Africa is a very large continent with over 50 countries and the second most populous continent, but it also is the poorest continent in the world and so Matt Ridley claimed “Africa needs to be rich rather than green”. There is many reasons why he said that, either from all the natural resources that Africa could trade with or the corrupt government that could be replaced and solve all their problems. This essay will show whether Matt Ridleys Statement would also apply to developing economies and I will describe the role of The World Bank and The International Monetary Fund on developing countries.
Countries around the globe have been trading their natural resources in exchange for other resources or money. Africa has been known for their natural resources such as gold and diamonds. Matt Ridley claims “Africa needs to be rich, rather than green.” It might be true that the reason why Africa has not developed was because of their corrupt government and leaders, African leaders have been out to improve their own individual needs rather than improving living standards for their own people, or creating jobs because “around 80% of Africans live on less than US $2 a day” (Annette Jaitner).
It has been argued that the reason why Africa has never developed and never will is because they lack motivation and innovation. Motivation is what drives people to do achieve a goal or a “dream” and innovation allows people to think outside the box and come up with a new idea that will change their lives, and the reason why African’s do not have those qualities is because they have to worry of whether or not they can provide for their family or even if they are going to survive in the dangerous African environment.
China is a country that has “boomed” back after an atomic bomb cleared out the whole country, but they have made a comeback and their economy is better than ever, but the only problem with china now is that they doing everything but going green. China are now known as manufacturers as they have numerous factories all around the country and the air pollution is being described as “air-pocalypse”. “Chinas Air-pocalypse kills around 350,000-500,000 people prematurely each year”(Malcolm Moore). So maybe it is better to be green in China’s situation rather than inhaling toxic air and hoping that nothing will happen. A city in China called Rizhao that is run by nothing but solar power and it was created in 2001 and the word Rizhao itself means sunshine in Chinese. The GDP per capita for each household in Rizhao is lower than other cities in China. China currently have over 5 trillion USD debt to the IMF and The World Bank, and they have a GDP per capita of $6807 and a population of over 1.3 billion (World Bank).
Japan used to use Nuclear power to power up 30% of japans electricity and since japan didn’t have many fossil fuels that was there only choice, but everything changed after March 2011 when Japan was hit with a massive Earthquake that caused a tsunami and breached the defenses of Fukushima Daiichi nuclear power plant on the east coast. Japan had then turned to Solar Powered Electricity in their times of need and that might have paid off because Japan have the least polluted country in the whole of Asia.
Matt Ridley’s statement that “Africa needs to be rich rather than green” might also apply to other developing countries as well because some countries have over trillions of US dollars worth of natural resources but they still don’t manage to take an economic advantage over other countries with little natural resources.
“Malawi has been described to be the worlds poorest country by the World Bank with only $226.50 GDP Per capita and Malawi has a population of 16.3 Million people” (Erika Rawes). The richest country is Africa has been identified as Morocco due to their GDP per capita of $7,606. “The richest country that the World Bank has identified is Luxembourg with $110,697.00 GDP per capita and a population of 536,061”(Erika Rawes). South Africa have a GDP per capita of $11,273, the population of South Africa is around 53 Million people and the debt they is over $137 Billion USD(www.nationaldebtclocks.org). Lithuania is another country in Africa that has been helped quite massively by the IMF and The World Bank, with GDP per capita of $15,649 and a debt of $15,196,561,383 and the debt is increasing by the minute (www.nationaldebtclocks.org).
It might be true that Matt Ridleys Statement can also apply to other developing countries because almost all countries have been gifted with natural resources and they can make the most of them by selling them and gaining an economical advantage. “Developing countries that are gifted with natural resources have to take advantage of them and these countries have to invest their revenues to the public or private sector in order to increase income and economic development”(Rick van der Ploeg and Tony Venables).
Another reason why some countries that have all the resources but fail to develop economically is the Resource Curse, which is a “paradoxical situation in which countries with an abundance of non-renewable resources experience stagnant growth or even economic contraction The resource curse occurs as a country begins to focus all of its energies on a single industry, such as mining, and neglects other major sectors”(www.Investopedia.com).
Countries such as India have used their natural resources efficiently and have succeeded but they are still to be described as a developing country. India has been using their natural resources and has not let the “Resource Curse” effect them.
After the climate disasters in Asia “US$35 billion of IMF Financial support was provided for adjustment and reform programs in Indonesia, Korea, and Thailand”(www.imf.org).
The IMF and The World Bank have been known for trying to support and assist developing countries to have an economic advantage, however what they are trying to conceal from the public are the terms of the loans they provide to developing countries. “The IMF’s and The World Bank structural adjustment policies (SAP) ensures the repayment of the loan by asking them to reduce spending on education and health”(www.globalexchange.org). The international Monetary Fund and The World Bank were first created to help developing countries get an economic advantage, but has now become a “pot of gold” for rich countries to reach in and grab all the money they need. Rich countries such as United States and United Kingdom are controlling the IMF and The World Bank because of their high GDP, these countries have an immeasurable “debt” that cannot be repaid, and they are still getting credits from the World Bank. “The IMF and The World Bank often advise countries to attract foreign investors by weakening their labor laws and by doing so they have to reduce wages and take some workers out of their jobs”(www.globalexchange.org).
However The World Bank has helped a few developing countries in Europe without them having to cut down costs on education and health such as Croatia, they have a “debt” around 300 billion HRK (Croatian Kuna). It has been argued by many that the world doesn’t need the IMF or The World Bank, but others claim the opposite because some people might not see the “bigger picture” of what the IMF is really trying to do. IMF can be beneficial in some different ways for example “The IMF assists member nations in numerous different capacities, If a country has a balance of payments deficit, the IMF can step in to fill the gap and IMF’s most significant role is its capability to provide credits to member nations in need of a bailout, IMF can attach conditions to these loans, including prescribed economic policies with which borrowing countries must fulfill”(www.investopedia.com).
IMF assist countries in more than just a financial way, the IMF can also provide technical and training as it has for many countries in all parts of the world. One of the continents that IMF has provided technical support and training to is Africa. “The Africa training institute started in June 2013”(www.imf.org). It has been argued that these training institutes that are setup by the IMF are very beneficial and could change the lives of some people who take advantage of it. Another training institute that IMF has help setup is in the Middle East, “the institute is hosted and funded in Kuwait on 2011”(www.imf.org). “The first IMF training instate started in Europe and Central Asia on 1992, financial support was mainly provided by the main sponsors IMF and Austria”(www.imf.org). “IMF has also help create an institute in Asia and the Pacific, the institution was created in Singapore in 1998, financial support was provided by Japan and Singapore”(www.imf.org). These institutes can be very beneficial in developing countries more than in any other country because training the staff can help improve the business and if the staff are trained than more customers will be coming to the business and so the total income would increase, and so the workers will have an increase in pay, and an increase in the countries GPA per capita.
Developing countries with plenty of natural resources should take an economic advantage over the countries without any natural resources. Matt Ridleys statement about how Africa should be rich rather than green is very simple to understand and also very true. The statement basically means that Africa should be richer than they are but due to corruption and high interest rates from the IMF, Africa are the poorest continent in the world. The IMF and The World Bank claim to be helping developing countries, but all they are really doing is “screwing” them over with really immoral terms, However IMF do help a lot of other countries to graduate from being a developing country to a developed country such as Czech Republic. It has been argued, but most people do believe that the world really does need the IMF and The World Bank.
Bibliography:-
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• Anon, (2016). Available at: • http://www.investopedia.com/terms/r/resource-curse.asp [Accessed 15 Feb. 2016].
• Anon, (2016). [online] Available at: • http://www.globalexchange.org/resources/wbimf/oppose [Accessed 15 Feb. 2016].
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• Malcolm Moore, (2016). [online] Available at: • http://www.telegraph.co.uk/news/worldnews/asia/china/10555816/Chinas-airpocalypse-kills-350000-to-500000-each-year.html [Accessed 15 Feb. 2016].
• Anon, (2016). [online] Available at: • http://inhabitat.com/rizhao-the-sunshine-city/ [Accessed 15 Feb. 2016].
• Anon, (2016). [online] Available at: • http://www.nationaldebtclocks.org/debtclock [Accessed 15 Feb. 2016].
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