A few years ago, I was sitting in an economics class and the professor was talking about how, right now, the only real difference between a developed country and and underdeveloped one was infrastructure. Well, if you have roads, a train system and the like, supplies will move faster and reduce the costs of building other infrastructures, giving out services, etc. Building lasting infrastructure takes time and expertise. Usually, this expertise, in “Third World” countries will come from the wealthier areas of the world, from people wanting to do charity work. This is a problem since, part of why infrastructure is so important in our economy is because it creates usually well paid jobs locally.
Now, from what I’ve seen, in a country like Haiti, two things may happen. One, as I said earlier, expertise comes from external sources and the money spent doesn’t really profit the country. Yes, in the end, the project is built and given to the government but, as we’ve seen with the current “stimulus spending” spree, this is only a small part of the benefit. The other possibility is that local talent does indeed get used. However, there is, probably due to the lack infrastructure, a very low amount of locally produced wealth. A lot of goods are imported, but, what’s even more interesting, a lot of the trade activity occurs outside of the country’s boundaries. Indeed, even in a country like the US where there is a large trade-deficit, wealth is still created by internal trading: people buying stuff from merchants in the US.
Maybe it is because of the culture, or maybe there is some other root cause but the Haitian “diaspora” sends a lot of goods back to their families and friends. This is an institutionalized system where you can go to a store that will take care of the whole transfer for you
This means that some of the imported goods are not only not made in Haiti, but produce a minimal amount of economic activity in the country. Now, these are just thoughts and might be totally off. If anyone has any other ideas, please pitch in. I find that this is an interesting discussion. Also, if you have trouble reading this in English, remember that you can copy any URL in Google translate for a rather fair translation. I already did it for French, so click here!
2 comments:
I guess one of your conclusions would be that the key is for the locals to have a larger share in infrastructure development. This is only possible, as you say, if there is enough expertise available within the country. This in turn depends on the development of education, one way or the other. So I think that once some basic amount of infrastructure has been established( by outside help or otherwise), the focus should be development of educational infrastructure. It may not be the quickest way for economical progress, but the long term benefits of this will be indispensable for the overall progress of any country.
An example would be the establishment of the Indian Institutes of Technology(IITs) in the 70's. It would've taken India 30 yrs after independence to realize the importance of indigenous technology, but today we see how much the IITs have helped us, directly and indirectly.
That's actually very intesresting... I have to check this out
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