Aid in Reverse: How Poor Countries Develop Rich Countries

New research shows that developing countries send trillions of dollars more to the west than the other way around. We have long been told a compelling story about the relationship between rich countries and poor countries. The story holds that the rich nations of the OECD give generously of their wealth to the poorer nations of the global south, to help them eradicate poverty and push them up the development ladder. The US-based Global Financial Integrity (GFI) and the Centre for Applied Research at the Norwegian School of Economics recently published some fascinating data. They tallied up all of the financial resources that get transferred between rich countries and poor countries each year: not just aid, foreign investment and trade flows (as previous studies have done) but also non-financial transfers such as debt cancellation, unrequited transfers like workers’ remittances, and unrecorded capital flight (more of this later). What they discovered is that the flow of money from rich countries to poor countries pales in comparison to the flow that runs in the other direction. More information is available here.

Source: The Guardian