The squelch of nations

It's OK.
If your anything like me, after seeing the picture to this post your probably not going to read pass the next couple of sentences. You and I already feel guilty enough for not 'doing our bit' to help out developing nations. Truthfully, those tiny African children you see on world vision commercials make me feel a little too uncomfortable and ashamed to actually dial the number. (and next time you see the ads take note of how much water from the town well actually makes it into his container).

But some of the real answers as to why the poorest nations live in perpetual poverty is not because you and I don't give enough or even because we don't go to the extreme of flying over and volunteering our time. Sometimes it's even better simply to donate the cost of the airfare than visiting just to hug children and paint orphanages (who's benefit is that for yours or theirs?).

And no, its definitely not because they live in the desert and therefore have no resources.

Did you know though that in Ethiopia starting a business requires a bank deposit of 18 years worth of average income, upon which the account is then frozen? Or maybe you want to buy some land for a factory in Nigeria? No problem... all you need to do is hold for the mandatory 21 process to be completed, roughly equivalent to 274 days waiting time! Oh and don't forget to deduct the 27% of the purchase price taken in fees by the government.

In an effort to contain blistering levels of unemployment some governments make it so hard to sack an employee that most business simply don't bother hiring anyone in the first place. "In Burkina Faso, for instance, to sack someone an employer must first re-train him, place him in another job and pay a lump sum equivalent of 18 months salary"¹. 90% of the people in this nation are still peasants.

It's not hard to see why these guys do it tough when there little or no incentives for people to start producing even the most basic necessities for themselves and their nation. I do realise though that I'm probably over simplifying such a complex issue like poverty. A truck load of other factors influence what separates rich from poor. The cool thing about economics, however, is that it enables an ability for change to be made on a much broader scale than say adopting an orphan.You can read the full world bank report here.