Why is there poverty and lack of opportunities if there are lots of highly educated folks? I always believed education is the key to prosperity of a nation.
Unfortunately that is one of big myths that has kept a lot of Africa from developing. Western nations have focused too much on education. But what you end up with are highly educated people who simply move out of the country at first opportunity.
Capital and quality government is the key to development. Things like registering a business, getting permits e.g. cannot be too difficult.
Rich countries tend to be rich in large part due to capital. Capital existing in the form of extensive road and rail road networks. Quality harbors for ships. Power stations and power grids. All these things are very capital intensive and poor countries tend to have big problems with this.
Hard to run a business efficiently when you get power only parts of the day if at all, and there are no road connecting you to customers or markets.
The west has focused on improving education and health care and so that has perhaps been quite ahead of the standard of the infrastructure.
There's poverty because there isn't enough income, and there's lack of opportunity because there isn't enough capital? Education isn't magic and cannot substitute for a lack of money, and it only flourishes in a peaceful society with strong civic institutions.
Kenya was hit fairly hard by British colonialism, then (as so often) was a one-party state under a strongman for a long time, and is now dealing with a small Islamist insurgency. It's in the middle rank of African countries; it doesn't have the resource wealth of Nigeria, Angola or South Africa, but it's not a violent basket case like Somalia or Eritrea.
> There's poverty because there isn't enough income, and there's lack of opportunity because there isn't enough capital? Education isn't magic and cannot substitute for a lack of money
Why does it even matter where the money is today? Why can't they just provide their services over the Internet to get the money? They are doing this already as this very post suggests and should expand to other fields, less questionable fields in particular.
> it doesn't have the resource wealth of Nigeria, Angola or South Africa
Doesn't it? I suspect almost every country (in Africa especially) has a wealth of some resource, they just don't know it's there and don't have the technology to mine it. Perhaps the smart educated folks may discover it occasionally.
> Doesn't it? I suspect almost every country (in Africa especially) has a wealth of some resource, they just don't know it's there and don't have the technology to mine it. Perhaps the smart educated folks may discover it occasionally.
The problem is quality government. I live in Norway which is big on resources too and work with people who are geologists and do surveying. Norway is insanely expensive to do mining compared to Africa in terms of labor costs, environmental protection laws etc.
However many mining companies would still pick Norway over Africa. Why? Very stable high quality government. Mining requires large investments for years. You don't want to lose those investments because of civil war, or some dictator takes power, or a populists nationalize mine without compensation.
And even if an African country gets a mine, they run the risk of it not helping the country develop much. Because:
1) A western company may extract most of the wealth. In principle that could happen in Norway too, but Norwegian government will tax these companies far more. A western company can often squeeze poor African governments to get very low tax deals. Or they simply bribe officials.
2) Government corruption. There may be a lot of wealth, but it may end up in the pockets of corrupt officials who use it to buy foreign luxury products hence it benefits the local economy very little.
My point is that developing a country is a very complex task, because they tend to have a whole cocktail of problems that reinforce each other.
Often many approaches to solving these problems make matters worse. Zero tolerance towards corruption e.g. tends to make things worse. That allows corruption charges to be used selectively to imprison political opponents.
> There may be a lot of wealth, but it may end up in the pockets of corrupt officials who use it to buy foreign luxury products
That's what came into my mind an hour ago: it probably is easy to inhibit corruption in developing countries if every developed country would ban their citizens from purchasing luxury and making huge investments abroad. E.g. if a Kenyan or a Russian citizen (let alone an official/politician) wants to buy a humble middle-class living or start a small business in the EU/US/UK/etc - that's Ok but as soon as they try to buy a luxury penthouse, a castle or otherwise invest money which exceeds their country richest city median annual wage by an order or magnitude or more - this transaction should be blocked and investigated.
That's a bit "run before you can walk"; most places are only just putting in the required beneficial owner rules in order to know that an e.g. Cayman Islands limited company isn't a front for someone on the US proscribed persons list, let alone that they're taking bribes in Kenya.
There is a tremendous paper that takes advantage of the fact that a lot of debt is public in its amount but not owners to quantify the "missing trillions". The global sums of "amount owed to me" and "amount owed by me" should sum to zero, but there's a huge gap. That's money owed (bonds) to the invisible rich.
I don't think you can solve these problems with a stick. Quite the contrary I think that is part of the problem.
The more laws and rules you enact, the more laws and rules you see people ignore and break. This just undermines totally respect for law and order.
I believe in what economist Hernando de Soto has said about laws: Laws are discovered not made.
You need to align laws with what is actually acceptable in your country at the moment. You cannot escape into a rosy Utopia where your underdeveloped country is going to somehow emulate a rich well developed democracy over night, by enacting the same laws.
How a country works, and its laws are two different things. On paper Russia is an amazing democracy. In practice not so much.
I see developing trust and confidence in the laws of the land is the most important thing you can do. For that to happen I think you simply need to legalize a lot of the crimes everybody does.
Once you get people to actually respect and follow the laws you have, you gradually start tightening those laws. You gradually try to nudge people towards better behavior.
Transparency is more important than strict laws IMHO. If e.g. a particular government official takes a $5 bribe for every application, then make it public and legal. Post a note that says you pay him or her $5 for the application.
You know that fees where originally illegal bribes?
You need infrastructure. You need petrol/oil to power the machines to build the roads so you can build the electricity to be able to build the internet connectivity that you need.
The nations are wealthy but if the profits are siphoned off by both corruption and the international companies that own the mines, then the citizens don't see any of that money trickle down to them.
In these countries the educated leave very quickly unless they're employed by any of the above.
A lot of folks in third world nations focus on academics to escape corrupt and dysfunctional governments. Also working hard at academics ensures you have a better chance of getting a job and providing for yourself somehow. There is no social support as a safety line.
The first time I heard about a concept called "unemployment insurance", I was utterly flabbergasted! I thought it was a joke!
Kenya is actually fairly rich and democratic. There is definitely opportinity there. If I had to bet by gut-feel, I'd say prosperity on the African continent will start from there.
There is always a huge and easy-to-implement potential for stagnation and regular regressions, let alone for hard and long work before actual progress happens. Look at Russia - it also is fairly rich and democratic (as compared many other countries, although hardly an example of democracy in itself) yet you can hardly observe much prosperity (but for a small selection of people) starting there. African prosperity may start in Kenya but this will probably take at least 100 years.
The nature of corruption probably matters. Corruption is quite high in China e.g. yet it still develops very quickly. Some quite rich countries like Italy are quite corrupt but still kind of manage.
I suspect the devil is in the details. Certain forms of corruption is likely more corrosive than others.
It depends on deliverables and execution. No one truly cares if someone's family took a small cut of the project expenses, if the project was executed and delivered according to spec on time.
In China, failing execution would result in head-chopping. Problem in most third-world nations is drinking down all the money and delivering little-to-nothing.
With poor governance, there can only be opportunities for corruption and theft of government resources and not for improving the lives of citizens.
In Kenya, those in government steal and invest that money in real estate, building malls and posh estates that don't help the normal citizens in any way. If those were invested in startups then the story would be different
