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The wretched of the earth

by Hans Dembowski
Paul Collier: The bottom billion. Why the poorest countries are failing and what can be done about it. Oxford University Press, 2007, 205 p., £ 16.99, ISBN 978-0-19-531145-7

This book deserves to be widely read. Paul Collier tackles pressing global issues, and comes up with convincing answers that challenge the conventional wisdom.

The professor at Oxford University argues that development cooperation should not be about helping the rest of the world catch up with the standards of life predominant in rich nations with approximately one billion people. As China, India as well as other Asian and some Latin American countries witness rapidly expanding economies, Collier states, the donor community should focus on the poorest countries, in which another billion people are living – the “bottom billion”.

These people, the former World Bank economist states, are being left behind; and if things go on as usual, their hardships and dissatisfactions increasingly will threaten security elsewhere. Collier therefore demands that the G8 make it their priority to do something about their plight.

Collier does not think only in terms of aid. He also tackles issues of trade and security. Perhaps one of his most important arguments is that domestic security forces are part of the problem, not the solution, in the first years after a civil war. The reason is simple: the people of a strife-torn society will initially consider any police or military force to be partisan; and as such bodies are re-armed, other former militias and gangs will make sure they can defend themselves. Collier therefore argues that international intervention should be planned for the long run from the outset, and that the stability outside forces can provide should be used to promote economic growth and fight abysmal poverty. High growth rates are feasible over many years, Collier states, as there is a lot to rebuild after a civil war.

Civil war is only one of the traps that can keep a country poor. Other traps Collier mentions include “being landlocked with bad neighbours”, “bad governance in small country” and “natural resources”, which tend to serve as breeding grounds for cleptocratic regimes.

On the base of economic success, Collier claims, new institutions can grow that will eventually make good governance, democracy and social inclusion possible. For that to happen, however, bottom-billion countries should enjoy special privileges in world trade. They need to be shielded not so much from the competition of the OECD nations, but from that of emerging markets like China and India.

Collier knows that outside intervention cannot turn a country around. But he insists that the donor community has not done a good job of supporting change once underway. The conventional wisdom is that technical cooperation is expensive but not very useful. Collier agrees that this is so in the case of countries that have successfully started to modernise. But he insists that the poorest countries need technical assistance in order to build capacities. Otherwise, they will never become able to promote progress and make good use of aid in cash. But doesn’t spending money on experts from OECD countries mean that funds flow back to the donor nations? Well, says Collier, that may actually be welcome as massive inflows of foreign currency are likely to push up any country’s exchange rate, undermining its export opportunities – which tend to be scarce for bottom-billion nations anyway. (dem)