The solution to this problem isn’t the opposite of what I have said, powerful countries shouldn’t start working to help low-income countries. Not because I don’t think it would help (it would) but because I don’t think they will. It would be ridiculously hard to convince those in power of wealthy countries to focus resources on poorer countries. I don’t blame them either, it is challenging to balance resources between those abroad and your own citizens.
My solution, therefore, is an ASEAN/ EU type bloc, but for countries who are most affected by things like recessions, pandemics, global warming etc. The best way to describe this club of countries would be to use an analogy and compare it to a market situation:
One of the reasons why smaller companies within a market merge together is to gain market share against a dominant firm. These companies would be better off together than apart. They would be working together to make profit and together they would have far more influence within the market. Had they not merged they would be in competition with each other AND the dominant firm leaving each individual company with less.
The countries who are most affected and not getting necessary help from richer countries will be able to pool resources and money together to have more influence to buy vaccines, PPE, ventilators etc. They would be fighting against the dominance of high-income countries by increasing their influence in the global vaccine market and not having to rely on the altruism of the wealthy countries. Furthermore, not only will the bloc give low-income countries more influence in the ordering of vaccines, but it would also increase their economic possibilities. The advice from institutions like the World Bank and the IMF is to use the philosophy of “comparative advantage”, in other words produce what your best at producing and trade this with other countries. The economic thinking behind this theory is not wrong, however it is limited. Low-income countries focus too much on trading with wealthy countries that they don’t invest as much in their infrastructure such as Education, roads etc. The low-income countries are at the mercy of richer countries, there is no reciprocity between them and no seeking for mutual benefit, apart from the money richer countries pay for the products or services that the wealthy countries are paying for. You could also argue that the one of the reasons rich countries buy from low-income countries is to capitalise on the low wages of workers. It is often said that labourers do not directly benefit from free trade, the effect on US workers because of the China shock are examples of this. This isn’t the relationship that will lead to an increase in economic growth for low-income countries. With a new bloc of low-income countries working together to trade resources in a way that is mutually beneficial we will start to see economic growth because of an increase of investment within infrastructure as well as trade. This system will benefit both workers and business owners.
One troubling aspect of this solution, however, is that many low-income countries are impoverished because of despotism, corruption, and dictatorship. If left alone without suitable guidance and authority, we may see this bloc become rather unstable. Furthermore, because countries with dictator-like-leaders are protectionist, we could see a low take up in offers from those types of countries. Therefore, I also propose that the United Nations, World Bank, and IMF create a subsidiary for this bloc. This subsidiary will be able to provide incentives for countries to join the bloc such as also ordering vaccines and distributing more to countries (alongside the collective buying of the bloc), financial incentives, and investment within health infrastructure such as ventilators etc. Certain rules will also be put in place that countries will have to follow to join, some examples may include a certain amount of GDP be invested in “health infrastructure”. Many other rules could be taken from blocs such as the EU and used within this low-income country bloc. The subsidiary will also uphold these rules and threaten to take investment away from countries if they break these rules.
Overall, the core of my solution is for struggling countries that have been left behind by the wealthy to work together to gain influence within the global market and can buy and share resources such as vaccines and ventilators. Reciprocity, unity, and alliance of the poor is a core tenet of my solution and I believe that these principals will lead to greater harmony of the world market.
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