The Elusive Quest for Growth by William Easterly

[royalfan5]

Subtitled Econmists' Adventures and Misadventures in the Tropics.

This book is a collection of case studies more less on why a lot of World Bank and other initatives to create growth in the 3rd world. It's pretty interesting if you're into that kind of stuff.

[Chuck Bao]

Thanks for the heads up, royalfan. I'll look for it.

The World Bank needs to be held accountable. Personally, I would like to see criminal charges against some of them based on incompetence. And if not that, hanging them up by their thumbnails in the countries where their decisions hurt, not helped, the economic development.

I'm still bloody ticked off at the World Bank and its screwing over Thailand in 1997. It did bail out the Bank of Thailand with the condition that Thailand floats its currency.

That slick move saved the butts of the American hedge funds betting against the baht and set off the Asian economic crisis with currencies of other Southeast Asian countries being devalued or floated one-by-one.

400 million people in Southeast Asia lost a lot in that deal, as did American manufacturers and employees of American manufacturers who have to compete against even cheaper imports.

There was a whole misinformation campaign that started afterwards that covered the World Bank’s tracks – news articles that Thailand deserved it because of corruption, lack of transparency, poor corporate governance and allowing a bubble economy to form. Okay, Thailand deserved part of that criticism, but I don’t think any more than other countries.

Only two years later there was Enron and the Internet bubble and crash. Karma?

The root cause of the Asian economic crisis was China and the fact that China was allowed to devalue its currency in 1995. Yeah, DEVALUE, as if China couldn’t already undercut everyone in the world on labor costs.

Of course, nobody wanted to say no to China back then and be accused of having lost China and its fledgling capitalistic system. China is laughing all the way to that capitalist temple – the bank – today.

The Asian economic miracle is still alive and well today, except now it’s been usurped by the China miracle.

In the mid-90s, I was so optimistic that the Asian economic miracle would spread and all people should have a chance to work their way out of poverty.

It hasn’t worked out that way, yet. But, clearly it’s still all about exports and exporting natural resources is good, but exporting the value-added processed goods is even better.

Returning back to the subject of the book - adventures and misadventures in the tropics – how can African or Latin American companies effectively compete against China and the devalued Southeast Asian countries in processing manufactured goods?

I hope the book puts some of this elusive growth and misadventures in a global context.

Oh yeah, Thailand has already fully repaid all of its debts to the World Bank from the 1997 bailout. The costs have been tremendous, many thousands of multiples of times the short-term profits made by the US-based hedge funds.

The World Bank shouldn’t be promoting a negative-sum game.

Sorry for the very long-winded rant.