Private Investment to the Rescue
Collier advocates that the answer is private capital investment; private capital investment in Asia has been huge, and has resulted in huge productivity gains for its populace; however, the level of private capital investment in the countries of the bottom billion has been extremely fickle. Thus, another huge challenge; how can we prod private investment in sustainable industry in a place where the lack of transparent governance and rule of law makes this very investment so unlikely? How can we connect these two side of an unanswerable equation?
“Historically, part of the answer (to the lack of investment) has been poor governance and policy. Obviously, this does not impede capital inflows for resource extraction-hence Angola-but it has curtailed the footloose investment in manufacturing, services, and agribusiness...the problem is that even reforming countries are not attracting significant inflows of private capital...the answer is that the perceived risk of investment in the economies of the bottom billion remains high...the problem for the reforming countries of the bottom billion is that the risk ratings take a long time to reflect turnarounds.” And thus, when we monitor global events and consider the recent upheavals in previously “stable” nations such as Malawi, and a bit longer-span-wise in Coite D'Voire, and recently in the United States and Europe, it is no surprise that the lack of serious, long-term, private investment is a problem that will not vanish anytime soon.
“Let me be clear: we cannot rescue them. The societies of the bottom billion can only be rescued from within. In every society of the bottom billion there are people working for change, but are usually defeated by the powerful internal forces stacked against them. We should be helping the heroes...” (96)
