The end of poverty

I'm currently reading a book called "The End of Poverty," which was written by Jeffrey Sachs, who was a special advisor to former UN Secretary General Kofi Annan. He's passionate about ending poverty, but he takes it from the World Bank point of view, which I don't necessarily agree with, but it's always good to know what people who don't agree with you are saying.

One of his passages stood out to me:

"Many people assume that the rich have gotten rich because the poor have gotten poor. In other words, they assume that Europe and the United States used military force and political strength during and after the era of colonialism to extract wealth from the poorest regions, and thereby to grow rich...However, that is not at all what happened...Every region of the world experienced some economic growth...but some regions experienced much more growth than others. The key fact of modern times is not the transfer of income from one region to another, by force or otherwise, but rather the overall increase in world income, but at a different rate in different regions."

He excuses US and European imperialism by saying that every economy in the world still grew during that period. While he does go on to say that the rich are not innocent of exploitation, he is attempting to shrug off responsibility for the gap between the rich and the poor on behalf of the US and Europe. So what if there was still economic growth under American and European colonialism? What good is a colony to an empire if it dies? There is inherent self-interest for the ruling state to keep the oppressed state somewhat intact and self-sustaining because the ruling state benefits from it staying just strong enough to continue to export its resources out to the rich. That was the mistake of the industrialists in the early 20th century. They thought they could act like locusts and not worry that eventually, the masses would either die out or fight back. Luckily for us, the masses decided to fight back instead of die out.

This actually applies to Vietnam as well. In the course of this disgusting war about the Little Saigon name, I've had some really good conversations about what is best for the future of Vietnam from the Diaspora perspective. I met one woman who absolutely felt that we should promote international trade and foreign investment into Vietnam (and I know many of younger generation actually agree). I argued back that this form of foreign investment is modern day colonialism. Countries like Vietnam are relying on foreign capital to infuse their own economy, while not actually having anything solid to support itself beyond this foreign capital. Imagine if one day, all of the foreign investment just stopped. Would Vietnam cave in on itself? Some would argue that Vietnam would have to take the capital earned from foreign income to develop its own economy, but the nature of business is to generate profit. Would foreign investors continue to put their money into Vietnam if it went to developing the country instead of lining up their own pockets? I think not. That is where the downward spiral lies.

Step 1. Foreign investors put money into Vietnam so that they could utilize Vietnam's resources.
Step 2. Vietnam has to reinvest that foreign capital back into the industries that were brought into Vietnam.
Step 3. Profit generated from those industries goes back to the companies. Vietnam takes a miniscule portion of that via taxes.

The people are never brought into this cycle. Yes, they get jobs that pay them meager salaries, and even if it is relatively higher than other jobs in the country, it will never actually be enough to boost an entire nation. Yes, the economy of the country may show a bit of growth, but is it true growth?

This form of economic development is nothing more than an illusion. This foreign investment policy creates an image of prosperity, a bubble if you will, that can and will pop. Vietnam needs a self-sustaining economy and developed infrastructure to truly survive as an independent nation.