"Globalization To The Rescue!!!"

Collier's view of the problems and needs of the bottom billion are clearly based on the belief that the problem of development is one of economics. The basic theme throughout the book is that "Growth is good for the poor."

Collier notes that he has been criticized in the past for stating that the major problem for the bottom billion is that they have not grown; in The Bottom Billion, Collier asserts that this lack of growth should be the major concern of development and at the core of all development projects.

Because of this economic approach to the problem, one might expect Collier to wholeheartedly embrace the concept of globalization; surprisingly, he does not.

Collier is not opposed to globalization and he believes that overall the trend towards open world markets is desirable and good.

Globalization has been highly beneficial to developed and developing countries; but has a negative outcome for the 50 or so failing states.

Collier writes that globalization effects economies on three levels:

1. trade in goods
2. flows of capital
3. migration of people

When globalization functions in a beneficial manner, all of these categories will be strengthened; in the bottom billion, these categories prove to be sources of problems and failures.

1. trade in goods: during the 1980s when developing countries began to break into the world markets, Africa was largely left out of the economic windfall. a number of different issues contributed to this exclusion, but the major problem was related to bad governance and policies; firms were less likely to invest in countries with rampant corruption and unstable political situations. the bottom billion "missed the boat" in effect and are now unable to compete with the low-cost, low-risk (stability wise) markets of the Asian countries, most notably, China. china now has begun to turn to some of these failing states in the search for natural resources and a new wave of resource traps are being set.
2. flows of capital: capital flows out of the bottom billion. according to Collier, Africa has twice as much public capital as private; this means that they have more aid $$$ than investment $$$. this system is counter-productive because private capital is needed to start businesses, create jobs and spur growth. large companies do not invest in the bottom billion, aid $$$ are not invested in the bottom billion and large amounts of private wealth are moved out by citizens of the bottom billion who fear that the political instability of these nations will cause them to lose their wealth.
3. migration of people: those who can leave a failing nation will do so. those who cannot, will not. this means that as time goes on, the best and brightest will leave and those with less ability and opportunity will remain. remember that one of the conditions for turnaround in a stalled nation is to have a "critical mass" of educated citizens who will be able to demand and respond to changes. as the people most able to effect and sustain change leave, the situation of those left behind will deteriorate.

Collier goes even further to state that were a country able to break free from the aforementioned traps, they would be faced with an inability to compete in a world market dominated by the cheap labor and mass production of the Asian countries. They would, in effect be in a type of limbo; poised to take-off, but held back by a lack of opportunity and means.