How to Get Rich in the 21st Century — A brilliant Article

How to get Rich in the 21st Century – Summary

The article discusses the ambitious economic development plans of several developing countries and the challenges they face.

• Many developing countries are setting ambitious goals on how to get rich in the 21st century.
• These goals typically involve achieving high economic growth rates.
• There are three main strategies countries are pursuing:
  • Leaping to high-tech manufacturing
  • Exploiting the green transition by focusing on resources needed for renewable energy
  • Repositioning themselves as trade hubs
• The article warns that these strategies are expensive gambles and that history is filled with examples of failed development plans.
• The article also acknowledges that developing countries are growing impatient with traditional economic advice from institutions like the World Bank and IMF.
• Overall, the article suggests that the race to get rich in the 21st century will be more difficult than it was in the 20th century.

How to get Rich in the 21st Century – A detailed breakdown

A detailed breakdown of the article ‘How to get Rich in the 21st Century’ on economic development strategies in the 21st century for developing countries, incorporating fresh insights and avoiding repetition:

A Collective Scramble Up the Economic Ladder

The article ‘How to get Rich in the 21st Century’ opens by highlighting the fervent aspirations of numerous developing nations to join the ranks of high-income countries by 2050. This ambitious goal necessitates a significant economic growth spurt, with some countries setting targets that are even more aggressive than what history has witnessed. Leaders acknowledge that incremental growth won’t propel them to their desired destination fast enough. They need a quantum leap.

Disillusionment with the Established Formula

The long-held set of economic policy prescriptions championed by the IMF and World Bank, known as the “Washington Consensus,” is no longer viewed as an infallible path to success. While these prescriptions focused on removing barriers to growth, the article suggests that they might be inadequate to induce the rapid development these countries crave. The world has changed, and a fresh playbook is needed.

Read More: Zafar Masud says IMF Programs are designed for stabilization, not for growth

Three Paths, Each with Its Own Thorns

The article ‘How to get Rich in the 21st Century’ explores three main strategies that developing countries are embracing in their quests for economic prosperity:

Leapfrogging to High-Tech Manufacturing: Some countries, like India, aim to bypass the stage of basic manufacturing and establish themselves directly in advanced technological industries. This strategy hinges on attracting foreign investment and fostering a highly skilled domestic workforce. However, established powers already dominate these sectors, and protectionist policies could hinder global trade and stifle this approach.

Capitalizing on the Green Revolution: Countries rich in natural resources see an opportunity to benefit from the burgeoning demand for green metals. Their plans involve cultivating domestic industries across the entire green energy supply chain, from raw material extraction to finished product manufacturing. Uncertainties cloud this approach, however. The long-term viability of demand for specific resources, the inherent complexities of these industries, and the environmental impact of large-scale extraction are all factors to consider.

Reimagining the Entrepôt: Oil-rich nations in the Gulf region are setting their sights on becoming trade and business hubs, luring foreign investors and businesses to their shores. This strategy capitalizes on their existing infrastructure and geographically advantageous locations. Yet, they face challenges in developing a competent local workforce and competing with long-established trade centers. Diversifying their economies away from a dependence on oil also presents a significant hurdle.

A Precarious Balancing Act

Each of these strategies necessitates significant financial investments and government intervention. The article cautions that the path to how to get Rich in the 21st Century is far from guaranteed. Policy missteps could lead to financial crises or squandered opportunities. The ever-evolving global economic landscape makes long-term planning a tricky proposition. Leaders must tread carefully, striking a balance between promoting domestic industries and fostering international trade.

Fresh Lessons Emerge

The article sheds light on several key takeaways on how to get Rich in the 21st Century. First, it underscores the resurgence of state intervention in economic development after decades of market liberalization. This reflects a growing sentiment that the Washington Consensus’ prescriptions might be too limited for the ambitious goals these countries have set for themselves.

Second, the article highlights the fact that developing countries are looking beyond the Washington Consensus for inspiration, often drawing from models like those of China and South Korea. These models placed a greater emphasis on government intervention and industrial policy, achieving spectacular growth rates in the past. However, the long-term sustainability of these models and their applicability in the current global context are topics of debate.

Finally, the article ‘How to get Rich in the 21st Century’ emphasizes that the path to high-income status might be more arduous and time-consuming than it was in the past due to several factors. One major difference is the shifting industrial landscape. Cheap labor is no longer the golden ticket to prosperity, and developing countries may find it more difficult to compete in traditional manufacturing sectors where automation is increasingly prevalent. Additionally, limitations on resources, such as time for oil-rich countries to diversify before oil demand drops, and the need to address environmental concerns add another layer of complexity.

How to get Rich in the 21st Century Conclusion

In conclusion, the article offers a compelling look at the ambitious development goals of many developing countries and the diverse strategies they’re employing on how to get rich in the 21st Century. It also wisely emphasizes the inherent risks and uncertainties associated with these approaches, reminding readers that the race to riches in the 21st century will likely be a marathon, not a sprint, demanding not only economic but also social and environmental considerations.

Some Facts and Figures on How to Get Rich in the 21st Century

• The article ‘How to get Rich in the 21st Century’ mentions that Narendra Modi, India’s prime minister, wants his country’s GDP per person to surpass the World Bank’s high-income threshold three years before 2050.
• The article states that officials in Indonesia believe they have until the mid-century mark to catch up with rich countries.
• The article says that Muhammad bin Salman, Saudi Arabia’s crown prince, wants to transform his country from an oil producer into a diversified economy by the middle of the century.
• The article ‘How to get Rich in the 21st Century’ refers to a study by William Easterly of New York University which found that GDP growth among 52 countries which had policies most consistent with the Washington consensus averaged only 2% a year from 1980 to 1998.
• The article states that India’s GDP growth needs to be 8% a year to meet Mr Modi’s goal [3].
• The article mentions that Indonesia needs GDP growth of 7% a year.
• The article says that Saudi Arabia’s non-oil economy needs to grow by 9% a year.
• The article ‘How to get Rich in the 21st Century’ refers to sober fiscal policies and steady exchange rates as being among the most widely adopted economic reforms prescribed by the IMF and World Bank since the 1980s.
• The article states that Mr Modi announced plans to increase industry’s share of India’s GDP to 25% from 16% in 2015.
• The article says that Cambodia hopes to double the exports of its factories, excluding clothing, by 2025.
• The article mentions that Kenya wants to see its manufacturing sector grow by 15% a year.
• The article refers to a period from 1960 to 1991 when manufacturing’s share of India’s GDP doubled.
• The article states that India’s government offered subsidies and tax breaks in place of import bans and licensing after the last outbreak in India in the 1970s.
• The article says that a scheme in India providing production-linked incentives gave tax breaks for each computer or missile made in the country in 2023, with the bill reaching $45bn.
• The article mentions that Malaysia is offering handouts to firms that establish cloud-computing operations.
• The article states that Kenya is building five tax-free industrial parks which will be ready in 2030.
• The article refers to Cambodia’s manufacturing sector producing three percentage points more of the country’s GDP in 2023 than it did five years ago.
• The article ‘How to get Rich in the 21st Century’ mentions that Indonesia produces 7% of global supply of nickel.
• The article states that Indonesia produces 22% of global supply of nickel.
• The article refers to a $400bn infrastructure spending boom in Indonesia between 2020 to 2024.
• The article mentions that the Kalimantan Park industrial park in Indonesia is being constructed on 13,000 hectares of former Bornean rainforest at a cost of $129bn.
• The article ‘How to get Rich in the 21st Century’ refers to a study by the International Energy Agency which found that pay-offs from green commodities will peak in the next few years.
• The article states that foreign workers account for three-quarters of the total labor force in Saudi Arabia.
• The article mentions that the United Arab Emirates (UAE) was one of the first countries in the region to diversify.
• The article refers to a $6.5bn Education City project being built across 1,500 hectares in Qatar.
• The article states that Saudi Arabia hopes to see flows of foreign investment increase to 5.7% of GDP in 2030 from 0.7% in 2022.
• The article mentions that the Public Investment Fund in Saudi Arabia has disbursed $1.3trn in the country over the past decade.
• The article refers to a study by researchers at Harvard which found that legislation introduced in 2011 in Saudi Arabia requiring a set portion of a firm’s headcount to be Saudi did nothing to move the needle on private employment.
• The article ‘How to get Rich in the 21st Century’ states that almost 80% of all non-oil economic growth in the past five years in Saudi Arabia has come from government spending.
• The article mentions that 35% of Saudi Arabian women are now in the labor force, up from 20% in 2018.