News / Africa

Poor Countries Denied Chance to Succeed?

Jobless Africa
Jobless Africa

Multimedia

Audio
Joe DeCapua
A Harvard professor said developing countries were forced down an economic path in the 20th Century that lacked innovation, entrepreneurship and technology. As a result, he said, they had stunted development, while many other nations prospered.
 
Professor Calestous Juma tells the story of dueling economic theories. One based on new ideas and risk taking, and the other on pessimism and ignorance. It’s a story of the haves and have nots. Juma is professor of the Practice of International Development and Faculty Chair of the Innovation for Economic Development Executive Program.
“In 1911, an Austrian economist by the name of Joseph Schumpeter published a book called The Theory of Economic Development, which proposed that economies grow over time through innovation. Through new combinations that involved the application of new technologies. And this book became really a standard on how to think about economic transformation through the use of technology and entrepreneurship,” he said.
 
Juma said Schumpeter took a different view on what was needed for robust economic growth.
 
“It was new because up to that point people believed that economies grew because of extraction of natural resources – not because of application of technologies. It was also new because he proposed that the use of new technologies resulted in revolutionary changes in economic systems.”
 
Schumpeter, he said, based his theory on what he saw happening in developed nations.
 
“He made the observation by looking at the impact of railroads in Europe and America. So, rich nations were already doing it, but it had not been explained in a clear and explicit way, which had to do with this idea of introducing new combinations in the economy, which [are] technological combinations -- but also the recognition that these new technological transformations were being driven by entrepreneurs. So entrepreneurship became a very central part of his thinking.”
 
Professor Juma said new industries develop through – what’s called – creative destruction.
 
“His idea was that when you introduce, say, railroads in a community, which didn’t have railroads before, so they’re using stage coaches, railroads will destroy stage coaches. That industry will disappear, but it will create a new industry, which is a faster industry with a greater opportunity for economic expansion. If you think of it in modern times, if we introduce downloading of music, it destroys CDs. So, it’s destructive to the CDs, but it creates new industries, which is downloading of music,” he said.
 
Such developments are common today. But many economists in the 20th Century thought the developing world was not ready for Schumpeter’s ideas.
 
Juma said, “So the critics said emerging economies don’t have new technologies. Secondly, he said, the agent of change is [the] entrepreneur. Then they argued that the entrepreneur is not the biggest player in poor economies you need big government. You need bureaucracies. And thirdly, he put a lot of emphasis on industrial production. His critics said what the poor want is not production. They want consumption. So we give them some products that have been developed elsewhere. But it doesn’t make sense to enable them to produce themselves.”
 
Juma does not think racism was behind their beliefs, but rather pessimism about developing countries.
 
“Because they looked at them and said – they’re so poor, we cannot possibly give them the latest technologies because they are not even able to absorb them. So let’s find them older technologies. So, I don’t think it was racism. I think it was a mindset that was more colored by pessimism and less by an appreciation that even poor countries are able to solve their own problems when given a chance,” he said.
 
Instead, they were given – so-called -- appropriate technologies. Juma said instead of a modern water supply with sewers, they were told to dig wells. Instead of building modern electric grids, they were given fuel efficient stoves.
 
During the HIV/AIDS epidemic, many doubted African nations had the capability to distribute and administer antiretroviral drugs. And as a result, they said the drugs could not be effective. African nations proved them wrong.
 
“Again that was another example of pessimism. Of saying there’s really very little you can do for these countries because they don’t have the infrastructure. The same infrastructure they had been denied from building in the first place,” said Juma.
 
In the 20th Century, many had thought Ghana had the potential to become an economic powerhouse – that it would become what South Korea is today.
 
Juma said, “It’s very interesting you bring up the case of Ghana because Ghana at independence got a foreign economic advisor – a Nobel Laureate in economics – Arthur Lewis. He was one of the critics of Schumpeter, who did not believe that a country like Ghana was capable of transforming itself technologically, whereas South Korea was able to do that. At that time, there wasn’t a big difference between South Korea and Ghana.”
 
Juma recommends giving priority to innovation, technical and engineering fields, transformative infrastructure and entrepreneurship.
 
The Harvard professor is working on a new book containing his ideas. It has the tentative title of How Economies Succeed: Innovation and the Wealth of Nations. It’s due out in 2015.

You May Like

Unpaid Kurdish Fighters Sign of Economic Woes

Sharp cuts in Kurdistan's budget by Baghdad, falling oil revenue, coping with refugees, inflated public sector have hit regional economy hard More

Koreas Exchange List of Envoys for Family Reunion Talks

Officials will discuss date, venue and number of participants for reunion; Seoul hopes to hold event late this month More

China Targets 197 in Online Speech Crackdown

Nearly 200 punished for 'spreading rumors' online in ongoing crackdown on free speech More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Calais School Offers Another Face of Europe’s Migrant Crisisi
X
Lisa Bryant
September 02, 2015 6:19 PM
Europe is facing mounting criticism over how it’s handling its biggest migration crisis since World War II. But not all Europeans believe building walls or passing repressive policies are the answer. A school for migrants in the French port city of Calais, is opening doors and building bonds across nationalities. VOA's Lisa Bryant reports.
Video

Video Calais School Offers Another Face of Europe’s Migrant Crisis

Europe is facing mounting criticism over how it’s handling its biggest migration crisis since World War II. But not all Europeans believe building walls or passing repressive policies are the answer. A school for migrants in the French port city of Calais, is opening doors and building bonds across nationalities. VOA's Lisa Bryant reports.
Video

Video Russia-Japan Relations Cool as Putin Visits China for WWII Anniversary

Russian President Vladimir Putin is in Beijing for commemorations of the 70th anniversary of China's WWII victory over Japan. Putin is expected to visit Japan later this year, but tensions between Tokyo and Moscow over islands disputed since the war, and sanctions over Ukraine, could pour cold water on the plan. VOA's Daniel Schearf reports.
Video

Video Kurdish Fighters on IS Frontline Ready for Offensive

Finger on the trigger, the Kurdish Peshmerga soldier stared across the dust at a village taken over by Islamic State extremists. The Kurdistan’s Khazir frontline, just 45 minutes from the Islamic State stronghold of Mosul. And at this point, the militants were less than two kilometers away. VOA's Sharon Behn reports.
Video

Video Yemen ‘on Brink of Disaster’ as Medical Shortages Soar

Aid agencies warn Yemen is on the brink of humanitarian disaster – with up to half a million children facing severe malnutrition, and hospitals running out of basic medicines. There are fears Yemen's civil war could escalate as the coalition led by Saudi Arabia tries to drive back Houthi rebels, who seized control of much of the country earlier this year. Henry Ridgwell reports.
Video

Video Apps Helping Kenyan Businesses Stay Ahead of Counterfeiters

Counterfeit goods in Kenya cost the government as much as $1 billion each year in lost tax revenues. The fake goods also hurt entrepreneurs who find it hard to carve out a niche in the market and retain customers. But as Lenny Ruvaga reports from Nairobi, information technology is being used to try to beat the problem.
Video

Video Nobel Prize Winner Malala Talks to VOA

Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video War, Drought Threaten Iraq's Marshlands

Iraq's southern wetlands are in crisis. These areas are the spawning ground for Gulf fisheries, a resting place for migrating wildfowl, and source of livelihood for fishermen and herders. Faith Lapidus has more.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Rebuilding New Orleans' Music Scene

Ten years after Hurricane Katrina inundated New Orleans, threatening to wash away its vibrant musical heritage along with its neighborhoods, the beat goes on. As Bronwyn Benito and Faith Lapidus report, a Musicians' Village is preserving the city's unique sound.
Video

Video In Russia, Auto Industry in Tailspin

Industry insiders say country relies too heavily on imports as inflation cuts too many consumers out of the market. Daniel Schearf has more from Moscow.
Video

Video Scientist Calls Use of Fetal Tissue in Medical Research Essential

An anti-abortion group responsible for secret recordings of workers at a women's health care organization claims the workers shown are offering baby parts for sale, a charge the organization strongly denies. While the selling of fetal tissue is against the law in the United States, abortion and the use of donated fetal tissue for medical research are both legal. VOA’s Julie Taboh reports.
Video

Video Next to Iran, Climate at Forefront of Obama Agenda

President Barack Obama this week announced new initiatives aimed at making it easier for Americans to access renewable energy sources such as solar and wind. Obama is not slowing down when it comes to pushing through climate change measures, an issue he says is the greatest threat to the country’s national security. VOA correspondent Aru Pande has more from the White House.
Video

Video Arctic Draws International Competition for Oil

A new geopolitical “Great Game” is underway in earth’s northernmost region, the Arctic, where Russia has claimed a large area for resource development and President Barack Obama recently approved Shell Oil Company’s test-drilling project in an area under U.S. control. Greg Flakus reports.
Video

Video Philippine Maritime Police: Chinese Fishermen a Threat to Country’s Security

China and the Philippines both claim maritime rights in the South China Sea.  That includes the right to fish in those waters. Jason Strother reports on how the Philippines is catching Chinese nationals it says are illegal poachers. He has the story from Palawan province.
Video

Video China's Spratly Island Building Said to Light Up the Night 'Like A City'

Southeast Asian countries claim China has illegally seized territory in the Spratly islands. It is especially a concern for a Philippine mayor who says Beijing is occupying parts of his municipality. Jason Strother reports from the capital of Palawan province, Puerto Princesa.

VOA Blogs