Just like in harvests, severe economic and political limitations restrict the income of individuals around the world, as well.
Case in point:
Within India – $1trillion economy 1billion individuals – $1000 per capita
Overseas Indians: $350 billion annual income 20 million individuals – $17500 per capita
(rough figures, not adjusted for PPP)
As far as I know, there has been no large-scale blood transfusion/brain transplant in Indians overseas. It’s the institutions and policies for the most part that account for the staggering difference in per capita incomes/output.
chicagotribune.com
The best land for farming corn, wheat and soybeans looks remarkably the same around the world, though the results could hardly be more different.
From the Argentine pampas to western Ukraine to central Illinois, the topsoil is flat, dark and deep. It retains moisture but drains well. It can be tilled without forming a crust or blowing away on the breeze. More often than not, it gets favorable weather. And it recovers quickly from the abuses of mankind.
If the world is going to grow enough food to meet rising demand, these acres must produce more. Yet in many countries where the blessings of sky and earth combine, farmers labor under severe economic and political limitations. Crop yields vary drastically even with identical weather and soil conditions. So Ukrainian farmers produce a fraction of what their U.S. counterparts grow on comparable land.
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From a sound economic point of view, it is more effective for governments to make direct cash transfers or provide vouchers to the poor than to mess with the price mechanism this way. Government-induced price distortions always end in more tears for the poor. Politicians around the world seems to have trouble with the concept of opportunity cost.
via International Herald Tribune
So far, the strikes have cost Argentine farmers US$2.3 billion in missed soy, wheat, corn and sunflower seed sales, said Pablo Adreani, an economic analyst with AgriPAC Consultores, a Buenos Aires consulting firm.
“The fact that we’re even considering a crisis amid this historical commodities boom makes no sense,” said Gabriel Torres, a senior analyst at Moody’s Investor Services in New York. “It tells you how incredibly self-inflicted this is.”
Had the government taxed rising farm income at its previous rate(35% instead of the current 46%), the windfall could have financed needed utilities and energy sector infrastructure or funded programs for the country’s 10 million poor, analysts said.
“The opportunity cost of this paralyzed economy is huge,” said Ricardo Baccarin, chief analyst at Paniagricola S.A., a Buenos Aires grain brokerage. “There’s practically a complete paralysis of commercial activity.”
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Solutions are known, it is the execution/implementation which is a problem
Executive summary via World Bank
Where is the Wealth of Nations?
Answering this question yields important insights into the prospects for sustainable development in countries around the world.
Bottomline: The evidence in this volume suggests that investments in produced capital, human capital, and governance, combined with saving efforts aimed at offsetting the depletion of natural resources, can lead to future welfare increases in developing countries.
Entire report here – Measuring capital for the 21st century
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