According to the World Bank's classification system, high-income countries can have more than $12,476 per capita...

According to the World Bank's classification system, high-income countries can have more than $12,476 per capita GNI while the low-income countries only got a per capital GNI in $1,025 or less. Do you think it is in the material interests of high-income countries to help low-income countries improve their economic performance? Why or why not?

Expert Solution

Yes, I do think that helping out poor countries has a innate material interests which are latent from a common man's perspective. Let's look at some of them:

Firstly, global development occurs when all the countries especially the emerging and poor economies strive forwards towards attaining the goal. To increase their dominance in such poor countries, high income countries often tend to take advantage of this grave situation in poor countries.
Secondly, debt trap diplomacy. It may be related to the previous point but the idea here is slightly different. Developed nations come forward and propose lucrative development projects for the poor countries, and the latter can pay their debt at a later timeframe. Sooner after the project's completed, poor nations are unable to pay the debt with interest and end up giving up territories and resources once for all to the proposing nation. Therefore, 'debt trapped'.
Thirdly, high income nations tend to see the poor nations as just a potential market where they can expand their operations and reap profits. Due to widespread unemployment in these countries, they are ready to take up job as a cheap labor. Thereby further reducing labor costs from a firm's point of view.
Lastly, getting the diplomatic support in conventions, conferences, treaties and sanctions. More the support, more the chances are that the country's proposal for any international trade/political amendment is accepted. Rich countries see this as an opportunity to expand the support.

Hope this helps. Do hit the thumbs up. Cheers!

Rahul Sunny answered 1 year ago

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