The 21st Century Economy—A Beginner's Guide by Randy Charles Epping

Author:Randy Charles Epping [Epping, Charles Randy]
Language: eng
Format: epub
ISBN: 978-0-307-47266-3
Publisher: Knopf Doubleday Publishing Group
Published: 2009-06-13T16:00:00+00:00

Source: 2007 CIA World Factbook

At the beginning of the 21st century, the trend is for developing countries to have ever-increasing gaps between the incomes of the rich and the poor. In China, for example, the gap was increasing by more than 5 percent per year during the first years of the century. Even though the booming Chinese economy had succeeded in bringing more than a hundred million citizens out of poverty, hundreds of millions more were still earning less than a dollar a day.

As incredible as it may seem, the net worth of the ten wealthiest people in the world is more than the total yearly earnings of everyone living in the world's developing countries—essentially 90 percent of the world's population. Meanwhile, more than a million children die each year from lack of access to clean water. A visit to any big city in any developing country—Mumbai, Rio de Janeiro, or Mexico City, for example—shows the disparity with amazing clarity, with millions living in makeshift housing, with open sewers, rampant diseases, and no access to public services like education and health care.

And in the countryside, it isn't much better. In Africa, India, and China, for example, rural households are usually the poorest in the land—and, in many cases, getting poorer. Since productivity in agriculture has grown more slowly than productivity in other areas, the income of rural dwellers, most of whom rely on agriculture for the majority of their income, has declined relative to their urban compatriots. This, in part, explains the exodus of the rural poor to the rapidly expanding cities of most developing countries.

The shift to a market-based economy in many developing countries has increased the importance of proper education. Skilled workers earn much more in the expanding trade-oriented economies of China and India, for example, than their unskilled neighbors. Improving education, therefore, is a priority for reducing income gaps. But in many countries, teachers—and funds for elementary education—are often lacking.

Improving rural infrastructure—building new roads and train lines, for example—would also increase productivity in farming and increase job opportunities for the rural poor. But cash-strapped governments often lack the money to get things started. New techniques in agricultural production can provide valuable help. When new rice seeds were developed for African farmers, for example, it was estimated that yields would more than double, since they took less than half the time to grow compared to normal rice varieties. These New Rices for Africa, or NERICAS, were expected to revolutionize the farming sector in most sub-Saharan African countries. But since most farmers lacked the know-how and had no access to capital or credit, they were unable to pay for the seeds—or the fertilizer to make the seeds grow faster. At the beginning of the 21st century, after several years of promotion—mostly by well-meaning rich-country advisers—NERICA rice was being planted on only approximately 5 percent of the land where it could thrive. And without the infrastructure to get the crops to market, or fertilizer and seeds to the farmers, the project appeared doomed to failure.

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