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irreversible Poverty in the Congo?

Posted on 03/02/2011

Despite its immense natural resources, the Democratic Republic of Congo (DRC) is one of the poorest countries in the world. People live in inhuman conditions. Social indicators show levels so low that it is virtually impossible for the country to achieve one of the Millennium Development Goals. Poverty has taken up residence in this country. Is it inevitable irreversible?

In the DRC, 71.34% of the population has an income below the poverty line. One of the areas of highest poverty in the world! It is the same depth - the income gap is the poor relative to the poverty line (32.23%). Contrary to what many might think, Democratic Republic of Congo has not always been so poor. At independence, the hypothesis of the country's development was indisputable for many it was so obvious: between 1920 and 1956, the economy of the DRC, then the Belgian Congo, had believed in annual exponential rates, with a growth rate average of nearly 7%. The growth rate of GDP per capita was even able to reach up to 18%. Its infrastructure was advanced compared to other African nations. He was particularly compared to South Africa. Its natural advantages were enormous. But for five decades, the trend reversed. For

whether poverty may one day back in the Democratic Republic of Congo must first determine its origin. In a recent paper [*], the author brings his contribution, based on the current state of knowledge in economics, may be useful in this debate.

The recent economic studies on the role of institutions in economic development can easily explain why the reversal of the economic situation in the DRC. In this regard, the historical course of the Democratic Republic of Congo would a root cause of poverty Congo through its institutional legacy.

In effect, institutions determine the economic performance of a nation. Countries with good institutions (rule of law, protection of property rights, guaranteed contracts etc..) Are those who occupy the front of the pack in terms of living standards and per capita have lower poverty incidences.

The Congolese reality, as pointed out by some wise, is extant condition of permanent instability in the post-independence and the opposite of good institutions and good governance: practices of corruption, illicit enrichment and squandering of public resources, predatory attitudes on the part of internal and external stakeholders (including the capability to undertake wars of predation), breach of property rights ... Thus, for Ola Olsson example and Heather Congdon speak of the Democratic Republic of Congo as the country has won the "Award of predation. In inflation, Baudouin Hamuli Kabarthuza in his book "Giving a chance for the Congolese people", wrote: "poverty or extreme poverty in the DRC can only be explained by the poor performance its institutions, its business. [...] Our policies also with their mismanagement plunged the country into the abyss [...] ".

According to the Mo Ibrahim Index , the Democratic Republic of Congo was ranked 51st in 2010 to rank from 53 African countries rated for their governance. This poor governance can be observed as such by the high corruption that characterizes this country: 164th most corrupt countries in the world of 178 countries ranked by Transparency International 2010 . Poor formal rules, generated by institutional failures do not create any incentives for entrepreneurship, investment, innovation, value creation, productivity ... And when all these elements are not met, negative growth is taking place. Because there will be less trade, less division of labor, and less productivity at the societal level. Without productivity increases, there will be no real solid economic growth. In different terms, the Democratic Republic of Congo would benefit if it was advancing its governance, established a real rule of law and improved the business climate, including for small entrepreneurs.

It therefore concludes that poverty makes sense in these circumstances, but not irreversible. Improve institutions reduce poverty rampant in the Democratic Republic of Congo. The process is not simple, there is no universal recipe, but it is time to start it now with scope at risk of ending up in 50 years in the current situation, after 50 years of independence - and 50 wasted years.

Article originally appeared on UnMondeLibre.org .

Note:

[*] Oasis Kodila Tedika (2010), "Poverty in the Democratic Republic of Congo: a brief review of places," Congo Economic Review, Working Paper No. 01/10.