Monday, August 02, 2010

How do Nations Approach Development? Education or Industrialization?

Something that has struck me here in Bolivia is the lack of opportunity for even educated professionals. I had always assumed that escaping poverty came down to the simple tool of education. Once educated, professionals recirculate their high wages to help rise a country out of the depths of poverty. I've sadly begun to realize, that this, unfortunately, is not always the case.

Bolivian architects and engineers are lucky to earn $300 a month with large firms. CFOs can make $700 a month with a good company. I had always thought that these were the sorts of basic salaries for miners or market workers, not professionals. I wrongly assumed that poor countries just didn't have very many professionals and education could solve the void by creating professionals with "professional" (ie US) wages. I was clearly wrong. Now, viewing education not as the game changing solution I had once thought (though I still think education as a whole greatly helps the future prospects of individuals and nations), I am at a loss for theoretical solutions of how a nation quickly rises to economic greatness.

Asian nations have achieved growth with rapid industrialization (Japan, China, S. Korea); India has done it with technology; Brazil is climbing the income ladder with redistributed oil and agricultural revenues. What do these nations have in common? A strong, widely accepted, national goal.

Like a business filling a market demand, middle income countries see manufacturing of cheap goods or tech products as their way to compete globally. An entire country dedicates its politics, its resources, and its national pride to certain industries, and uses these to boost the economy as a whole. As Brazil exemplifies, strong redistribution and a plan for how to circulate new national income helps raise an entire country's GDP. The common theme behind these governments is the willingness to forgo humanitarian pressures, to convince the people to blindly pursue a single national interest, and to unforgivingly follow this plan.

Beyond education, which I still believe is one of the most important difference makers in poverty eradication, a strong (and undivided) government must push through a national plan to industrialize. If a government has enough political backing and national willpower to sacrifice a generation by ignoring the needs of today, then a country doesn't need to divide its resources between the immediate and the long term; it can whole heartedly invest in the future and enter tomorrow as global economic power.


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