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How Rich Countries Got Rich … and Why Poor Countries Stay Poor

Article in Journal of Contemporary Asia · November 2010

DOI: 10.1080/00472336.2010.507069

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How Rich Countries Got Rich … and Why Poor Countries Stay Poor
Ibrahim Ndomaa
a
Department of Administrative Studies and Politics, University of Malaya, Kuala Lumpur, Malaysia

Online publication date: 09 September 2010

To cite this Article Ndoma, Ibrahim(2010) 'How Rich Countries Got Rich … and Why Poor Countries Stay Poor', Journal of
Contemporary Asia, 40: 4, 690 — 693
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URL: http://dx.doi.org/10.1080/00472336.2010.507069

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 690 Book Reviews

the individual to Western eyes. This is what makes governing a nation such as India
such a ‘‘delicate, if not critical task,’’ as put forward by Edmund Burke in his speech
on Mr Fox’s East-India Bill (see p. 55).
Nature, another of Kerr’s representative tropes, has also been historically linked
with British literature. The Cotswolds, White Cliffs of Dover, plush gardens or the
rolling countryside are images of romance, meditation, joy and family memories for
the British. With reference to the Asian-other, however, a much different picture is
oft portrayed. The jungle is seen as a place of war between nature and culture.
History is most clearly constructed in the images of ruins. Take the Khmer temples
at Angkor, for instance. Somerset Maugham, Hugh Clifford, Andre Malraux or
Leonard Woolf all appear to take a melancholy satisfaction in the defeat of the
handiwork of humans by the irresistible forces of nature. The desolation,
disfigurement and transformation become part of the beauty of the Orient for
them. The triumph of Empire is then put forward by John Flory in Orwell’s novel,
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Burmese Days, by imagining the jungle, villages, monasteries and pagodas all
transformed and replaced by an orderly , amenable suburbia.
Kerr helps us to re-learn that there is nothing new in the Western vision of the East
as a place of terror and chaos. As argued today by the neo-con elements, but also
imbedded to a degree in the mindset of the American people, the East is inherently
incomplete, unruly and immature. It needs completion, correction, education,
democracy and discipline. Or to paraphrase General Westmoreland, if we have to
kill them in order to save them, then so be it.

Herb Thompson Ó 2010

Perth, Western Australia
Email: herbietea2001@yahoo.com.au

DOI: 10.1080/00472336.2010.507067

How Rich Countries Got Rich . . . and Why Poor Countries Stay Poor
Erik S. Reinert (New Delhi: Anthem Press, 2008)

The wealth and poverty of nations has long been accepted as a normal phenomenon
in economic development. However, questions have been ceaseless with regards to
the rationale behind these inequalities. Well-known economists and political
economists, such as Kuznets, Frank and Wallerstein, have delved into these
international discrepancies, yet economic principles and practices have continued to
exacerbate the huge divide. Many economists and political economists have tried to
explain and proffer solutions on catch-up strategies, raising questions about the
interplay of uneven distribution in living standards and the relative shares of
industry and trade in determining national wealth and poverty. Yet, instead of
witnessing economic growth and development, countries have continued to be
enmeshed in intense poverty and dependence. This provides the avenue to question
economic orthodoxy which has been strategically designed to create winners and
losers in the global economy.
 Book Reviews 691

There seem to be unfair principles and practices imposed by rich countries on poor
countries, enhancing what Frank described as the development of underdevelopment
among nations. The production and export of manufactured goods by rich countries
and the export of raw materials from poor countries is one of many examples of the
mechanisms that provides rich countries with enormous economic preponderance
over poor countries. It is on this note that Reinert sets out to advocate the need for
all countries, particularly the poor, to have the liberty to practice economic
principles that best adhere to their developmental needs rather than have some other
countries set economic standards regardless of any understanding of varying
economic conditions.
Specifically out to set a new thinking towards economic development, the book is
organised in eight chapters with an introduction that coherently examines the
physiocracy of economic thinking which has had enormous influence on current
economic paradigms. This argument is strengthened in chapter one through a closer
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look at various economic theories, all of which have contradictory connotations

and which serve to underpin both wealth and poverty amongst nations. Chapter
two moves on to provide the genealogy of economic theories from Adam Smith to
David Ricardo and subsequently the outgrowth of the Ricardian right who believe
in the magic of the invisible hand of the market and the Ricardian left, who believe
in practical and planned economic principles. Chapter three lucidly provides
varying dynamics which served as the linchpin that propelled rich nations to their
economic prosperity. Using Ricardo’s trade theory, chapter four highlights the
contributions of globalisation as factors that undergird uneven distribution of
wealth which consequently institutes economic development as well as its
concurrent economic regression amongst countries. Chapter five provides a clear
rationale as to why poor countries get even poorer due to the premeditated
economic principles applied by rich countries and the forceful inclination of poor
countries to solely rely on exports of raw materials and agricultural products as
against the main driver of economic growth and development – manufacturing.
Chapter six discusses the dynamics of economic policies as well as its accompanying
unintended consequences, while chapter seven assesses the implications of the
Millennium Development Goals, which only adds insults to injury by ignoring the
need to promote the industrial production structures that are most essential for
poor countries. Chapter eight concludes the book with strategies and empirical
evidence on getting economic activities right, while further theoretical clarifications
are provided in six appendices.
The book is a wholesome contradiction of neo-classical and Washington
Consensus arguments for free trade, trade theory and comparative advantage
which, for decades, have been the sermon of rich countries. Reinert is concerned
with why these principles have been so glorified and highly recommended by rich
countries, while their practice is just the opposite. Reinert sees all these, as well as
the Millennium Development Goals as mere strategies to eliminate any avenue for
industrial catch-up and the furtherance of what he calls retrogression or
primitivisation. One might think development and underdevelopment is a game
of chance; however, as H. J. Chang in Kicking Away the Ladder: Development
Strategy in Historical Perspective (London: Anthem, 2002) coherently explains, it is
 692 Book Reviews

simply a premeditated strategy to keep the poor poor and to make the rich
even richer.
Reinert says that if they ever aspire to develop, it is high time for poor countries to
do the opposite of what they have been directed to do for decades. They must be
protectionist, move from being suppliers of agricultural products and raw materials
to industrialisation, with the state overcoming the power of markets. As well-known
analysts like Robert Wade, Alice Amsden and Chalmers Johnson have shown, such
strategies have been the escape route for late-comer economies and also the linchpin
for the presently developed economies. Sadly, the IMF and World Bank have
earnestly used all kinds of mechanisms to prevent poor countries from escaping the
traps of poverty and dependence.
This is why the dependency theorists, like A. G. Frank and Samir Amin,
advocated that poor countries ‘‘de-link’’ from the global economic system. This
strategy is all but impossible owing to the inextricable global linkages that
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guarantee countries’ co-existence and why Reinert would rather advocate that
poor countries emulate the framework that made the rich countries what they are
and, hence, ignore what they say. Many will disagree with Reinert, rejecting the
idea of emulation and catch up. Instead, like Mahbub ul Haq, they will argue
‘‘that poor countries should meet their basic human needs within the framework
of their own cultural values, building development around people rather than
people around development’’ (The Poverty Curtain: Choices for the Third World,
New York: Columbia University Press. 1976, p. 2). With Reinert, I concur that
emulation is a necessary pre-condition for industrial catch up; however, is it
possible for the very poor and vulnerable nations to escape the nets of the rich
countries that have the economic wherewithal to capture the unflinching allegiance
of such nations?
From the book, it can be deduced that development is definitely not a game of
chance and passive obedience but a sequence of planning and setting the mechanisms
necessary for development. Reinert does not reject the advantages of free trade and
economic liberalisation; however, industrialisation, protectionism and state inter-
vention are obviously of paramount significance. The book reminds readers of the
wide range of discussions and policy frameworks necessary for understanding
the dynamics behind the poverty and underdevelopment that haunts poor nations.
The rich theoretical and empirical base that supports Reinert’s analysis sets the
book apart.
In as much as it is an awesome intellectual piece, there is a fundamental
shortcoming found within the book. Reinert has unearthed and lucidly addressed the
dynamics of wealth and poverty of nations which are undoubtedly the first point of
call; however, he does not direct his theoretical or empirical searchlight to the
internal political economy of poor nations. Corruption, rent-seeking, cronyism,
mismanagement, political instability, ethic division, wars, and so on, are
synonymous with poor nations and are powerful deterrents of growth and
development. The so-called emulation that he advocates will in no way be successful
with these powerful economic deterrents in place. While he experiments from the
angle of economic preponderance and subjugation of the rich against poor countries,
he should have equally examined the internal problems of poor nations which
significantly contribute to their present state of poverty.
 Book Reviews 693

Even so, Reinert deserves our applause for an unrivalled intellectual monograph
that should change the framework of economic reasoning. By adding light to the
discourse on poverty and development of nations, this is a book that academics,
policy analysts and all those who care to know about the fundamentals of wealth and
poverty of nations cannot afford to do without.

Ibrahim Ndoma Ó 2010

Department of Administrative Studies and Politics,
University of Malaya, Kuala Lumpur, Malaysia
Email: ibrahim.ndoma@yahoo.com

DOI: 10.1080/00472336.2010.507069
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