how rich countries exploit poor countries

How rich countries exploit poor countries?

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How Rich Countries exploit Poor Countries?

Introduction

Ever wondered why rich countries are rich?

We often hear answers like -Because they happen to be rich, Or they have better trade,or natural resources made them so wealthy. 

What we fail to acknowledge is the picture of extreme exploitation, greed, diplomacy and manipulation. 

We have been told that poverty is decreasing. But it is still increasing at a rate only the rich know of. 

The richest 7 people control more wealth than the bottom half of the world combined. Most billionaires are from either North America or the European continent.

Let’s discuss how all this is happening? 

How Rich Countries exploit Poor countries?

Rich countries have been doing it for years. 

Every time, the so-called world leaders meet at UN headquarters and are asked to do something about rising poverty and hunger amongst various other issues. 

They set a target to achieve for a particular year. For eradicating hunger and poverty. Let’s say 200 million people for a year. 

Then, Rich countries release poor and developing country’s tremendous aid as they say so. 

For instance- US gave $39.2 billion, foreign assistance for fiscal year 2019.

Similarly, all developed countries pledge some amount accordingly and the total figure somewhere stood at $165 billion in 2017. 

These money is then given to country’s government and various other NGOs to eradicate hunger and poverty. 

The largest recipient lies in the African continent with countries such as Kenya, the Republic of Congo, Ghana, Nigeria among others.. 

But what if they fail to achieve their set target of reducing poverty by 200 million people? 

They do not manipulate the data or figure but change the criteria by which a person is defined to be in poverty. 

First of all, they set the criteria really unreasonable. For example- International Poverty Line stands at $1.90 which is the lowest you can ask for. 

Even a person cannot buy meals two times a day with that. To say nothing of other amenities required, human dignity and inflation.  And the line has been around this figure for decades. 

Give me a minute. 

Imagine that a person who earns less than $2.30 is considered to be in poverty. The target set by leaders is to eradicate poverty by 200 million people. 

Since they are not able to achieve this feat they mend their ways and change the poverty line to $1.90. Now, who earned between 1.90 and 2.30 are considered just fine. 

Or beforehand, they set the threshold so low which hardly makes any difference in the world. 

Likewise, they tend to manipulate Hunger Index and their so called targets. 

This is a flaw in itself. A large one. 

We are commonly hooked in believing that poverty is decreasing. In fact, according to the World Bank, there are only 689 million people who are in poverty. 

But according to estimates, taking a reasonable poverty line of $5 a day, as of 2017, there are 4.3 million people who are struggling to meet their ends. 

Most of which lies in African Continent. 

RICH DOMINATES?

According to a study ,

the US-based Global Financial Integrity (GFI) and the Centre for Applied Research at the Norwegian School of Economics,

In 2012, the last year of recorded data, developing countries received a total of $1.3tn, including all aid, investment, and income from abroad. But that same year some $3.3tn flowed out of them. In other words, developing countries sent $2tn more to the rest of the world than they received.  

If we look at all years since 1980, these net outflows add up to an eye-popping total of $16.3tn – that’s how much money has been drained out of the global south over the past few decades. To get a sense for the scale of this, $16.3tn is roughly the GDP of China and India combined. 

We see that aid is going to poor countries but who will account for aid in reverse by which these rich countries have gotten rich. 

Rich countries like the US, UK, Germany, France, and the likes of that in North America and Europe exploit poor countries by dominating their government by the aid they receive. 

They make those countries work for them by mending laws, and due to their poor infrastructure, they are not able to fight this. 

Corporates?

Countries and MNCs like Anglo-Americans extract precious natural resources like Iron ore, minerals, crude oil, gold, and diamond to name a few. 

Look, if these were properly governed by poor countries. It could be made them reach new heights. Or simply be rich. 

Not only this, poor countries, pay tremendous interests on those loans which are many times paid over directly to banks of New York, Spain, and London. 

Corporates are no different. 

On top of stealing natural resources, companies evade taxes by using trade misinvoicing

Which is simply falsifying the amount, quantity, or type of good in invoice and shifting money to their companies in tax-havens. 

After doing so, they launder the money and the money which was due to be taxed by government of Nigeria, is lying in their fake company registered in British-Virgin Islands where tax is effectively zero and money is untraceable. 

Now, assume how corporates loot the dreams of millions.

Bottom line

In other words, for every $1 of aid that developing countries receive, they lose $24 in net outflows.

Ever wondered how countries in Europe are so rich without having good amount of natural resources?

They became by exploiting the world, ruling the world for their own means. Their notion of poor countries is using them for cheap labour, bringing in more natural resources and reducing them to nothing. 

PS- Europe ruled India, China, The US, Hong Kong to name a few and extracted large amount of wealth from there. A lot of it. 

Conclusion—

Don’t get me wrong. The development has taken place. But not certainly at the rate or extent at which we are sold.

Poor countries lost $24 in order to get $1. 

Suggesting some solution,

We could write off the excess debts of poor countries, freeing them up to spend their money on development instead of interest payments on old loans;

Making them debt-free, imposing global democracy and fair trade policies, and improving wages.

This is good place to start if you ask me;)

According to some, making a change lies in the hand of wealthy and powerful countries. The question remains  Why would they help poor countries when they can easily get off by exploiting them? 

One thing is certain. Developed countries are not helping to grow developing countries. It’s quite opposite.

Every country wants to be powerful. And wealth is by far the only way to achieve this feat.

Until next Thursday…..

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