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Jaime Mogollón Michilot

Economic Student,

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How we can reduce poverty and inequality in developing countries?

I'm from Peru. A developing country. We are having a good perfomance in our economy, but we have to face a non resolved problem. One to 3 peruvians live on poverty conditions (see the link for wikipedia information bit.ly/17qs4Rw) .
How we can face this problem?

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    Sep 30 2013: We, in the developed world, are absolutely tied to this problem. First colonialization / slavery @#$% the balance of the world. Next, we have elected leaders and created a value system, which put economic growth above everything (though, economic growth for us). It is illusory that "everyone" benefits (i.e. when factory jobs that didn't exist, suddenly do in poorer countries). Poor governments sell their land rights and low ball their labourers in order to participate. And because they lay down for us, we effectively ghetto-ize these countries and make them our #$%^. It takes them years / generations to recover from the health, environmental impacts that industry has on their part of the world.

    We in the West need to stop taking (by way of consuming needlessly and incurring bad debts in order to do it) and start giving: our expertise, our compensation for ravaged land and people, our teachers, our scholarships.
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      Oct 1 2013: For anyone interested in a modicum of truth, the facts do not support this meme.

      This is economic illiteracy, to be exact it is willful ignorance of comparative advantage.
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        Oct 1 2013: Willful ignorance? People who have a selective filter for the primacy of economics over the environment, justice and equality have willful ignorance, Mr. Gilbert.

        In many cases, the comparative advantage isn't a natural occurrence a la perfect free market (btw, has there EVER been one?), but a forced situation by the heavier hand (i.e. developed countries). Countries like the US and ones in Europe need to have strong armed tactics to get their way around world markets:

        In the case of the World Bank lending money to Jamaica the "comparative advantage" of Ecuadorian bananas was forced onto Kingston's markets while their own rot on their trees; dairy farmers had to drain their milk tanks because US mid-western milk had to be favoured according to the lending rules.

        Large pharmaceutical companies bemoan the ability of Brazil, China and India to make generic drugs out of their newly patented ones fresh out of clinical trails. The companies have had to cut deals with these companies first in order to make any kind of net gain out of the situation, which usually turns into patent-protection lawsuits that drag on for more years than the marketability of the drug. How would you describe submitting to comparative advantage in this case? It's messy.

        And Peter Eigen, who quit the World Bank as its director in Kenya, describes the asymmetry between the developed and developing countries doing "business". Rampant corruption, collusion in unprotected, unregulated environments happened all the time. $300 million projects to be paid to European engineering firms, financing firms, insurance agencies etc. had no use, no economic benefits, no clients, but were hugely destructive were ushered through first. The less lucrative social projects never got through. It was large scale corruption. Bribery was routinely paid to win the privilege to do these lucrative projects. Private profits, public losses http://www.ted.com/talks/peter_eigen_how_to_expose_the_corrupt.html
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          Oct 1 2013: Yes willful ignorance.

          The World Bank does not have anything to do with comparative advantage, nor does the cronyism you mention

          The reason the economy exists at all or has raised the standard of living from hunter gatherer is comparative advantage.

          This is why 10 years ago the per capita annual income in China was $500, is today north of $7000, this has been going on since the beginning of trade.
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        Oct 1 2013: $7000, but at what uncalculated cost to its environment and health of its people? Have you ever been hospitalized for respiratory problems due to working in China? I have! Top coal mine deaths in the world to fuel this pace of growth. And how strange that it has to artificially manipulate the value of its exchange rate and even lend money to its top consumer in order to buy its comparatively advantageously made goods! A loan that isn't going to get repaid, btw.

        In a simpler society; in economic theory's vacuous illustrations, yes, comparative advantage has a logic to it.

        Well, you go tell the Jamaicans and people from the other 140 some odd countries that have had to deal with the repayment terms (and corruption, see above) of the World Bank, that the World Bank has nothing to do with their comparative advantage.

        Economics by now is a nasty mess of factors. Speaking about its parts as if each might somehow work in isolation of anything else is willfully ignorant.
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          Oct 1 2013: I don't know but likely higher than without the technology.

          Yup there are financial shenanigans with the Chinese government.

          Again the world bank has nothing to do with comparative advantage.

          It is it's own dynamic which is a good thing because it side steps politics and know besters.

          To the question of the OP it is clearly the answer to poverty. Nothing else has done any good, despite your conjecture to the contrary.
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          Oct 1 2013: Well Said Genevieve, I support your points.
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          Oct 1 2013: Kuldeep

          So you both subsribe to a similiar religion...

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