There are three kinds of people other than the terminally apathetic or intellectually dead. A small group has a genuine desire and is willing to give effort to identify and find solutions to a nation’s and a society’s problems. A larger cohort is willing to make sound judgments on the solutions offered and do what is needed to bring these answers to fruition.

There is another small faction that brings the meaning to the last option in the phrase—attributed to American revolutionary Thomas Paine—“Lead, follow, or get out of the way.”

These are the ones that are remarkably good at identifying real or even imagined problems that a country faces, but are often more interested in assigning the blame rather than finding solutions. And the solution, coincidentally, is often that “The People” should have elected a particular candidate to high office thereby proving “The People” are getting what they deserve.

Once upon a time, there was the “First World,” nations that primarily, because of economic freedom that encouraged and supported creativity and initiative, had strong institutions that nurtured wealth creation.

The countries in the process of building the institutions necessary for that wealth creation belong to the “Second World.”

Lastly, there was the “Third World,” which, by incompetence and/or malfeasance (and perhaps some bad fortune) in both the public and private sector, was never able to build those institutions.

“Those institutions” include a fair and just judiciary, a legislature that provides laws that benefit everyone, and an executive that enforces the laws equally. It is also how all of them work together, including the private sector.

January 25th marked the fourth anniversary of the collapse of the Brumadinho mining reject dam in Brazil’s state of Minas Gerais, which killed 270 from a mudslide of 11.7 million cubic meters of mining waste.

Brazil is an exporting nation and benefited greatly from the 2000s commodities boom. The mining industries were accelerating without much rigorous oversight from the authorities, while everyone was benefiting from exports and inflows of foreign investment. Typical “Third World” defective practices. Or was it?

Countries like the Philippines learned from the 1970s and 1980s that a significant difference between “First” and “Third,” and maybe the root cause, was government/private sector debt. Is it all possible that a nation’s fiscal sickness, best exemplified by its government, hinders if not stops the establishment and evolution of strong national institutions? Certainly, the people in charge matter greatly. But is it also possible that weak and “bad” institutions create bad decision makers? And what happens to a society when institutions are weak?

“Third-Worldization”: The conversion of a nation into a Third-World nation. A critical measure of fiscal health is the “Government Debt-to-GDP Ratio.”

In 1993, the US Debt-to-GDP was 64.7 percent. It was 107 percent in pre-Covid 2019, and is currently 120 percent. In 1993, the Philippine Debt-to-GDP was 75 percent. It was 39.6 percent in pre-Covid 2019, and is currently “at a 17-year high of 63.7 percent.” In 2002, the ratio in the Euro Area was 68 percent; currently it is 94.2 percent. Are we witnessing “Third-Worldization?”

Few speak of it, but is there a breakdown of institutions and society in general as economies move in crisis towards failure? The thousand years of the Roman Empire did not disappear because of decadent emperors and barbarian invasions. It fell with the economic collapse of the government. The French Revolution was fueled first by grain riots as far back as 1529 in the French city of Lyon. Nazi Germany was directly created from Germany’s destroyed economy after World War One.

Which comes first—the loss of faith in government, moral decay, military tyranny, class war, and disease, or from economic stagnation and then failure? In the West, are we seeing war, violent protest, and a huge cracks in the social order because economies are breaking? Or are we in Southeast Asia, formally all “Third World,” so much more well-off financially or just more civilized?

E-mail me at mangun@gmail.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis provided by AAA Southeast Equities Inc.


Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Previous Article

Dreamscape delivers anew with ‘Dirty Linen’

Next Article

US-China war: Is it inevitable?

Related Posts

Most wasted foods in PHL households

The World Food Programme is the largest humanitarian organization delivering food assistance in emergencies and working with communities all over the world to improve nutrition. WFP said global hunger is not about lack of food because the world produces enough food to nourish every child, woman and man on the planet.

Column box-Sonny Angara 2
Read more

Addressing the impacts of the Mindoro oil spill

IT has been over a month since the MT Princess Empress sunk off Oriental Mindoro, causing a massive oil spill that has reached parts of Batangas, Palawan and Antique. Around 9,400 liters of oily water and 3,514 sacks of oil-contaminated materials have been collected from the oil spill that has directly affected 34,000 families in MIMAROPA and in Western Visayas, including no less than 13,600 fishermen and farmers, based on data from the National Disaster Risk Reduction and Management Council.

Read more

Three development imperatives: Follow through

The phrase “follow through” is a reminder I repeatedly got from my tennis instructor a long time ago. It is about the racquet swing and body position after hitting the ball. The reminder to focus, to position properly, and to follow through became a valuable lesson. Similarly, development outcomes, which take time to be realized, can be facilitated by constant and purposeful follow throughs.