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

Ukraine: Mysterious 'Roaming Tank' Reportedly Takes Aim at Smugglers

Ukraine's TV, print media, Facebook abuzz with reports a 'roaming tank' is on the loose, destroying vehicles of those involved in smuggling More

US Wildlife Service Begins Probe of Killing of Cecil the Lion

Minnesota man accused of killing beast is in hiding, has been asked to contact US officials; White House to review extradition petition More

Video Kerry Five-Nation Tour to Cover Security, Iran Nuclear Deal

Secretary of state will visit Egypt, Qatar, Singapore, Malaysia, Vietnam to discuss security issues, Iran nuclear deal, Trans-Pacific Partnership More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Booming London Property a ‘Haven for Dirty Money’i
X
July 29, 2015 9:34 PM
Billions of dollars of so-called ‘dirty money’ from the proceeds of crime - especially from Russia - are being laundered through the London property market, according to anti-corruption activists. As Henry Ridgwell reports from the British capital, the government has pledged to crack down on the practice.
Video

Video Booming London Property a ‘Haven for Dirty Money’

Billions of dollars of so-called ‘dirty money’ from the proceeds of crime - especially from Russia - are being laundered through the London property market, according to anti-corruption activists. As Henry Ridgwell reports from the British capital, the government has pledged to crack down on the practice.
Video

Video Hometown of Boy Scouts of America Founder Reacts to Gay Leader Decision

Ottawa, Illinois, is the hometown of W.D. Boyce, who founded the Boy Scouts of America in 1910. In Ottawa, where Scouting remains an important part of the legacy of the community, the end of the organization's ban on openly gay adult leaders was seen as inevitable. VOA's Kane Farabaugh reports.
Video

Video 'Metal Muscles' Flex a New Bionic Hand

Artificial limbs, including the most complex of them – the human hand – are getting more life-like and useful due to constant advances in tiny hydraulic, pneumatic and electric motors called actuators. But now, as VOA’s George Putic reports, scientists in Germany say the future of the prosthetic hand may lie not in motors but in wires that can ‘remember’ their shape.
Video

Video Russia Accused of Abusing Interpol to Pursue Opponents

A British pro-democracy group has accused Russia of abusing the global law enforcement agency Interpol by requesting the arrest and extradition of political opponents. A new report by the group notes such requests can mean the accused are unable to travel and are often unable to open bank accounts. VOA's Henry Ridgwell reports.
Video

Video 'Positive Atmosphere' Points Toward TPP Trade Deal in Hawaii

Talks on a major new trade agreement among 12 Pacific Rim nations are said to be nearing completion in Hawaii. Some trade experts say the "positive atmosphere" at the discussions could mean a deal is within reach, but there is still hard bargaining to be done over many issues and products, including U.S. drugs and Japanese rice. VOA's Jim Randle reports.
Video

Video Genome Initiative Urgently Moves to Freeze DNA Before Species Go Extinct

Earth is in the midst of its sixth mass extinction. The last such event was caused by an asteroid 66 million years ago. It killed off the dinosaurs and practically everything else. So scientists are in a race against time to classify the estimated 11 million species alive today. So far only 2 million are described by science, and researchers are worried many will disappear before they even have a name. VOA’s Rosanne Skirble reports.
Video

Video Scientists: One-Dose Malaria Cure is Possible

Scientists have long been trying to develop an effective protection and cure for malaria - one of the deadliest diseases that affects people in tropical areas, especially children. As the World Health Organization announces plans to begin clinical trials of a promising new vaccine, scientists in South Africa report that they too are at an important threshold. George Putic reports, they are testing a compound that could be a single-dose cure for malaria.
Video

Video 'New York' Magazine Features 35 Cosby Accusers

The latest issue of 'New York' magazine features 35 women who say they were drugged and raped by film and television celebrity Bill Cosby. The women are aged from 44 to 80 and come from different walks of life and races. The magazine interviewed each of them separately, but Zlatica Hoke reports their stories are similar.
Video

Video US Calls Fight Against Human Trafficking a Must Win

The United States is promising not to give up its fight against what Secretary of State John Kerry calls the “scourge” of modern slavery. Officials released the country’s annual human trafficking report Monday – a report that’s being met with some criticism. VOA’s National Security correspondent Jeff Seldin has more from the State Department.
Video

Video Washington DC Underground Streetcar Station to Become Arts Venue

Abandoned more than 50 years ago, the underground streetcar station in Washington D.C.’s historic DuPont Circle district is about to be reborn. The plan calls for turning the spacious underground platforms - once meant to be a transportation hub, - into a unique space for art exhibitions, presentations, concerts and even a film set. Roman Mamonov has more from beneath the streets of the U.S. capital. Joy Wagner narrates his report.
Video

Video Europe’s Twin Crises Collide in Greece as Migrant Numbers Soar

Greece has replaced Italy as the main gateway for migrants into Europe, with more than 100,000 arrivals in the first six months of 2015. Many want to move further into Europe and escape Greece’s economic crisis, but they face widespread dangers on the journey overland through the Balkans. VOA's Henry Ridgwell reports.
Video

Video Stink Intensifies as Lebanon’s Trash Crisis Continues

After the closure of a major rubbish dump a week ago, the streets of Beirut are filling up with trash. Having failed to draw up a plan B, politicians are struggling to deal with the problem. John Owens has more for VOA from Beirut.
Video

Video Paris Rolls Out Blueprint to Fight Climate Change

A U.N. climate conference in December aims to produce an ambitious agreement to fight heat-trapping greenhouse gases. But many local governments are not waiting, and have drafted their own climate action plans. That’s the case with Paris — which is getting special attention, since it’s hosting the climate summit. Lisa Bryant takes a look for VOA at the transformation of the French capital into an eco-city.
Video

Video Racially Diverse Spider-Man Takes Center Stage

Whether it’s in a comic book or on the big screen, fans have always known the man behind the Spider-Man mask as Peter Parker. But that is changing, at least in the comic book world. Marvel Comics announced that a character called Miles Morales will replace Peter Parker as Spider-Man in a new comic book series. He is half Latino, half African American, and he is quite popular among comic book fans. Correspondent Elizabeth Lee reports from Los Angeles.
Video

Video Historic Symbol Is Theme of Vibrant New Show

A new exhibit in Washington is paying tribute to the American flag with a wide and eclectic selection of artwork that uses the historic symbol as its central theme. VOA’s Julie Taboh was at the DC Chamber of Commerce for the show’s opening.

VOA Blogs