Monday, March 3, 2008

Collier on the bottom billion at the TED

What can we do to help the bottom billion? Prof. Paul Collier says, "a combination of compassion and enlightened self interest." More here.

Why compassion? Because the bottom billion are deprived of credible hope

Why enlightened self interest? Because economic divergence plus global integration would be "a nightmare for our children."

I have been particularly interested in Collier's work after reading his book The Bottom Billion. It is so simple, rich, and amazing with all the historical roots to the miseries of Africa and the present day bad governance designed by bad leaders- there are too many traps in Africa! I wish these simple ideas were translated into action in Africa. Also check out the Center for the Study of African Economies, which produces The Journal of African Economies.

...“It requires compassion to get ourselves started, and enlightened self-interest to get serious.”

...What happened the last time we got serious? Well, it was the reconstruction of Europe after WWII via the Marshall Plan. Why did the US get serious? We were worried about the spread of Communism. So what did we do?

...There’s a huge natural resource boom taking place - Uganda and Ghana have both discovered oil, and Guinea has a huge discovery of iron. “These new revenue flows dwarf aid.” In Angola, new oil revenues are $50 billion a year - total aid flows to the bottom billion nations is $34 billion a year.

“If your governance is good enough, there’s no resource boom.” That’s happened in places like Norway, Australia, and Canada. “The resource curse is entirely confined to a threshold of governance.” Nigeria is a great example of what can go wrong if you don’t have enough governance. You need a level of governance around where Portugal was in the 1980s. democracies don’t have these checks and balances - they’re “instant democracies”.

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