The Poverty of Nations

What started off as yet another random conversation about the system we live in ended up in arousing an interest in me to actually work for the World Bank and somehow eradicate unbalanced growth in today’s global economy…. Someday…..

The gist of the conversation I had with a haut Muslim blogger starts off like this….

Based on this movie, where it questions the current banking system which lends money to burrowers and expects an interest on the capital we can effectively say that if an amount X is injected into the system an amount X+ Interest is demanded back from it, (Think circular flow of money) meaning if the global economy is looked at in its entirety an amount is demanded back from it which previously did not exist. From where does the extra money come from??

You guessed it; the only way is for individual burrowers or beneficiaries of this financial system to pay back Capital plus interest is to take from the others to pay off their own debt. This system guarantees that some will default, foreclosures are a given and the players who know to play the system best wins. The rules of the game are created in the form of economic policy where one country maneuvers its way to prosperity at the cost of another. How well you know to play this system called capitalism will determine how rich you become. This is why continental Africa will almost never prosper, the current world order does not see itself benefitting by helping the continent boom. Instead it ravages its resources in such a way that maximum benefits are bestowed upon its own economies.

The bottom line is, some will be better at this game than others. This creates what the World Bank calls ‘’Unbalanced Growth’’. They even try to eradicate it I’ve learnt. As sad it seems entities like the World Bank and the IMF play a huge role in shaping the global economic landscape. Maybe there will be room for couple more economists who want to work towards the betterment of LDC’s.

From a macro level, economic policy and implementation will determine the injections and leakages of each individual country and the structure of it, either benefitting the country or being detrimental to it. At a micro level it gets even more interesting, corporations reap profits at the cost of consumers driven by greed who default on their mortgage payments or credit card bills. Is this not a system, capitalism…. Which ensures some will succeed and others will surely fail??

While my fellow blogger was more intent on finding a solution to this system and creating a better world, I have to admit I was more interested in mastering the system in its current form. However, working towards eradicating the inefficiencies of this system as a World Bank or IMF employee globe trotting across exotic countries does appeal to me…. Hhmm…