Poor Countries Are Running Out of Time to Get Rich | Hacker News Reader

Poor Countries Are Running Out of Time to Get Rich

bloomberg.com

30 pointspseudolus17 comments

The article seems to be conflating GDP with GDP-per-capita. A booming population is an easy way to boost GDP, but a lousy way of growing GDP-per-capita. Conversely, there's no reason "poor countries" can't grow their average worker income by investing in education and worker productivity. The idea that developing nations are "running out of time" is ridiculous - time has really been their best friend in growing their average income.

> Conversely, there's no reason "poor countries" can't grow their average worker income by investing in education and worker productivity.

Yes, there is: rich countries, and the vastly higher pay they offer the productive. Poor countries investing this way are largely subsidizing rich countries.

Yes they are sometimes (!) subsidizing rich countries but you are saying that is the only thing that is happening which is completely wrong. Not everyone is leaving their country and even those who leave are willing to support their families with remittances.

80-20 rule applies.

All the brilliant students I studied with left for the US.

Imagine investing in multiple startups and then the Unicorn leaving for the foreign land.

Money invested in every student doesn't return same amount of wealth to the country

Richer countries can selectively skeam the cream at the top.

In the long term, GDP per capita matters but in the short term, you can run ahead of the piper and raw GDP growth is a much better proxy. In developing countries, children become productive fairly quickly and then it takes them quite a long time before you need to worry about the burden of supporting them again.

It's a Ponzi scheme but one that multiple countries have pulled off successfully.

> Conversely, there's no reason "poor countries" can't grow their average worker income by investing in education and worker productivity

Emigration.

A highly educated worker will leave a poor nation and instead work in a rich nation. This is a problem inside of countries too.

Folks from poor parts of the USA move to richer areas to gain a better way of life.

Which actually acts like a transfer of wealth. Education is expensive, and the assumption has always been that educated citizens help grow their economy and country.

But when educated citizens emigrate, their new homes get the economic and cultural benefit of another educated citizen without having to foot the bill for educating them.

Long story short, the emigration of educated citizens makes a country poorer.

The transfer of wealth goes both ways, since expats' remittances are a significant source of income and investment to many developing countries. Return migration is also common, and a very significant source of benefits to the home country. It's pretty much a win-win.

> It's pretty much a win-win.

Even in strictly financial terms this is a dubious claim.

That depends on the fact that rich countries are accepting of migrants, which looks like is reversing in last couple of years in US (which other countries may follow)

Even ignoring international emigration, there's still internal emigration to worry about.

Why do you need to worry about that?

Urbanization can result workforce exploitation, and in large parts of land being drained of it's work-force, driving up the cost of living as more food needs to be imported and as it will be more expensive to get a roof over your head.

It's all a worst-case scenario, of course, but the risk is still there.

Me worry about it? No, I live in a highly educated part of America.

My uncle who lives in Omak, Washington has to worry about it. The brain-drain from rural America into urban America is pretty serious. (And indeed, it was visiting my uncle there which made the situation obvious to me)

Especially as local plants close down and local economies suffer. Young Americans will leave rural areas and go towards more prosperous ones.

-------------

This fundamental mechanic is why poor urban areas (or poor rural areas) get less and less educated. Education only serves to send kids away to richer areas. It doesn't benefit the area where the education takes place.

A highly educated worker will, only sometimes, leave a poor nation and instead work in a rich nation. India has more university graduates than most countries have people. Even if they all wanted to emigrate to a wealthy country, they wouldn't let them all in.

The USA is famous for accepting foreign students and then not giving them a green card. It's basically the opposite of brain drain.

The terrible horror of people in poor countries becoming better educated hand having fewer children.

This is just the usual silliness of acting like maximizing GDP growth, at the expense of all other factors, is a good idea.

Reply on news.ycombinator.com