rate of return on capital Doug Henwood <dhenwood at panix.com>
There's a lot of investment in some Third World countries, like China and Mexico. But aside from oil-producing countries like Nigeria, there's almost no FDI in Africa, or the poorer regions of South Asia and Latin America. So there's very little investment in areas that offer lower returns.
Most MNCs invest in regions where they can sell their products locally, and buy components locally. So if there's no supplier infrastructure and weak domestic markets, investment will be low. Despite the enormous wage disparity, the Netherlands is a much more attractive investment target than Haiti. Many poor countries are poor not because of foreign investment, but because they're largely outside the circuits of trade and capital...
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CB: Isn't the current poverty in Africa and Haiti significantly caused by the destruction of the indigenous societies through the course of the first few centuries of capitalist colonialism, and their transformation into whatever the current economies are ? It may be true that the only way for these countries to overcome poverty now is to be allowed into the privileged circuits of trade and capital of today or to become neo-socialist economies ( learning from the lessons of the first socialist economies). But somehow the role of the history of the impact of circuits of trade and capital should be mentioned in discussing the causes of their current poverty.