The wealth and poverty of nations

If we want to be a healthy nation, we must know something about what it takes to be a healthy nation. If we want to be a wealthy nation, we must know what we must do to make the nation wealthy.

So often have we been told that Malawi is one of the poorest countries of the world. At the same time, we know that smaller countries like Singapore, Hong Kong, Switzerland are among the richest countries of the world.
How do these differences come about? If we think one day we will wake up to find angels from heaven have dropped piles of gold, diamonds and other precious metals and Malawi has become rich, we are fooling no one but ourselves.

Wealth comes about through what people do and when they do the right things. Whether we know it or not, we are all participants in producing, distributing and consuming wealth. It behooves us to know the difference between developed and developing or less developed countries.

A country is said to be developed when it has a relatively high gross domestic product (GDP) which means the wealth produced in a country during a particular year. It does not mean the whole wealth existing in the country.
A developing or less developed country is a country with a relatively low GDP. In a developing or poor country, the infant mortality rate is too high, the calorie intake of the average person tends to be lower than in developed countries. A relatively less GDP per capital is accompanied by many other things such as unsafe drinking water, malnutrition and diseases.

Economists have established an international poverty line below which people are said to be living in poverty. In countries like Malawi, the average person is said to be living on less than a dollar a day. What exactly this amount to differs from country to country. People of different countries eat different types of food with different prices. A family man in a Malawian village lives in a hut for which he does not pay rent, his wife draws water from a village well, the water is free, he has a hectare or more hectares of his own land. All these things are worth much more than $360 (K263 000) a year.

Factors that affect economic development
The basic source of economic development is the existence of natural resources. In this term are included land and what is below it such as good soil, minerals and regular rains and so on. All these are available in the country as gifts of nature, they are not made by man.

The second factor is capital, a short-term for man-made goods used in the production of other goods. These include factory machinery, tractors on the farm and inputs like fertilisers; physical infrastructures such as roads, bridges and railway. Even more important than these is human capital consisting of sound education and health. Economic development does not take place where people are ignorant and unhealthy; they must be well educated and have the right skills.

The third factor of production is labour. This term embraces not just labourers, but all those who work for an organisation from labourer to chief executives and lawyers. The contribution of labour is judged by productivity. This is the amount of output produced during a time period such as a day or an hour. A worker who used machines like computers and tractors produces more than the one who works without these. Developed countries are richer because they work with more capital goods than in developing countries. Most farmers in Malawi or Africa cultivates land using hoes whereas in developed countries like the United States and France they use tractors.

The fourth factor is technology. This is one of the terms rather difficult to specify. It includes equipment plus skills used in a business.
Compare the amount of work that can be done by a businessperson that used computers with the amount accomplishes by a business that has no computers. When we say a developed country used higher technology than a poor or developing country, we mean the sort of capital goods used the skills and the manner of organising the business.

In elementary textbooks of the past, factors of production were said to be land (natural resources), capital, labour and the entrepreneur, the person who launches and organises a business and bears the risks. Some economists argue that the entrepreneur is in a different category because he or she is the organiser of the other three or four. Whichever side one take, the fact remains that a country that is short of entrepreneurs cannot grow fast; this is one of the problems of Malawi.
In some countries, entrepreneurs have emerged spontaneously. In other countries they had to be trained or and encouraged by government.
There is a dearth of entrepreneurs in Malawi. To achieve higher levels of development, the government must try and shelves this problem. Problems do not solve themselves. n

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