Trade Slowly Erodes Global Poverty

By Edward Gresser

The Asian Market in Rockville, Maryland, has a pallet by the wall that is stacked six feet high with 25-kilo bags of Angkor Rice - a high-quality jasmine, stamped in blue with the iconic five-tower silhouette of Angkor Wat. Harvested this spring, it is part of Cambodia's first batch of rice sales to the United States since the 1960s.

Two miles away at the Home Depot's garden desk in Silver Spring, one can buy smaller bags of Niger seed, a top-end birdseed favored by finches and other songbirds, grown in the Ethiopian highlands as a staple crop for thousands of years and now harvested for American bird-lovers.

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Mundane stories of trade like these rarely draw much attention. But the humble bags of rice and birdseed deserve a space among the genuinely big developments of the new millennium. Such exports are the tangible evidence of one of the last decade's remarkable trends: the revival of the world's poorest countries, and a vast, little-noticed decline in poverty.

Ethiopia and Cambodia are charter members of a depressing club - the United Nations' list of "least developed countries," or LDCs. First published in 1971, this list now includes 49 LDCs: seven in Asia, 34 in sub-Saharan Africa, six Pacific island states, Haiti, and Yemen.

Countries make the list by meeting three qualifications. First, they have little money. Their per capita incomes average $905 or less - meaning in real terms, a farmer, hotel maid, or itinerant peddler supporting a family of five on $15 per day. Second, their people are often sick and mostly uneducated. LDC life expectancy is 59, a dozen years less than the world's average; in 2000 their primary-school graduation rates were half the world average. And third, with governments often disorganized or unable to offer help in emergencies, they are unusually vulnerable to economic upheaval and natural disasters.

These countries rarely get much of the world's attention, except during sensational crises. Only then do G-20 leaders hold meetings schedule meetings and high-minded rock stars and celebrities hold charity concerts - from George Harrison's 1971 Concert for Bangladesh through the 1985 Live Aid appeal for Ethiopia to Bono and Angelina Jolie today. Few experts expect lasting improvements. In fact, Paul Collier's justly celebrated 2007 book on their troubles, The Bottom Billion, closed on a typically pessimistic note:

"A billion people stuck in desperate conditions. ... Conflict, natural resources, being landlocked, and bad governance have kept these countries stagnant for forty years, and I do not see much reason for the next couple of decades to be any different."

His judgment had history behind it. Only three countries have escaped the UN's LDC list in the 40 years since its first edition. And they are anomalies: Two small island states, the Maldives and Cape Verde, got off by cultivating high-end beach tourism; Botswana did it by careful management of income from a huge diamond find.

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Edward Gresser is director of the Progressive Economy project at the GlobalWorks Foundation in Washington, DC.

Copyright © 2011 Yale Center for the Study of Globalization. YaleGlobal


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