Analytical take on the topic of extreme poverty

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Extreme Poverty 101
KAPOW! – 10 “killer” slides in 10 minutes
8th October 2020
ONLY FOR
RECKLESS USE
OFFICIAL
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3. 3
This material was spun up from a number of solid reads
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Hugh’s Killer
Idea’s (HKI) Book
Rating
10 10
Hugh’s Killer Ideas is an Amazon Associate. Book purchases resulting from Amazon links may earn an affiliate commission

4. 4
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Yes, Groundhog Day! It’s that time again. Quiz time.
• In 1820, almost 9 in 10 people alive on the Earth were in extreme
poverty (living on less than $1.90 a day). What percent of today’s
~7.5billion people are living in extreme poverty?
❑ A: 90% ❑ B: 50% ❑ C: 10%
1
• In terms of money flowing to developing countries, what is the
largest source?
❑ A: Short-term debt ❑ B: Foreign Aid ❑ C: Remittances
2
• Over the last 20 years, how has Official Development Assistance
(foreign aid from rich countries to developing) changed?
❑ A: More than doubled ❑ B: Reduced substantially ❑ C: Remained flat
3
You can find the answers at the top of the next slide!

5. Money matters. And having very little – being in poverty – has been
described as the worst form of violence and a threat to human security
5
3
4
6
7
8
15
10 35
25
20 30 40
2
3
7
4
5
6
8
9
India
Togo
China
US
Britain
Denmark
0.625 1.25 2.5 5 10 20 40
Mean
Life
Satisfaction
GDP per person, 2003, $'000, log scale GDP per person, PPP, $'000
OECD
Better
Life
Index
SOURCE: The Economist
Average Life Satisfaction & GDP per capital, PPP Average Well-being & GDP per capital, PPP
“They say money can't buy happiness? Look at the f***ing smile on my face. Ear to ear, baby.” – Boiler Room
1 2 3 4 5 6 7 8 9 10
10 10
Answers to Quiz! Q1. C: 10%. Q2. C: Remittance. Q3. A: More than doubled.
As George Orwell so presciently put it in
his novel Down and Out in Paris and
London, poverty “annihilates the future”.

6. “Every morning our newspapers could report, “More than 20,000 people
perished yesterday of extreme poverty.” The stories would put the stark
numbers in context – up to 8,000 children dead of malaria, 5,000 mothers
and fathers dead of tuberculosis, 7,500 young adults dead of AIDS, and
thousands more dead of diarrhea, respiratory infection, and other killer
diseases that prey on bodies weakened by chronic hunger. The poor die in
hospital wards that lack drugs, in villages that lack antimalarial bed nets, in
houses that lack safe drinking water. They die namelessly, without public
comment. Sadly, such stories rarely get written. Most people are unaware of
the daily struggles for survival, and of the vast numbers of impoverished
people around the world who lose that struggle.”
- Jeffrey Sachs, The End of Poverty
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10 10

7. 7
There is little romance in extreme poverty (Level 1)
“LEVEL 1. You start on Level 1 with $1 per day. Your
five children have to spend hours walking barefoot
with your single plastic bucket, back and forth, to fetch
water from a dirty mud hole an hour’s walk away. On
their way home they gather firewood, and you prepare
the same gray porridge that you’ve been eating at
every meal, every day, for your whole life – except
during the months when the meager soil yielded no
crops and you went to bed hungry. One day your
youngest daughter develops a nasty cough. Smoke
from the indoor fire is weakening her lungs. You can’t
afford antibiotics, and a month later she is dead. This
is extreme poverty. Yet you keep struggling on. If you
are lucky and the yields are good, you can maybe sell
some surplus crops and manage to earn more than $2
a day, which would move you to the next level. Good
luck! (Roughly 1 billion people live like this today.)”
“An old man in Ethiopia says: ‘Poverty snatched away my wife from me. When she got sick, I tried my best to cure her with tebel [holy water] and woukabi [spirits], for
these were the only things a poor person could afford. However, God took her away. My son, too, was killed by malaria. Now I am alone.’” – William Easterly
1 2 3 4 5 6 7 8 9 10
10 10
Water
Transportation
Cooking
Food
Sleeping

8. 8
While this challenge can often feel remote, it is real & important
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10 10
We naturally feel less empathy
as we move from our family
The OG economist Adam Smith built on David Hume’s idea of the
concentric circles in his book The Theory of Moral Sentiments (1760)
“Let us suppose that the great empire of China, with all its myriads of inhabitants, was
suddenly swallowed up by an earthquake, and let us consider how a man of humanity in
Europe, who had no sort of connection with that part of the world, would be affected upon
receiving intelligence of this dreadful calamity. He would, I imagine, first of all, express very
strongly his sorrow for the misfortune of that unhappy people, he would make many
melancholy reflections upon the precariousness of human life, and the vanity of all the labours
of man, which could thus be annihilated in a moment. He would too, perhaps, if he was a man
of speculation, enter into many reasonings concerning the effects which this disaster might
produce upon the commerce of Europe, and the trade and business of the world in general.
And when all this fine philosophy was over, when all these humane sentiments had been once
fairly expressed, he would pursue his business or his pleasure, take his repose or his
diversion, with the same ease and tranquility, as if no such accident had happened.
The most frivolous disaster which could befall himself would occasion a more real disturbance.
If he was to lose his little finger to-morrow, he would not sleep to-night; but, provided he never
saw them, he will snore with the most profound security over the ruin of a hundred millions of
his brethren, and the destruction of that immense multitude seems plainly an object less
interesting to him, than this paltry misfortune of his own. To prevent, therefore, this paltry
misfortune to himself, would a man of humanity be willing to sacrifice the lives of a hundred
millions of his brethren, provided he had never seen them?”
Country
Community
Family
Region
World
“Sympathy with persons remote from us is
much fainter than with persons near &
contiguous” - David Hume, philosopher

9. 3,277
4,254
5,935
7,489
8,926
10,346
13,176
15,469
2010
1980
1960
1950 1970 2017
1990 2000
2.3% p.a.
984
1,897
536
280
65
14
13
East Asia and Pacific
Latin America and the Caribbean
South Asia
Sub-Saharan Africa
Middle East and North Africa
4
World
Europe and Central Asia
Other High Income
47
731
217
413
24
16
7
7
61.6%
x
% in poverty
within region
2.3%
47.3 16.2%
54.3% 41.1%
14.2% 4.1%
6.2% 5%
5% 1.5%
0.5% 1.2%
35.9% 10%
The Good News! The % of the world’s population living in poverty has
gone from one in three to one in ten over the past 25 years
1990 2015
Global GDP per capita, 1950-2017, PPP People Living in Poverty ($1.25 per day) by Region, millions
“The move from universal poverty to varying degrees of prosperity has happened rapidly in the span of human history. Two
hundred years ago the idea that we could potentially achieve the end of extreme poverty would have been
unimaginable. Just about everyone was poor, with very few exceptions” – Jeffrey Sachs
1 2 3 4 5 6 7 8 9 10
10 10

10. “As king of France, Louis XIV, the “Sun King” could afford to build the most
magnificent palace Europe had ever seen, but he could not keep it cool in summer as
effectively as most middle-class people in industrialized nations can keep their homes
cool today. His gardeners, for all their skill, were unable to produce the variety of fresh
fruits and vegetables that we can buy all year-round. If he developed a toothache or fell
ill, the best his dentists and doctors could do for him would make us shudder. But
we’re not just better off than a French king who lived centuries ago. We are also much
better off than our own great-grandparents. For a start, we can expect to live about
thirty years longer. A century ago, one child in ten died in infancy. Now, in most rich
nations, that figure is less than one in two hundred. Another telling indicator of how
wealthy we are today is the modest number of hours we must work in order to meet
our basic dietary needs. Today Americans spend, on average, only 6 percent of their
income on buying food. If they work a forty-hour week, it takes them barely two hours
to earn enough to feed themselves for the week. That leaves far more to spend on
consumer goods, entertainment, and vacations.”
- Peter Singer, The Life You Can Save
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10 10

11. 84%
68%
55%
29%
10%
16%
32%
45%
71%
90%
1820 2015
1900 1950 2000
Not in Extreme Poverty In Extreme Poverty
Living in Extreme Poverty, $1.90 per day, 1820-2015, % Global Poverty Forecast, 1981-2015, billions
And this is despite the rapidly growing world population. Furthermore,
it looks like this trend will continue (fingers crossed)
1.9 1.7
0.7
0.7 1.3
1.2
0.4
1.0
1.5
0.4
0.6
1.4
1.1
1.4
2.6
1981 2000 2015
4.5
6.0
7.4
1.4% p.a.
1.9-3.2$ a day
Above 10$ a day
5.50-10$ a day
Below 1.90$ a day
3.20-5.50$ a day
“For 500 years the West patented six killer applications that set it apart. The first to download them was Japan. Over the last century, one Asian country after another
has downloaded these killer apps- competition, modern science, the rule of law and private property rights, modern medicine, the consumer society and
the work ethic. Those six things are the secret sauce of Western civilization.” – Niall Ferguson
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10 10
“World Bank president Robert Zoellick noted
in 2010, ‘Between 1981 and 2004, China
succeeded in lifting more than half a billion
people out of extreme poverty. This is
certainly the greatest leap to overcome
poverty in history” – Graham Allison

12. 30
20
40
10
0
60
40
50
0 80
20 100
60
Average
Egypt
Russia
Global population, % of total
GDP per person, $'000
Ethiopia
Bangladesh
Pakistan
India
Nigeria
Indonesia
South
Africa
China
Brazil
Mexico
Japan
Germany
United
States
Yes. There are a lot of people below the average GDP per capita of
~$15,000 USD; and wealth is distributed very unequally!
Distribution of Global Wealth, USD, 2015
70.1%
21.3%
7.9%
0.7%
2.7%
(8%)
39.7%
(111%)
100% =
Wealth by segments Total global wealth
45.9%
(129%)
11.6%
(33%)
$1M+
$100k-1M
$10k-100K
<$10k
100% 280.2 trillion
“2% of the world’s people own half the world’s wealth,
and the richest 10% own 85% of the wealth” – Peter
Singer
Global Population by GDP per capital, USD PPP
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10 10

13. “The World Bank defines extreme poverty as not having enough income to meet the most basic human needs for adequate food, water,
shelter, clothing, sanitation, health care, and education” – Peter Singer
Distribution of those in Poverty by Country, 2015
However, today our main focus will be on those still in poverty, half
of which are in just three countries – India, Nigeria and the DRC
56%
30%
6%
3%
100% =
1%
1%
2%
2015
731
Distribution of those in
Poverty by Region, 2015
Europe and
Central Asia
Other High
Income
Middle East
and
North Africa
East Asia
and Pacific
Latin America
and the
Caribbean
South Asia
Sub-Saharan
Africa
1 2 3 4 5 6 7 8 9 10
10 10

14. “We have no water. We have no oil. We have no minerals. We have only animals. If you say to me, “One day you will grow crops,” I will ask you, “From
where will you get water?” If you say to me, “One day there will be industry,” I will ask you, “From where will you get water?” – Ahmed Maalim
Mohamed, in Nina Monk’s The Idealist
Moreover, there are 60 countries where more than 10% of the
population live in extreme poverty (40 are in Africa) …
78
77
72
70
67
66
62
62
60
58
56
54
51
50
50
49
49
48
45
44
43
42
42
41
40
38
38
38
37
37
Central African Republic
Burundi
Congo, Democratic Republic of the
Madagascar
Uzbekistan
Mozambique
Uganda
Malawi
Togo
Guinea-Bissau
Lesotho
Niger
Mali
Zambia
Rwanda
Nigeria
Turkmenistan
Benin
Eswatini
Tanzania
Burkina Faso
Angola
South Sudan
Liberia
Sierra Leone
Chad
Papua New Guinea
Senegal
Congo, Republic of the
Kenya
35
32
31
28
27
25
25
24
23
23
21
19
19
18
17
17
16
15
15
15
15
14
14
13
13
13
13
13
10
10
Solomon Islands
Laos
Guinea
São Tomé and Príncipe
East Timor
Ivory Coast
Cameroon
Ethiopia
Haiti
Suriname
Zimbabwe
Kiribati
South Africa
Yemen
Comoros
Djibouti
Honduras
Botswana
Micronesia
Nepal
Sudan
Bangladesh
Guyana
Belize
India
Namibia
Ghana
Vanuatu
Venezuela
Gambia, The
Countries by Poverty Rates, % of population earning less than $1.90 per day
“The Former UN Secretary-General, Kofi
Annan, put it this way: ‘For many people
in other parts of the world, the mention
of Africa evokes images of civil unrest,
war, poverty, disease and mounting
social problems. Unfortunately, these
images are not just fiction. They reflect
the dire reality in some African countries,
though certainty not all.’”
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10 10

15. Afghanistan
Angola
Azerbaijan
Benin
Bhutan
Bolivia
Burkina Faso
Burundi
Cambodia
Cameroon
Central African Republic
Chad
Comoros
Congo, Dem. Rep.
Cote d'Ivoire
Djibouti
Equatorial Guinea
Eritrea
Ethiopia
Gambia
Ghana
Congo, Rep.
Guinea
Guinea-Bissau
Guyana
Haiti
Kazakhstan
Kenya
Niger
Nigeria
Rwanda
Senegal
Sierra Leone
Somalia
Sudan
Tajikistan
Tanzania
Togo
Turkmenistan
Uganda
Uzbekistan
Yemen
Zambia
Zimbabwe
Lesotho
Liberia
Madagascar
Malawi
Mali
Mauritania
Moldova
Mongolia
Mozambique
Myanmar
Nepal
Lao PDR
Kyrgyz Republic
Korea, Dem. Rep.
… and 58 countries where The Bottom Billion (a billion people who
are stuck at the bottom) reside
Countries defined as low-income and caught in one or other of the four development traps – the conflict trap, the natural
resources trap, the trap of being landlocked with bad neighbors, and the trap of bad governance in a small country
“The real challenge of development is that there is a group of countries at the bottom that are falling behind, and often failing apart. The countries at the
bottom coexist with the twenty-first century, but their reality is the fourteenth-century conditions.” – Paul Collier, The Bottom Billion
1 2 3 4 5 6 7 8 9 10
10 10

16. 429 428 1,105 158 3,007
5,356
64,582
1,700
31,762
62,641
Singapore
Jamaica North Korea USA
South Korea
+4% p.a.
+9% p.a.
+1% p.a.
+9% p.a.
+5% p.a.
1960 2020
In 1960 Jamaica had the same GDP per capita as
Singapore; and the USA was x7 larger. Just 60 years later
Singapore has a higher GDP per capital than the USA
GDP Per Capita,
1960-2020
Consistent economic growth has allowed countries to make huge
inroads – examples include Singapore, South Korea and China
41%
67%
11%
1%
-17% p.a.
Chinese Population Living in Poverty, 1990-2015
318
959
4,550
8,067
2015
1990 2010
2000
+14% p.a.
Chinese GDP per capita, USD, PPP
In 1990, over 2 in 3 people living in China were in poverty.
By 2015, just 25 years later than number was less than 1 in
100. Furthermore, GDP per capita had growth x25
“Growth usually does benefit ordinary people ... growth is not a cure-all, but the lack of growth is a kill-all” – Paul Collier
1 2 3 4 5 6 7 8 9 10
10 10
“Let China sleep; when she wakes, she
will shake the world.” – Napoleon, 1817

17. 17
0
75,000
15,000
55,000
5,000
80,000
20,000
60,000
10,000
90,000
85,000
30,000
65,000
25,000
35,000
40,000
45,000
95,000
50,000
70,000
Myanmar
Egypt
Belize
Turkey
Bhutan
Luxembourg
Portugal
Panama
Japan
Singapore
GDP Per Capita, USD
Brazil
Saint Kitts and Nevis
Tajikistan
Qatar
Algeria
India
Suriname
South Korea
Austria
Taiwan
Malta
Macao
Germany
Fiji
Switzerland
Romania
Oman
Equatorial Guinea
Mexico
Greece
Mongolia
China
Ukraine
Ireland
Italy
Lebanon
Cameroon
Latvia
Botswana
Laos
Lesotho
Cyprus
Poland
Malaysia
Albania
Hungary
Trinidad and Tobago
Norway
Israel
Finland
Seychelles
Argentina
Bulgaria
Paraguay
Netherlands
Cape Verde
France
Slovenia
Peru
Chile
Iceland
British Virgin Islands
Sri Lanka
Denmark
Sweden
Costa Rica
United Arab Emirates
Dominica
United Kingdom
Australia
United States
Jamaica
Zambia
Guatemala
New Zealand
Montserrat
Uruguay
Rwanda
Gabon
Curacao
Venezuela
South Africa
Tanzania
Bermuda
Guinea
Mali
Benin
Cayman Islands
Turkmenistan
Zimbabwe
Liberia Sierra Leone
Negative
Growth
No
Growth
Slow
Growth
5-10 x
Growth
More
than 10x
More
than 20x
10 countries experienced negative growth over
this period of time (7 were from Africa):
Democratic Republic of Congo; Haiti; Central
African Republic; Turks and Caicos Islands;
Niger; Sierra Leone; Afghanistan; Djibouti;
Liberia; and Zimbabwe
However, it is the countries that have experienced no or negative
growth that have really struggled
There is a fable that highlights the power of growth. It is about the inventor of the game chess showing the game to the emperor. The emperor was so impressed, he said: “name your reward?” to which
the man responded: “I only wish for one grain of rice for the first square and then keep doubling that number for each of the remaining squares”. The emperor agreed, and was shocked by how
little the man was asking for. This was of course until one of the emperors' advisors informed him that this would be 18 quintillion grains of rice, a number that would take many centuries to grow!
1 2 3 4 5 6 7 8 9 10
GDP per capita between 1950 and 2017 by Country, USD
“The last 3 decades saw a reversal of roles between Africa & Asia: in the 1970’s, 11% of the world’s
poor were in Africa & 76% in Asia. By 1998, Africa hosted 66% of the poor & Asia’s share had
declined to 15%. Clearly, this reversal was caused by the very different aggregate growth
performances. Poverty reduced remarkably in Asia because Asian countries grew. Poverty
increased dramatically in Africa because African countries did not grow. As a result, perhaps the
most important lesson to be learned … is that a central question economists interested in human
welfare should ask, therefore, is how to make Africa grow.” – Xavier Sala-i-Martin

18. Headline: Extreme poverty is a problem for select few (26) countries
that need peace, more than just foreign aid and good governance (1/2)
1 2 3 4 5 6 7 8 9 10
Over the past 200 years, those living in extreme poverty has gone from almost 9 in every 10 people, to less than one in ten; and this has happened while the
population has grown x7 from around 1 bn to now over 7.5 bn. This miraculous change has occurred with GDP per capital (one somewhat useful metric for
understanding quality of life) growing from $605 to $15,469 (a growth rate of 1.7% p.a). This change is so phenomenal that I dare it might just be worth pausing
for a moment of gratitude given that most us today can live far better than royalty did just 200 years ago. Not to mention that by almost ever metric (on average)
life is better, and no longer what Thomas Hobbes described as: “solitary, poor, nasty, brutish, and short”.
The homework question for us today, however, is around the one in ten who live on less than $1.9 a day (a starkly similar amount to our relatives two centuries
ago). Around half of these people live in just three countries – India (218m), Nigeria (86m) and the (un)Democratic Republic of Congo (55m). However, this is not
the 80:20 I would like us to focus on given that Nigeria has been growing rapidly (e.g., between 2000 and 2018 GDP per capita grew from $568 to $2008, a 7.3%
growth rate – a rate which will mean GDP per capita will double every 10 years – yes, quality of life for people in Nigeria will double on average every ten years!)
and so too has India, at 8.8%. While some will criticize the importance of economic growth, as the economist Paul Collier says: “growth usually does benefit
ordinary people .. growth is not a cure-all, but the lack of growth is a kill-all”. The focus will however be on those people living in countries that have experienced
negative, no or very slow (below global average) growth over the last 70 years and then have a GDP per capita below 2,700 (a number, while arbitrary,
considered at which below this democracy is extremely fragile). The 27 countries in the group, are made up of around 400m people, of which 180m , so almost
half are in extreme poverty.
Given what the great (maybe the greatest) economist F.A. Hayek said: “the curious task of economics is to demonstrate to men how little they really know about
what they imagine they can design”; these slides do not attempt to be dream up a Big Plan for what these countries should do, but rather seeks to answer a
number of topical questions around three themes – peace, more than just foreign aid, and good governance. This is further emphasized by the economics
professor Bruce Wydick who said: “when it comes to development and poverty interventions, trust me, we are all learning”.
• Foreign Aid: Can foreign aid make “poverty history”? No. As William Easterly says: “only the self-reliant efforts of poor people and poor societies
themselves can end poverty .. but aid that concentrates on feasibly tasks will alleviate the sufferings of many desperate people in the meantime”. A focus
should be on (a) ensuring aid is channeled to these countries and people that need it most; and (b) increasing the ROI from this money. Note, that aid is still
far less (some say less than half) the money that is sent back in remittances from migrants in developed countries; so more pro-immigration policies from
South-North (as well as a number of other policies) would go a long way. In fact, aid only made up ~5.7% of total government budgets for the 54 countries in
Africa (2003). Growing skepticism and disillusion around aid being the panacea has resulted in the common quip that foreign aid is ‘poor people in rich
countries giving money to rich people in poor countries’.
A
10 10

19. Headline: Extreme poverty is a problem for select few (26) countries
that need peace, more than just foreign aid and good governance (2/2)
1 2 3 4 5 6 7 8 9 10
• Conflict & Civil Strife: Should countries and multilateral institutions (e.g., UN) intervene to provide security when it breaks down? Yes. Conflict is
usually ghastly and devasting from a human point of view and also an economic one (costing ~$64bn on avg. per civil war; a decline in an economy of around
~15%). Moreover, the poorest countries often are the most unstable e.g., in it’s 200 year history Haiti has had almost 200 civil wars, coups, and insurrections.
Not to mention, countries that have just come out of such conflict have a more than one in three chance over going back into conflict over a 10-year period.
Given this, peacekeeping has a 4:1 return; and this is a policy intervention that should be explored further (quality improvements and quantity of investment).
• Corruption: Is this still an issue and is it really that bad? Yes. Indeed crime does not pay as well as politics in some cases. Let’s use Haiti as an example.
The Duvalier dynasty that lasted for 29 years from 1957 until 1986 under the father and son dream team of Francois (Papa Doc) and Jean-Claude (Baby
Doc). According to William Easterly: “the income of the average Haitian was lower at the end of the Duvalier era than at the beginning. Half of all children did
not go to elementary school when Papa Doc came to power; half of all children were still out of school when Baby Doc left power. The Duvalier dynasty was
only the latest installment in a toxic history”. Papa Doc was said to have embezzled $800 million USD (over 1/3 of the countries GDP upon his departure).
Just over two hundred years ago Haiti was one of the richest places in the world, providing 60% of the world’s coffee.
• Democracy: Is democracy a good thing in a fledging, underdeveloped country? Yes. In What Makes Democracies Endure? the author states that “a
democracy can be expected to last an average of about 8.5 years in a country with a per capita income under $1,000 .. above $6000, democracies are
impregnable”. Yes, for poor countries democracies are fledging. And while not an end in and of themselves, democracies are very strongly correlated with
good governance (William Easterly), a “boon for human rights and a barrier against large-scale killing, torture, and other abuses by the state” (Jeffrey Sachs)
and when you don’t have democracy the overwhelming majority of times you end up with a gangster (think Saddam Hussein) rather than a benevolent
dictator (think Lee Kwan Yew).
• Private sector: Is the private sector critical for driving growth in these contexts? Yes. Most of these countries have really poor Doing Business scores –
that is, it is incredibly difficult to do business and let the “invisible hand” work. Both getting out of the way of private enterprise e.g., through reducing red tape;
and stimulating the private sector e.g., through providing basic public goods such as roads; can go a very long way to stimulate the economy.
While a firehose of information, this is a truly wicked problem. And thus, not an easy nut to crack. It will require a wide variety of factors to come together for these
26 countries and the 400m people living in them to experience and maintain economic growth for a number of decades to pull them out of the 1800s and into the
2000s. Amen to that!
B
C
D
E
10 10

20. 70,000
8,000
-1,000
75,000
30,000
3,000
65,000
40,000
5,000
2,000
1,000
0
10,000
15,000
0
95,000
20,000
25,000
35,000
45,000
50,000
Economic growth, %
GDP per capita
GDP per capita growth vs. GDP per capita, PPP, 1950-2017 Assessment of Countries by GDP & Growth, 2017
GDP
per
capita
(where
are
we
today)
Growth
(are we heading in the right direction)
Negative, No, Slow Global Average of Above
Below
$2,700
Above
$2,700
In trouble, need a leg up Growing, but still poor
Work required, affluent but
not trending in the right
direction
Shooting star, affluent and
getting more so
42% 41%
17% 0%
26 countries are below a GDP per capita of $2,700 and have
experienced –ve/no growth over the last 70 years
1
1 2 3 4 5 6 7 8 9 10
“Poverty is unquestionably one of the most merciless forms of violence and injustice
in the world, and it invariably leads to a plethora of human rights catastrophes” –
Siddharth Kara
10 10

21. We will now look at these 26 countries through the lens of 5 themes:
conflict, foreign aid, corruption, democracy and the private sector!
2
1 2 3 4 5 6 7 8 9 10
284%
Guinea-Bissau
-61%
Ethiopia
Madagascar
199%
Uganda
Rwanda
Nepal 369%
Gambia
Mozambique
118%
Tanzania
74%
Guinea
Mali
69%
Yemen
Togo
Niger
Benin
Burkina Faso
222%
Malawi
Afghanistan
Burundi
Chad
Zimbabwe
240%
Liberia
-23%
Sierra Leone
Central African Republic
80%
Haiti
Democratic Republic of Congo
-5%
98%
83%
-40%
77%
5%
76%
47%
16%
15%
7%
-4%
-21%
-39%
-24%
Population,
millions
Poverty rate,
%
GDP per capita,
2017
$2,720
$1,591
$1,668
$1,998
$1,377
$1,802
$2,479
$2,282
$2,334
$1,592
$1,850
$1,566
$2,114
$2,644
$1,628
$1,038
$800
$1,308
$1,872
$761
$1,900
$1,394
$909
$727
$1,669
$760
FDI,
millions, 2019
$1892
$24923
$229
$2631
$42893
$14317
$21824
$4738
$4971
$7733
$1942
$1619
$2433
$443
$2664
$1513
$228
$6495
$5713
$8862
$1595
$2084
$7011
$684
$1925
$25622
Democracy index, 2019
(full democracies are 8-10)
5.28
3.44
2.63
3.16
3.65
5.02
5.16
3.14
4.92
5.64
1.95
3.3
5.09
4.33
4.04
5.5
2.15
1.61
3.16
5.45
2.85
4.86
3.29
1.32
4.57
1.13
Corruption Perception index,
100 is very clean; 0 is highly corrupt
34
37
18
53
26
28
37
29
29
24
15
29
41
37
40
31
19
20
24
28
16
33
32
25
18
18
24.82
64.17
1.28
8.28
18.13
23.96
33.71
8.35
10.05
15.74
17.5
4.71
6.62
1.37
11.59
11.56
6.62
7.94
11.82
2.7
23.9
4.82
10.95
3.94
7.64
51.85
54.50%
67.10%
15.00%
27.30%
62.40%
76.60%
55.50%
41.70%
25.00%
49.10%
35.30%
49.70%
38.40%
77.60%
18.80%
49.20%
49.50%
10.10%
43.70%
44.50%
70.30%
71.80%
21.40%
40.90%
40.10%
66.30%
GDP growth,
1950-2017
10 10

22. From a human point of view, wars are devastating and ghastly. They
also cost ~$64bn on avg. and annually costs equate to x2 global aid!
Reduce
(Risk of) War
Improve ROI
of Aid
Reduce
Corruption
(a lot)
Improve
Democracy
Stimulate
the
Economy
“Low income and slow growth make a country prone to civil war … in
part because low income means poverty, and low growth means
hopelessness” – Paul Collier
State-based Conflicts Continue to be a Real Threat, # & type
of conflicts, 1946-2016
A Conflict can Reduce the Economy of a Country by ~15%
Hypothetical Example if Liberia was to Grow at the Avg. Global
Growth Rate vs. Falling into Conflict, GDP per capita
Liberia 2027 (Global
Growth, 3.4%)
Liberia 2020 Liberia 2027 (Conflict, -2.7%)
$704
$890
$581
-17% +26%
The Focus Countries have a 1/6 chance of Experiencing Conflict p.a.
Risk of Conflict at Different Growth Rates Over 5-Year Period, %
Global Growth
Rate, 3.4%
14.0% 13.6%
Risk of Civil
War for Low-
Income Country
26 Focus
Countries,
Historical Growth
Rate, 0.41%
0.2%
10.6%
China Growth
Rate, 1990-
2015, 13.8%
15.4%
Growth Rate
of DRC
(1950-2017),
-1.4%
35
25
45
5
30
0
20
10
15
40
50
55
1956
1946 1966 1976 1986 1996 2006 2016
Civil conflicts with foreign state intervention
Colonial or imperial conflcits
Conflicts between states
Civil conflicts
“Rebel leader Laurent Kabila, marching across Zaire with his troops to seize the
state, told a journalist that in Zaire, rebellion was easy: all you needed
was $10,000 and a satellite phone” – Paul Collier
3
1 2 3 4 5 6 7 8 9 10
10 10
“A 2016 RAND study found, after just one year of a severe non-nuclear war [btw USA and China], American GDP could decline
by up to 10 percent and Chinese GDP by as much as 35 percent – setbacks on par with the Great Depression” – Graham Allison
“Only the dead have
seen the end of war”
– George Santayana

23. Peacekeeping (that maintains post conflict peace) is one such public
good that has a very high ROI – better than 4:1
Reduce
(Risk of) War
Improve ROI
of Aid
Reduce
Corruption
(a lot)
Improve
Democracy
Stimulate
the
Economy
“After Iraq it is difficult to arouse much support for military intervention .. I want to persuade you that external military intervention has an
important place in helping the societies of the bottom billion, and that these countries’ own military forces are more often part of the
problem than a substitute for external forces” – Paul Collier
Globally, peacekeeping has been
on the rise
2
10
16
700
13,700
104,062
1950 2014
1990
UN Peacekeeping Operations around the
World, #
Total Size of UN Peacekeeping Forces, #
While spotty, generally peacekeeping
works
Annual Expenditure on Peacekeeping vs. Risk
of Reversion in Post-Conflict Society, %
$300m
$0 $100m $200m
9%
38%
17%
13%
The British intervention in Sierra Leone is a great
case study of the +ve impact of peacekeeping
 Context: “In 2000 the RUF rebel
movement took five hundred of these
soldiers (UN) hostage and stripped
them of their military equipment. Was
the RUF such a formidable fighting
force?”
 Impact: “Hardly – once a few hundred British
troops arrived a few months later, willing to
take casualties, the whole rebel army rapidly
collapsed .. Operation Palliser was brilliant,
and the British army can be proud of its
contribution to the development of Sierra
Leone. It also serves as a model for military
intervention in the bottom billion: cheap,
confident and sustained”
 Over-the-horizon guarantee: “For the past few
years there have been only eighty British troops
stationed in the country, but the government
has been given a ten-year undertaking that if
there is trouble, the troops will be flown in
overnight”
There are many examples of peacekeeping not
having it’s desired impact; an example being in
Srebrenica in Bosnia in 1995 when Dutch
peacekeepers who were “supposed to be
providing a safe haven but failed to protect the
scared refugees, who were massacred”.
4
1 2 3 4 5 6 7 8 9 10
10 10

24. Foreign aid has been growing quite rapidly as a number of rich
countries target the 0.7% of GNI United Nations target
Reduce
(Risk of) War
Improve ROI
of Aid
Reduce
Corruption
(a lot)
Improve
Democracy
Stimulate
the
Economy
“Aid does tend to speed up the growth process. A reasonable estimate is that over the last thirty years it has added around one percentage point to the annual
growth rate of the bottom billion. This does not sound like a whole lot, but then the growth rate of the bottom billion over this period has been much less
than 1 percent per year – in fact, it has been zero. So adding 1 percent had made the difference between stagnation and severe culumative decline” – Paul Collier
Official Dev. Assistance (ODA)
has been growing, billions
75
119
153
2000 2009 2019
3.8% p.a.
8%
36%
53%
Humanitarian aid
3%
Net debt
forgiveness
grants
Multi-
lateral
ODA
Bilateral
Development
Projects
And the OECD now gives 40 cents out of every $100 as foreign aid, with a # of countries giving at
or above the 0.7% UN target
1.11
1.00
0.94
0.75
0.70
0.70
0.65
0.54
0.49 0.44
0.41 0.38
0.33 0.33
0.26
0.26
0.25
0.25
0.25 0.20
0.18
0.18
0.17
0.14
0.14 0.14
0.13
0.13
0.12
Denmark
Germany
Japan
Netherlands
Switzerland
Belgium
Korea
Finland
Hungary
Slovenia
France
New
Zeland
Ireland
Canada
Italy
Australia
Iceland
United
States
Portugal
Austria
Czech
Republic
Greece
Norway
United
Kingdom
Poland
Slovak
Republic
Sweden
Luxemborg
Spain
UN target 0.70
Average country effort 0.40
5
1 2 3 4 5 6 7 8 9 10

25. “Australian ophthalmologist Fred Hollows traveled to Nepal and Eritrea in the 1980s and
was struck by the number of people blinded by cataracts and other treatable eye problems.
From then until his death in 1993, he worked tirelessly to bring simple sight-restoring
procedures to people who would otherwise have not had access to them. A year before he
died, knowing that he had cancer and not much time left, Hollows and his wife, Gabi, set up
the Fred Hollows Foundation to carry on his work. By 2003 the foundation had restored
sight to a million people, at a cost of roughly $50 per person. It’s easy to appreciate that
being blind in a poor country, where there is little support for people with disabilities, is
significantly worse than being blind in a rich nation. Restoring sight not only greatly helps
the individual person, it also enables him or her to contribute once against to his or her
family or community. In India, according to one study, 85% of men and 58% of women who
lost their jobs because of blindness were able to regain employment after their sight had
been restored. In the case of children, preventing or overcoming blindness can be
lifesaving; studies show that children who become blind are much more likely to die within
the next year than other children. Those who survive are unlikely to be able to attend
school.”
- Peter Singer, The Life You Can Save
10 10
1 2 3 4 5 6 7 8 9 10

26. While generally positive, foreign aid is not the only lever than can
be pulled, with remittances being more than x2 the amount given
Reduce
(Risk of) War
Improve ROI
of Aid
Reduce
Corruption
(a lot)
Improve
Democracy
Stimulate
the
Economy
Remittance inflows matter a great deal for a # of countries. For example, for Haiti remittances are about one-third of the GDP. For Nepal this is about the same, while in
Liberia is above one-forth.
South-North Migration is
hugely beneficial
Australia
28%
Britian
Canada
22%
USA
14% 13%
23%
6%
37%
35%
North-
North
South-South
North-
South
South-North
As to have international resource flows to developing countries, with AID being less than half the
size of remittances and less than a third of Foreign Direct Investment (FDI), 1990-2011, trillions
1.0
0.5
2.0
0
1.5 Long-
Term
loans
FDI
ODA
Non-DAC development cooperation
Short-term loans
Development finance institutions
Portfolio equality
Remittences
Other official flows
International Migrants, 2015
Foreign-born Population, % of total
6
1 2 3 4 5 6 7 8 9 10
10 10

27. Please click →
https://www.hughskillerideas.com/kapows
To Read the rest & hang out with
these legends (I wish), please visit
Hugh’s Killer Ideas. Peace.