Grumble....mumble....work....waking up early...coffee not working yet....ah yes, the joys of returning to work after an extended vacation. Simply marvelous. Thank Vishnu I didn't have to work yesterday, that would have been even worse.
This latest news brings me to a story read recently at the Australian by Don D'Cruz- Free Trade More Precious than Foreign Aid
"Setting aside the emergency relief being rushed to tsunami survivors, which is vital and absolutely necessary, foreign aid has, in general, not been very effective. Indeed, if the aid industry's effectiveness was judged by its success in poverty alleviation, it would have been shut down years ago. . . .
Aid is only a part of the development picture. For instance, while ODA flows stand at about $US63 billion ($80.8 billion), foreign direct investment has in recent years been twice the level of aid flows. Even remittances from workers employed abroad are worth about $US80 billion to the developing world. Moreover, most capital accumulation comes from domestic sources rather than from abroad. Indeed, economic growth is largely about freeing up local equity and getting locals to invest locally.
The true insignificance of aid is revealed by the fact that trade contributes almost $US1.7 trillion to the developing world, making free trade an imperative – hence the emergence of the slogan "trade, not aid"."
I had spoken to a few friends over the weekend about the Tsunami, and most agreed that the best thing that can happen for the survivors in the area, once the immediate dangers have been safely overcome, is to see their tourism industries return to pre-disaster levels. Much like people from New York were telling others to come and spend money in New York after 9/11, the thing that will help out these regions the most is if more people come there and spend money. Someone stated they had seen a picture of a tourist tanning on a beach in Thailand somewhere while a corpse was in the background rotting away. I guess there is a time and place for everything, and I imagine my vacation would be cut short if I had planned on spending the New Years in the tsunami-devastated areas, and ideally would have been able to help in some way other than just sending money. But the point is that the one thing that the majority of these islands depend on to generate income is tourism. And once they get back on their feet, they need to get people to come back.
The Instapundit continues on the Australian piece and tags along a supporting article by Jim Klauder at the San Francisco Chronicle- Ignorance Shrouds Capitalism's Profound Impact on Reducing Poverty-
"One big reason people in more advanced societies are able to enjoy a more comfortable existence is that they are able to purchase items by going into debt. Americans take that for granted. Any person living in absolute poverty would love to trade positions with any one of us and walk in our shoes -- to have a job and be able to borrow money for a car or a home.
It's a shame that America's youth do not understand these basic economic concepts. If they did, they'd be less inclined to join globalization protests because they would understand why the economies of China and India grew by 8.8 percent and 6 percent, respectively, last year.
In fact, the recent success of developing countries at fighting poverty could be an Economics 101 lesson for today's American classroom. In East Asia and the Pacific region alone, the number of poor dropped from 472 million in 1990 to 271 million in 2001. By 2015, that number should shrink to 19 million, according to the World Bank.
The bank predicts that the total number of those living in poverty will be halved between 1990 and 2015. Globally, that means that those living on $1 per day or less would drop from 1.2 billion in 1990 to 622 million in 2015.
It is undeniable that 2004 was a great year for the poor. The World Bank's prediction that global poverty will continue plummeting is particularly encouraging. But if we are ever to wipe poverty from the face of the Earth, our next generation of leaders must first understand what makes the global economy tick -- the fundamental relationship between free trade and economic growth."
So, perhaps next year for the holidays I plan a trip to Thailand? Maybe a jaunt down to Sri Lanka? How about a visit to Malaysia? Sounds like it could be fun. And as has been shown previously, you can do you part to help the economy there by well, spending your money!!
Happy New Year Everybody!!!