The Bottom Billion: Why the Poorest Countries are Falling and What Can Be Done About It

The ‘bottom billion’ is the catchphrase for the one billion or so people who remain mired in poverty, while the rest of humanity takes increasingly adventurous technological leaps into the twenty-first century. As the author suggests in Chapter One, the real challenge of development is the group of countries at the bottom that have three common characteristics: (a) they are falling behind (and often falling apart); (b) their per capita incomes in the 1990s declined by 5%; and (c) they are mostly found in Africa and Central Asia. Almost every country in the world has gone through an undeveloped stage marked by poverty, disease, conflict and illiteracy, but most have gradually climbed or are climbing out of these miserable situations. So, the author asks: why have these countries of the ‘bottom billion’ not been able to follow suit? The answer, he says, is that they are trapped, a thesis which he explores in the rest of the book by describing four somewhat interlocking traps. The conflict trap comes first. Low income, slow growth, and primary-commodity dependence make a country prone to conflict, reducing growth and killing people, in turn intensifying risks that explode a country to conflict once again. Secondly, natural resources may bring a country temporary wealth but harm the economy as a whole, a phenomenon also associated with ethnic tensions and the absence of press freedom. This is the natural-resource trap. Thirdly, resource-scarce and landlocked countries are prone to be trapped by bad neighbors, depriving them of transport routes and neighboring markets. Finally, bad governance can also destroy the economy and waste valuable opportunities. In Part Three of the book, the author explores this topic from the perspective of globalization. These trapped countries, he says, have been unable to take advantage of globalization to achieve convergence: they occupy an inferior position in international trade, due to trade restrictions from outside—the rich world—as well as inside. To make things worse, some Asian states (China and India) have taken the initiative and generated agglomeration economies, making them more uncompetitive in the market. In addition, the economies of the ‘bottom billion’ face shortages of capital due to both the lack of capital inflow and the tendency toward capital flight. Along with this vanishing capital, these countries are losing educated and skilled people who could otherwise be expected to help save their homeland from the trap of bad policy and governance.