A Thought on Global Poverty -- and Curing It

Hmmmmmm.

I like this observation:

The solution to being poor is getting rich. It's economic growth. We know this. The mystery is why all societies have not adopted the obvious remedies. Just recently, the 21-member Commission on Growth and Development -- including two Nobel-prize winning economists, former prime ministers of South Korea and Peru, and a former president of Mexico -- examined the puzzle.

Since 1950, the panel found, 13 economies have grown at an average annual rate of 7 percent for at least 25 years. These were: Botswana, Brazil, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Malta, Oman, Singapore, Taiwan and Thailand. Some gains are astonishing. From 1960 to 2005, per capita income in South Korea rose from $1,100 to $13,200. Other societies started from such low levels that even rapid economic growth, combined with larger populations, left sizable poverty. In 2005, Indonesia's per capita income averaged just $900, up from $200 in 1966.

Still, all these economies had advanced substantially. The panel identified five common elements of success:

· Openness to global trade and, usually, an eagerness to attract foreign investment.

· Political stability and "capable" governments "committed" to economic growth, though not necessarily democracy (China, South Korea and Indonesia all grew with authoritarian regimes).

· High rates of saving and investment, usually at least 25 percent of national income.

· Economic stability, keeping government budgets and inflation under control and avoiding a broad collapse in production.

· A willingness to "let markets allocate resources," meaning that governments didn't try to run industry.