting Africa’s chances of integrating in the global market. Paul argues that through migration Africa is losing the educated people. Educated people are migrating in search for employment and better living standards. In Somali for instance, most of the educated people have moved to the US. The uneducated are aware that they cannot get jobs in developing countries thus left behind. The draining of the educated force is making it hard for the bottom five to get out of the traps of bad governance.
Globalization has led to the increase in difference in income between the rich and the poor countries. The developed countries have already taken a position in the global market creating preventing the bottom billion from diversified markets for exports (World Bank Policy Research Report, 2002). Some countries have broken out of the traps but have failed to secure a position in the global market. They fail to attract private investment while citizens continue to hold a wealth in foreign countries. Paul leaves fails to identify the uniqueness of some products exported by African countries. Even though developed countries have created barriers to entry, Africa exports important products such as gold making it significant in the global market. China for instance has invested in African countries. Moreover, some foreign investors are involved in mining resources in some African countries.
Globalization has led to massive draining of the bottom million skilled workforces. Most of the people are moving to developed countries in search for employment. The countries are faced with inadequate skilled labour force. The educated people can also help the country get out of the bad governance trap. As a result of globalization, the bottom billion countries continue being trapped in conflict and poor governance due to the draining of educated pool.
The bottom line is, to benefit from globalization, the countries must break the traps of conflicts, poor governance, natural resource and landlocked. The countries should embrace good governance to attract investors. Some African countries such as Ghana have started improving on their governance system
Collier does not support financial aids as a means of improving the economies of the African countries. According to him most of the aid does not serve the intended purpose instead; it is pocketed by some few people. He is of the view that they should be given technical assistance (Zuckerman, 2008). However, this is not a good solution to the problems Africa is facing. The technical trainers will be from western countries and may fail to understand the dynamics of Africa. In addition, Africa needs to stop the draining of educated pool, it does not need any technical trainers to improve on its human resources. In addition, not all the foreign aid is misused as Paul implies, some countries use foreign aid to improve on health care services, as well as, improve infrastructure.
Paul champions for external military intervention (Collier, 2003). To break from the conflict trap Africa needs the intervention of external military. According to Paul, military intervention will get the poor nations towards the path of development. He analyses the British intervention in Sierra Leone and concludes that the benefits of ending the civil war are more than the cost of intervention. Military intervention can lead to the end of a civil war. There is a need to deal with the cause of the civil war. To avoid conflicts, African countries should address the problems facing them. They should ensure that there is an equal distribution of resources (Mutwol, 2009). African countries should also come up with a good justice system to ensure that the perpetrators of conflicts are put to justice. Some of the conflicts are caused by a difference in ethnicity hence African s should learn to embrace other people’s culture.
Conclusion
The Bottom Million explores the concept of globalization and brings in new ideas. Paul explains why poor countries have failed to integrate in the global market. African countries are endowed with resources, but traps of conflict and poor governance has reduced its chances of successfully participate in trade. Moreover, the countries are capital scarce. The capital inflows are not adequate. Most of the public capital is used to improve infrastructure. Globalization has led to draining of educated pool from poor countries. The countries are left without a skilled workforce making it hard to break out of the traps. In addition, the developed countries have already established a position in the market creating a barrier to entry. To solve major problems in Africa, good governance must be embraced. Paul champions for military intervention to break from conflict trap. He is against the foreign aid instead; he suggests the use of technical assistance.
Africa is endowed with various resources such as gold. This makes it very important in the international market. The main problem faced in Africa is poor governance. It has caused poverty, mismanagement of natural resources, and conflicts. Africa does not need technical assistance or military intervention to break from the traps. Good leaders who have the political will is all Africa requires to successfully integrate into the global market.
References
Collier, P. (2003). Africa and Globalization. Yale , 1-17.
Collier, P. (2007). The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It. New York: Oxford University Press, .
Dollar, D., & Collier, P. ( 2002). Globalization, Growth, and Poverty: Building an Inclusive World Economy. New York: World Bank Publications,.
Goldin, I., & Reinert, K. (2012). Globalization for Development: Meeting New Challenges. United kingdom: Oxford University Press.
Mutwol, J. (2009). Peace Agreements and Civil Wars in Africa: Insurgent Motivations, State Responses, and Third-party Peacemaking in Liberia, Rwanda, and Sierra Leone. New York: Cambria Press.
White, H., Killick, T., & Mugerwa, S. K. ( 2001). African Poverty at the Millennium: Causes, Complexities, and Challenges. New York: World Bank Publications.
World Bank Policy Research Report. (2002). Globalization, Growth and Poverty. SEEJE , 1-7.
Zuckerman, E. (2008, March 13). “Book review: “The Bottom Billion” by Paul Collier” . Retrieved November 11, 2013, from http://www.ethanzuckerman.com/blog/2008/03/13/book-review-the-bottom-billion-by-paul-collier/
