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We know that a bunch of factors are linked to the economic status of a country, such as its natural resources, latitude related characteristics, connectivity with other countries, cultural issues, historical issues, corruption...

I'm trying to create a scenario where a very poor country with a history of exploitative colonization, dictatorial and corrupted government and a very strong religious culture are the main causes of poverty (which is a very common scenario in real life, right?).

What could lead this country to in a short period of time, arise as an economic powerhouse? I'm looking for plausible situations... All the things I think could happen, I can't help myself thinking that the other countries would quickly undermine the growing of this emerging country. That's why it would have to be quick.

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closed as too broad by Aify, sphennings, Azuaron, Mołot, Frostfyre Oct 30 '17 at 21:28

Please edit the question to limit it to a specific problem with enough detail to identify an adequate answer. Avoid asking multiple distinct questions at once. See the How to Ask page for help clarifying this question. If this question can be reworded to fit the rules in the help center, please edit the question.

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    $\begingroup$ If you're serious about writing a story that really delves into state building and the like, I highly recommend you take the time to read Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy by Francis Fukuyama $\endgroup$ – 458 Oct 26 '17 at 22:58
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    $\begingroup$ Oil. Plenty of real world examples in OTL involving oil. The Middle East is full of examples. $\endgroup$ – rclev Oct 27 '17 at 0:14
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    $\begingroup$ Read up about Singapore's history for an example that does not require natural resources, only a good location and one very capable, determined, and merciless leader. $\endgroup$ – Xenocacia Oct 27 '17 at 1:40
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    $\begingroup$ A complete lack of a moral compass and tax laws that legalize tax piracy. That will establish your country as a big financial marketplace, and as a home for very corrupt organization in the wolrd. That can get you from a net exporter of poverty migrants and mercenaries to a respected and rich country in the matter of a few decades. Obviously, any resemplance with switzerland is completely coincidental. $\endgroup$ – Burki Oct 27 '17 at 7:08
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    $\begingroup$ This is actually one of the big questions of economics. I do not think you can make that happen in a short period of time. You can make a country rich in a short period of time and with a wise development policy you can take it from there. Or you can build the economic powerhouse gradually. But it is important to understand that being rich does not make your country an economic powerhouse. You may want to look into Hausmann and Hidalgo's product space and economic complexity index. $\endgroup$ – 0range Oct 27 '17 at 13:10

21 Answers 21

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Better administration?

I honestly think that the "we found oil" answer is the simplest, but in the interests of giving an alternative, I'll answer something different.

IMHO one of the wisest statements is this (paraphrased): "You do not need to run faster than the bear, just faster than the slowest of your friends."

Basically, if your country is the best place to do business in the area, that is what people will do. You do not have to solve your issues, if the other countries you directly compete with for investment have the same issues worse.

Establish strong rule of law to curb issues with dictatorial rule. People do not really care about the level of democracy, what they care about is that dictatorships are arbitrary and unpredictable. That makes investments riskier, which limits investments to the most profitable. It also makes living in the country riskier, which means that valuable people with skills are likely to come to the country or stay in the country only if they have no good alternatives.

This is about reforming the legal system. Reform the courts. Reform the laws. Then make clear that you respect the laws and the legal system. Aim to be remembered as "the Just" and commit to that publicly.

If you succeed, you will also be able to open the borders for people coming in or going out, which makes the economy more competitive.

Make fighting corruption your priority with a laser-like focus. Invest real resources to cleaning up corruption long term. Accept that the corruption in your country is systemic, not something caused by individual criminals. Be lenient with people who confess, cooperate with the investigation, and promise to clean up. Make examples of people who lie to your investigators or the courts, or break their promise of going clean. Protect and reward people who reveal corruption, punish people who knew of corruption, but kept silent (this needs to be introduced gradually).

Reform the religion in your own image. You do not wish to be "the Just" because it will improve the economy. Oh no, you believe that God is the God of Justice, and to be Just is to serve God and to be Unjust is to fail God.

Fight against corruption is a Holy War against the forces of darkness. Corruption is not about money, it is about the souls of the people turning away from Justice, the path to God, towards Injustice, the path towards eternal damnation.

And the forces of darkness have not been content to corrupt the secular, they have even spread their insidious poison to the very religion that is meant to protect the souls of the people from them and guide people to God. Religion needs to be cleansed, refocussed on the Justice of God, against the Corruption of the Darkness.

No more will people be distracted from true path to God with calls to the dark sides of the human souls. No longer will the word of God be allowed to be used to spread hatred and intolerance. No longer can word of God be used to spread fear of Change when the God is omnipotent and no change cannot happen that is not within his power. To fear change is to reject the very power of God.

You get drift? Basically, even though "the Just" is the epithet you are going for, you should play so that you will probably actually be remembered as "the Holy" or "the Pious". Such brute force solutions are really the best for dealing with religious issues after a certain point. The religious actually want to be told how they should believe. Give it to them. Validate their view that God and religion matter and they will love you.

Just remember that dogma and absolutism only makes sense on the level of principles, when it comes to actual solutions humility and conversation are what you should preach. Corruption is Evil and from the Dark and must be destroyed without mercy. Corrupt people are victims of the forces of Darkness, and should be guided back to light with understanding and negotiation. Unless they reject the guidance in which case the iron fist comes to play.

Brotherhood of faith is how you see your neighbours. The economy of Britain and Ireland has done well not just because they have been good places to do business, but because they have been good places to do business within the EU. More of their business within the region business can do within your country more money you will make. Because of this you should do everything you can to promote regional unity and cooperation. Be the good guy, take the high road if you can.

That said in practice you should be pretty Machiavellian. Remember that the world is not actually just and act accordingly. Even if you are fighting corruption, your neighbours will still be riddled with it. Accept it and take advantage of it. High corruption means your neighbours will have powerful men with lots of money they can't really invest in their own country. (Because... you know... with the high corruption...) Mutually beneficial arrangements where they invest in your safe country to get benefits in their own country should be pursued.

If your poor country does not produce something, but their country does, it is trivial to open the market on that good and then move the production to your country with its lower corruption. You can even agree to free movement for the employees in such cases, so the owner of the factory can even keep his core trained work force. This is simple profit for the owner of the production and since in corrupt systems he would also have influence on the people who make the decisions on the issue it should be simple to arrange. In some countries people owning the business and making the decisions might even be the same.

EDIT

I was reading the comments to the "natural resources" answer and realized I forgot to say some things. First, and rather obvious, this answer is not only an alternative to natural resources, it works even better as a supplemental solution. "What to do when you find oil." Second, this and the "natural resources" answer tell how to get the growth started, but I forgot to tell one tip about sustaining the growth.

Think small and iterate. Instead of banking on one industry or product, you should work to create as many healthy self-sustaining industries and services as you can. Do not aim to be number one in one thing, aim to be solid in many things.

Economy forms a network and can form self-sustaining loops. Because of this it is very valuable to have a diverse economy, so that those connections and feedbacks can happen in your country. Otherwise part of the growth will happen elsewhere.

Businesses might even relocate to a location that has all the things they want, because while transport has become cheap it still adds lag. New growth and investment tends to happen in places that have most of the necessary resources and services available because quite simply it makes starting new business easier and faster.

Importantly pushing this threshold low enough is the requirement for organic growth. (<- What you want.) Easy availability of resources and services lowers the threshold. Corrupt and inefficient administration raises it.

The importance of availability is actually part of the argument why free trade is supposed to create economic opportunities and growth. This argument definitely applies to a poor country trying to become wealthy. Even if a natural resource or foreign investment gives you the capital, you won't have the volume or diversity to sustain healthy economic growth. You will need a conscious policy of sharing these resources with others in the region and even globally. Your country should be open to foreign companies and your companies should be aiming to operate internationally.

Two good starting points to think about are services and infrastructure. My answer about reducing corruption and improving administration is a good starting point for becoming the regional service hub. The primary answer about natural resources is a good starting point for making capital heavy infrastructure investments. Typically we would be talking about transport infrastructure, but Las Vegas (among others) is an example of spending money to create a new travel destination. Money has also been spent on new capitals, huge vanity projects, and investment funds, but the relevance of those to this question is not obvious.

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    $\begingroup$ Great answer. On corruption, I'd note that there's many levels, all of which have been used, not just accepted, by states to empower their economies and move toward freedom. Clientelism, for example, was common in the USA until shortly after FDR's presidency. You might be interested in a great book I've almost finished: Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy by Francis Fukuyama $\endgroup$ – 458 Oct 26 '17 at 22:57
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    $\begingroup$ Also on corruption, avoid the temptation to use your anti-corruption squad as a weapon against political opponents. In most countries "we are cracking down on corruption" is political code for "we are manufacturing evidence of corruption to use against the opposition". $\endgroup$ – Paul Johnson Oct 30 '17 at 7:19
  • $\begingroup$ -1 because of the focus on religion. Giving power to religion means giving power to not elected figures in a now transparent organization (church). This just leads to more corruption (dark ages anyone?). To achieve less corruption you do need a laic state, see Sweeden $\endgroup$ – jean Jan 26 '18 at 18:04
  • $\begingroup$ @jean From the actual question with emphasis added : "I'm trying to create a scenario where a very poor country with a history of exploitative colonization, dictatorial and corrupted government and a very strong religious culture" Yes, it is very tempting to do a "great leap forward" and leave behind all the bad things of the past but it has a downside. It does not actually work. Any practical plan to build up a country has to start by accepting the pre-existing reality, especially and specifically the parts you do not like as those are the parts you are likely to fail at. $\endgroup$ – Ville Niemi Jan 27 '18 at 9:12
  • $\begingroup$ @jean To be more specific: My suggestion focuses on religion because if the religious establishment becomes opposed to the reforms the very strong religious culture means your reforms will either fail outright or become a net negative with corruption and political unrest increasing and eating any benefits. It is much easier to at least try to co-opt that strong religious sentiment. Even if it fails the resistance to reforms will not be as unified or powerful. $\endgroup$ – Ville Niemi Jan 27 '18 at 9:20
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Natural resources. Advances in technology require some substance (e.g. oil, lithium, cobalt) which can only be found in useful quantities in your poor country. And the balance of power among the more powerful nations is such that none of them can get away with just invading and taking the resource. In the real world, see Saudi Arabia as an example.

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    $\begingroup$ Qatar is an even better example. $\endgroup$ – John Oct 26 '17 at 19:23
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    $\begingroup$ Many natural resources -> few extremely wealthy lords, many extremely poor slaves/low class. Go look at where they get gold and diamonds from, or out where they actually get the oil from the ground. $\endgroup$ – sdfgeoff Oct 26 '17 at 21:24
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    $\begingroup$ @sdfgeoff Sure, but the question's not about equality and human rights, but economic power. In any case, Norway is a counter-example — it does vary depending on the country’s political institutions. $\endgroup$ – Mike Scott Oct 27 '17 at 6:08
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    $\begingroup$ @MikeScott Following the question though, Norway doesn't have the background which the OP specifies, and oil was discovered after liberal social structures were established. Britain certainly qualifies though. The great Irish famines happened at the peak of the Industrial Revolution; and whilst the Irish suffered most, it's important to also remember that poor Brits were badly affected too, and all lower-class Brits were equally disenfranchised. $\endgroup$ – Graham Oct 27 '17 at 9:21
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    $\begingroup$ @MikeScott It's important to note that Norway started becoming a wealthy country (and it took a long time too!) not because of the oil, but because of coffee. Coffee replaced strong alcohol as the drink of choice. The places where you used to drink alcohol were replaced with drinking coffee. Now considering that Norwegians today drink about 10kg. worth of beans each (about 10x the international average), you start to get an appreciation for the scope of change. A simple article can be found here: dw.com/en/why-norwegians-love-coffee/a-17826779 $\endgroup$ – Haakon Løtveit Oct 27 '17 at 10:07
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Quick development requires other countries to invest money. Improving on its own is always a much slower process. So, what can prompt others to invest?

  1. Natural resources. This is by far the most common scenario. Gulf countries has already moved all the way from rags to riches this way. Mineral resources other than oil would require more investments, but still can help with development.
  2. Financial offshore. Small countries can make a good living by positioning themselves as tax-free offshore zones.
  3. Transportation hub. This would require both advantageous geographic position and investments. In the past, empires just seized small outposts as colonies (like Gibraltar and Singapore). Nowadays, Gulf countries are reestablishing themselves as air travel powerhouses.
  4. Touristic paradise. If the country is blessed with either perfect climate or rich ancient history, it can pull a solid income from foreign tourists.
  5. Geopolitical play. Particularly in Cold War era, a third world country could pledge its allegiance to one of the two blocs, and get a windfall of resources. This had never led to real riches though, because this kind of play always comes with trouble.

In either case (except maybe geopolitical play) the country should show itself as stable and law-abiding. No investment will come if there is a risk of revolution or a coup.

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    $\begingroup$ "No investment will come if there is a risk of revolution or a coup." It does in the natural resources case. $\endgroup$ – jpmc26 Oct 26 '17 at 23:09
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    $\begingroup$ None of these scenarios (except for, potentially, 5) are sustainable development paths. They are either short term only (1), only viable for very small countries (2, 3) or too little (4). When the resource runs dry or the transportation routes change, your country will slide back into bitter poverty, the Peru way. The OP was about creating an economic powerhouse. To create an economic powerhouse, you need to build capabilities. This is hard and the vast majority of countries have been failing epically for quite some time and continue to do so today. $\endgroup$ – 0range Oct 27 '17 at 13:02
  • $\begingroup$ @0range (1) is not necessarily short term. It depends on the magnitude of the resources found. I'd say the biggest worry is "Once they find out you have resources how do you keep them from invading you?" $\endgroup$ – corsiKa Oct 27 '17 at 15:17
  • $\begingroup$ @jpmc26 ah, but then they invest in the coup ;) $\endgroup$ – Jeutnarg Oct 27 '17 at 18:23
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In all honesty, take a look at the last 50 years of Chinese history.

Basically, break the rules that the other nations have to follow, or at least pay lip service to. While the rest of the world started to scale back and repair environmental damage, China allowed all sorts of projects that were hugely damaging to the environment, reducing their costs and maximising profits.

Then they doubled down on that and allowed the rest of the world to dump their most toxic waste on Chinese soil, again doing what the other nations weren't prepared to do.

A couple of other things helped the Chinese government as well, not least of which is the fact that they view their population as a collection of exploitable resources. If you don't care about human rights then its cheaper to run your factories with fewer safety measures which translates into economic dominance.

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    $\begingroup$ China has had an extremely strong and well organized state for thousands of years. It's not really like the OP has in mind, which is "history of explorative colonization, dictatorial and corrupted government and a very strong religious culture". Think more like African countries. How can they come out as economic powers in short order? $\endgroup$ – 458 Oct 26 '17 at 22:50
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    $\begingroup$ @fredsbend Everything you list happened to China from 1800 and on. Exploitive colonization: Opium Wars. Dictatorial government: Mao. Religious culture: Confucianism. Corruption: Late Qing Dynasty. $\endgroup$ – user71659 Oct 26 '17 at 23:44
  • $\begingroup$ You are absolutely right! But my heart bleeds to think of allowing other countries to abuse my natural resources, to dump wastes in my soil and use my people as slaves! $\endgroup$ – Thai Oct 27 '17 at 12:42
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A huge war among world powers. I did not get a time period from your question, but this would take a total war like WW2 or the Napoleonic wars and not a little professional war like the British French conflicts

In this scenario the world powers can burn themselves out. They can loose military, food and population becoming no better than the poor country. At the same time the poor country can suddenly find great profit in selling natural resources to all sides and providing very lucrative bank loans. After the war the country can help in the rebuilding effort gettings it's fingers in all the other nation's politics and becoming very influential.

If there is a religion involved that can play a role as well. The people driven from their homes could flock to this new religion increasing the nation's influence

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Aliens!

This is the worldbuilding site, so aliens landing is not an infrequent occurrence. Suppose advanced aliens in a desperate situation (damaged ship; refugees etc) land in your impoverished but enlightened country, where they are welcomed. The aliens are pleased by the friendly reception, and make themselves at home. They share their technology and insights with the locals.

Suddenly this impoverished country is the source of amazing technology that the rest of the world must have, or must have the products it produces. Natives of this country return home, bringing with them marketing savvy. They proceed to profit from the alien technology, some of which they use in secrecy in their own country and sell the products / proceeds. The aliens are happy to help their new friends.

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Along comes a prophet

A leader of the religion emerges with some good ideas, like getting rid of the dictator and corrupt bureaucracy. If there is a large or well off diaspora the religious leader can name himself head of the religion and decree that the religious people everywhere else are required to support this country.

Unlike the real world corollaries the country supports being nice and ideas like don't abuse people you are responsible for and trust your leaders become popular and work.

They are invaded

The great enemy of the people comes and invades, laying waste to the (outdated) infrastructure and slaughtering the (incompetent) leaders. The people rally behind new better leaders to reclaim their land. The unity created in the war survives the war and the leader turns the nation's attention to rebuilding better than before.

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  • $\begingroup$ Unlikely to work, imo. Can you give an example of that? History pretty much shows that after a strong tyranny you never jump to a healthy republic. There is always more steps to this than just a rebellion. Take the French Revolution as an example. It was a step forward, but then they had the "tyranny of reason" with Robespierre who executed anyone disagreeing with his line of thought. Sure, it got better after that, but there is always more than just one step and it takes it's time. $\endgroup$ – ArtificialSoul Oct 27 '17 at 12:16
  • $\begingroup$ Make sure that your new religion welcomes practitioners of all other faiths (or enough of your world's faiths to encourage a cosmopolitan population) and has a sufficiently enlightened world view that it actively encourages universities to be founded in its holiest cities. As a matter of faith you are required to educate all of your children to the limits of what their skills and temperaments permit. $\endgroup$ – arp Oct 27 '17 at 20:31
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Simply speaking, to become an economic powerhouse you need two things:

1) Your country must have something that other countries value, and

2) Something prevents them from taking that thing by force.

There are any number of ways you can achieve those things. For example, look at Foundation, by Issac Asimov.

In Foundation, Terminus is almost completely devoid of material resources. But their scientific advancement is far above their neighbors. This makes them desirable, but unable to defend themselves through military might. So instead they play the four neighboring planets against each other - no one planet can take their science by force because it cause the other planets to retaliate.

The rest of the book is about how Terminus shifts their second condition as the situation around them evolves.

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In a single word...Morale. Expanded...leadership and vision.

History is pretty full of examples like these where a people faced with hard times rallied around a leader and found themselves thrust into the spotlight as a major power. One of the easiest methods here is unity and lack there of. A country could have a decent amount of wealth, but due to internal struggles and conflicts, the people remain poor. This continues until a single figure unites the various powers into one.

Ghengis Khan and the Mongolian empire was in it's infancy a simple tribe that Ghengis became leader of. One by one, either through diplomacy or combat, Ghengis began uniting the mongolian people until they formed a vast empire.

Alexander the great found himself in the middle of feuding greek states that individually were not that powerful, however united under Alexanders single banner forged a giant empire.

More recently...the Mujaheddin in Afghanistan was composed of two distinct peoples that fought with themselves for control of the nation. Enter the Russian threat and the two previously conflicting entities find a common enemy and unite to fight together as one. Of course, victory here simply ment the common enemy was defeated so they may return to their previous infighting.

It's a constant tactic in modern days as well...divide and conquer after all. Keep a nation infighting, supply both sides (or many sides if more than two) with the means to survive and fight, but not quite enough to be victorious over the other. Your poor country, for a variety of reasons, has been dealing with internal power struggles for a long period of time. A single figure arises that unites all sides in the country and they rise as one united whole and an economic and/or military powerhouse.

And I'll leave this post with the speech from Queen Elizabeth just prior to the defeat of the Spanish Armada...from this speech forward, the English entity would overcome it's internal power struggles and become the major world power.

“My loving people, We have been persuaded by some that are careful of our safety, to take heed how we commit our selves to armed multitudes, for fear of treachery; but I assure you I do not desire to live to distrust my faithful and loving people. Let tyrants fear. I have always so behaved myself that, under God, I have placed my chiefest strength and safeguard in the loyal hearts and good-will of my subjects; and therefore I am come amongst you, as you see, at this time, not for my recreation and disport, but being resolved, in the midst and heat of the battle, to live and die amongst you all; to lay down for my God, and for my kingdom, and my people, my honour and my blood, even in the dust.

I know I have the body but of a weak and feeble woman; but I have the heart and stomach of a king, and of a king of England too, and think foul scorn that Parma or Spain, or any prince of Europe, should dare to invade the borders of my realm; to which rather than any dishonour shall grow by me, I myself will take up arms, I myself will be your general, judge, and rewarder of every one of your virtues in the field.

I know already, for your forwardness you have deserved rewards and crowns; and We do assure you in the word of a prince, they shall be duly paid you. In the mean time, my lieutenant general shall be in my stead, than whom never prince commanded a more noble or worthy subject; not doubting but by your obedience to my general, by your concord in the camp, and your valour in the field, we shall shortly have a famous victory over those enemies of my God, of my kingdom, and of my people.”

“Come on now, my companions at arms, and fellow soldiers, in the field, now for the Lord, for your Queen, and for the Kingdom. For what are these proud Philistines, that they should revile the host of the living God? I have been your Prince in peace, so will I be in war; neither will I bid you go and fight, but come and let us fight the battle of the Lord. The enemy perhaps may challenge my sex for that I am a woman, so may I likewise charge their mould for that they are but men, whose breath is in their nostrils, and if God do not charge England with the sins of England, little do I fear their force… Si deus nobiscum quis contra nos? (if God is with us, who can be against us?)”

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That's an interesting question.

Here are some factors that can explain a quick economic development:

End of colonization

Most, if not all, cases of colonization in real life were motivated by the economic interest of the metropolitan state. Independence is necessary to stop the flux of resources and wealth out of the country. Companies in a colony also tend to be in the hands of the metropolitan state. Of course, the metropolitan state claims that it is helping to modernize the country. This is not false, but the "modernization" is oriented towards the interests of the metropolitan state. See the road system in Western and North Africa: most of these countries were French colonies and the road system has been developed to help resources leave these countries.

Have an incoming cash flow:

A country cannot be developed without money. So you need to have other countries spend their money in your country. There are many options for that:

  1. Exportation: the interest (hence their price) had greatly varied in history. Your country may have important stocks of a resource that became suddenly of first important: oil (Saudi Arabia, Venezuela, Norway...), the coltan used in cellphones, uranium, rare wood, spice (Dune), vibranium (Black Panther),... As the example of Singapore, Taiwan, or South Korea have shown, don't forget technology as a potential resource.

  2. Not a resource you can easily export, but manpower, as China demonstrated, can be a source of fast development. Manpower comes from a large population, but also from hard work (50 hours work week vs a worldwide average of 40).

  3. Tourism: your country became suddenly a popular touristic destination.

  4. Your country received a loan from a rich country with no or low interest to help him develop. The interest for the big country could be to develop your country to expand its business opportunities. Or to make an ally in the region of your country. For example, the New Deal helped reconstruct a destroyed France and North Korea lives mostly with the financial support of China... and South Korea! Wisely used, that money could be the key to modernize your country.

  5. Your country benefited from joining a union of countries. The core economic idea of the European Union was that, by helping poor European countries (Ireland, Greece, Spain, Portugal,...), it will increase business opportunities for rich European countries (France, Germany,...).

  6. Pure luck: your crazy dictator decided a few years ago to convert all of your national currency to Bitcoins. Jackpot!

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Pure Inventive Genius.

This is very similar to the "natural resources" answer of Mike Scott.

Super intelligence does not require a rich country, IRL consider Srinivasa Ramanujan, one of the most astonishing mathematicians, that had virtually no formal training or schooling and produced thousands of stellar results and proofs in a very short life (died at 32), many of them proven true only decades after his death, that he seemed to "just know" were true.

Fictionally it is entirely possible some native genius in this poor country could discover chemistry or physics, and even though a country is poor does not mean its leadership is poor or stupid. Judicious management of such a genius and his/her results could then produce products, perhaps many of them, that put the rest of the country to work and are in high demand throughout the world. The genius becomes the "natural resource", producing (say) green energy products, medicines, solvents and cleaners, insanely cheap desalination chemicals or machines that make it possible to use sea water to irrigate crops. His country may be poor to start, but they can at least afford patent protections and have a military to provide security, and keep trade secrets on processes secret.

The genius may be quite proud of serving his country and providing the talent needed to put them all to work, and his government may be happy to share the wealth with its citizens. The Genius is more than happy with this arrangement, lives as well as they want, and is not inclined to defect or become a billionaire elsewhere. Like Tesla, they are not driven by monetary greed but by compulsion to solve the next problem. Or perhaps the genius is driven by being the hero, with the fame and adulation and tearful gratitude of their countrymen that borders on worship of the divine.

The world market for such products can be in the trillions of dollars. Start with a killer solution that others can't hack (like a cure for cancer, or a simple and cheap fusion energy, or green fuel 20% the price of oil), and it could be enough to transform a populous poor country into an economic powerhouse in a decade.

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  • $\begingroup$ A very possible invention would be the next Facebook. $\endgroup$ – Stig Hemmer Oct 30 '17 at 10:02
  • $\begingroup$ @StigHemmer The next facebook, youtube or google might make the genius a multi billionaire, but as Bill Gates has pointed out in interviews, what he could do with his fortune is a tiny fraction of what the USA or China could do. Zuckerberg has a net worth around $75B, the USA has a net worth over 1000 times as much. if the point is to make the country an economic powerhouse, we need a multi-trillion dollar idea (or collection of ideas). $\endgroup$ – Amadeus-Reinstate-Monica Oct 30 '17 at 16:15
  • $\begingroup$ You are right. It is difficult to visualize numbers of that size. $\endgroup$ – Stig Hemmer Oct 31 '17 at 8:38
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Being small and agile to adapt quickly to changing circumstances

If you look at the countries in the real world that have achieved what you're looking for, there is a common thread to many of them. They are relatively small countries that were able to adapt to changes in the global political and economic spheres and take advantages of those changes.

You need to be small for this to work; larger countries would struggle to adapt quickly enough unless they were very well organised, which would imply a strong economy already (the counter example here is China, which has managed to rapidly build its economy despite being large, but this is because it is so well organised centrally).

The actual mechanism for the rapid growth would depend on what the circumstances were and what resources the country had available -- it could be natural resources like oil, or it could be the ability to rapidly expand manufacturing capability, or it could be human resources and skills.

There would typically need to be some concerted effort on behalf of the country to achieve this: you won't just get lucky and ride the wave; you've got to make a deliberate plan to expand the economy and work on it over a period of years. For example, human resource and skills don't just exist; you have to invest in years of training and building up your training capability.

What that means is that while the growth may be rapid and unexpected from the perspective of the rest of the world, it will have taken a considerable amount of work behind the scenes.

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  • $\begingroup$ I'm not really sure which countries you talk about when you write "the countries in the real world that have achieved what you're looking for". Could you give a few examples? $\endgroup$ – pipe Oct 27 '17 at 12:44
  • $\begingroup$ @pipe Finland would be a nice example. Before and after WW2, the primary industry was farming and forestry. Fast forward 50 years and the primary industry was IT and high tech. Here's a nice article on that preliminary process, to the time just before the rise of Nokia: countrystudies.us/finland/77.htm $\endgroup$ – Juha Untinen Oct 30 '17 at 7:34
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Look at China over the last 50 years. All of the things you have talked about happened in China over the last 200 years.

It was close to existing supply chains. The economic dominant nations where ideologically in favor of extending trade ties. It was a large source of cheap labor. It was politically stable. It was less protectionist than alternatives, allowing foreign firms to reap profits (at least to start). It was less corrupt than many alternatives (at similar labor cost levels). It was large enough that it could push back a bit.

It started with industrialization in a few areas, and expanded from there. As supply chains moved into China, having supply chains inside China started getting network benefits, which increased growth. It controlled how much of the resulting surplus went into increased standard of living, redirecting much of it into massive infrastructure spending (again, using large relatively fallow labor pool).

Imagine you have someone working generating 10\$ a day in wealth. You can pay them anywhere from 0\$ on up. At 0\$, it is slave labor. At 10\$, they are getting what they deserve.

Growth at 10$ a day ends up being small, because there is no incentive to grow.

China paid them (say) 1\$, gave 3\$ to foreign investors, and lost 1\$ to corruption and spent 5\$ on building infrastructure to make the next worker more productive.

This sucks in the short term. The workers are getting shafted; only the fact that their alternative is starvation and there is a huge fallow pool makes this at all sustainable.

Suppose every 10 years workers become 2x as productive, and labor force grows by 10x. Then after 50 years, the workers are producing 320\$ a day in wealth. They keep 30\$ (the same 10%). The foreign investors take home 100\$, 3\0$ is lost to corruption, and 160\$ is spent on investing in yet more growth, and there are 100000x as many workers.

The decades of suffering and investment in growth can lead to massive change.

This isn't sustainable past a certain point, because the exponential growth works by feeding off and providing services to the rest of the world economy. And eventually it starts becoming a market maker, at which point the source of growth has to change.

Being 100x poorer than your neighbors isn't a long term problem if you are growing by a factor of 2 every 3 years. In 21 years at that rate you'll exceed their size. For a poor nation to become rich, it either needs a huge windfall (like an oil strike), or a way to engage in an industrial revolution and the resulting exponential economic growth.

Compound interest is the most powerful thing in the world.


Going back a bit further, for the longest time economic power was basically population and land based. Poor countries had less land or population. Rich countries had both.

There where rare trading countries that where richer per capita, but they where mostly city-states.

The industrial revolution changed this. Again, we got exponential growth going on -- in the case, technological. Steam engines begat better coal mining, which begat more steam. Coal begat steamers, which begat more coal. Coal begat railroads, which begat more coal.

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Mistakes or issues facing other competing countries

Suppose you want to trade with a country, but they become chaotic or move towards unstable/dictatorial government, or get hit with sanctions blocking trade. Some nearby country might be the best place by far to substitute for it, when people have to leave or cut ties with one country, but want to remain in the area with minimal disruption.

Often it's others mistakes more than ones own cleverness that counts.

A small country might well become important (economically or strategically) due to it's location near some zone of interest, or issues/interest in a nearby country where others want to be "near but not in it".

Examples freely adapted from historic situations:

  • "A bit like Afghanistan": given aid (lots of economic resource input) because of its strategic location and to gain favour of local govt in order to benefit larger goals.
  • "A bit like Iran/Iraq/Israel" - given economic aid to gain foothold in area or reduce efficacy of an undesirable local state actor.
  • "A bit like Cuba" - given economic aid because its near an opposing country and gives a good strategic location
  • "A bit like Luxembourg, Isle of Man, or 20th century Switzerland" - gains economic advantage due to keeping tax rates low compared to neighbours, or strong privacy laws lacked by other alternatives.
  • "A bit like current EU or China" - a country might want to deal with a powerful trade region but may need a base nearby that has suitable treaties both sides, or favourable conditions, or stability; if there aren't many choices then one country might benefit even though it is itself poor.
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Powerful ally. USA needed to have strong ally in communist control east Asia so they invested in South Korean development by sharing technology and giving preferences to south Korean products.

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There are plenty of examples of this. Prior to WW1, the US was a fairly backward nation. After much of Europe got destroyed, the US was able to ramp up industrial output to help out Europe. After WW2, Europe had very little industrial capacity left. The US helped rebuild much of Europe, which is what led the US to become the greatest economic power on Earth.

You can also look at Japan before/during WW2. It was a country controlled by a monarch who was presented as a god to the people. They also had very few resources (which is why they invaded China). After they surrendered, the US sent a team there that changed their government, economy, and had a large impact on their culture. This change came about fairly rapidly. From being defeated in the war, by the 60's they were a major economic player (not as big as the US, but still, they did very well).

Perhaps you can have a large scale war that your nation participates in, but the war doesn't touch their borders. They end up on the losing side, and a powerful but benevolent nation forces a major change to their government and transform the religion into something better (not replacing it, but simply bending it a little). Since their industrial capacity wasn't diminished during the war, they quickly become a major economic power by helping rebuild the nations that were destroyed.

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    $\begingroup$ "Prior to WW1, USA was a fairly backward nation", USA was by far the biggest economy prior to WWI (en.wikipedia.org/wiki/List_of_regions_by_past_GDP_(PPP)) $\endgroup$ – user44201 Oct 27 '17 at 11:28
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    $\begingroup$ Interesting, I wasn't aware that the US numbers were that good back then, but I was comparing us to Europe. Prior to WW1, the USA was an isolationist nation that was primarily agrarian. We were in the process of industrializing, but we hadn't hit our peak yet. If you look closely at the numbers from the link you shared and compare that to population, I think you'll see that we didn't rank as high as that chart suggests. en.wikipedia.org/wiki/List_of_countries_by_population_in_1907 $\endgroup$ – Brian Oct 27 '17 at 16:02
  • $\begingroup$ I am not sure. The numbers in my link show that USA had GDP more than twice as large as second germany. Your link shows population of USA 30% bigger than German. Maybe this link will clarify the confusion en.wikipedia.org/wiki/Second_Industrial_Revolution#/media/… $\endgroup$ – user44201 Oct 30 '17 at 7:17
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Utilising human creativity and innovation Humans are the most valuable resource on the planet. Most rich countries have one thing in common: They are good at usilizing human creativity and innovation.

Heres how they do it is simple:

  • Decentralised Democracy: Divide your country up in municipalities, regions and states. Give them self control over as much as possbile and let them compete. They government should have as little domestic power as possible. You will quickly see that the society regulates itself better than any centralised power could. Regions with attractive policies and regulation outcompete ineffective regions, and the ineffective regions will adapt to keep up - just like private corporations compete in global economy.

  • Security:: Is the foundation for prosperity and should not be neglected. Security should be the centralised governments main responsibility.

Natural resource is a very bad indicator for wealth

Using natural resources as the main reason for wealth is misleading and incorrect. Some of the poorest contries on earth is the richest in natural resources (Venezuela, Congo, Nigeria, Iraq) and some of the richest countries are the poorest in natural resources (Singapore, Hong Kong, Switzerland, Luxembourg, South Korea).

The wealth in most rich countries are not a consequence of natural resources, but of the utilization of human innovation and creativity.

Also: Using Saudi Arabia, UAE, and Quatar as examples are very misleading. Even though the ruling class is very rich, the population is not. Please note that the vast majority of the working class in these contries are illegal immigrants and they are not accounted for in official statistics. If they were, the average BNP per capita would be much lower.

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A change in the way people think, where many people think I should do something productive and valuable for me and country, rather than blame someone else for not doing it.

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There is a huge difference between a small poor country and a large poor country. A small country can get rich quite quickly by exploiting its position for shipping or finance (eg. the UAE or Hong Kong or Singapore) or by becoming a tax haven (assuming the other powers tolerate it for some, probably geopolitical, reason).

For a large (in population) country to become rich quickly is much more difficult. A revolution that removes oppressive religion and colonization overnight, and even with a good culture and educated people will take a generation or two. For one thing, if the former colonizers are still around and powerful they will not easily accept their "loss" and will try to shut out and starve out the new regime, assuming they don't go all out and invade to install a more favorable government. It took the US until 1979 to recognize China (from October 1949), and they managed to keep China out of the UN until 1971, so around one human generation of relative isolation.

In the case of a large country, a war between existing powers that leaves them weakened and inward-looking would probably be a reasonable scenario. You could even have the large poor country covertly provoke the war and help sustain it (while destroying the productive capacity of the belligerents) and then profit handsomely from selling into the resulting chaos and destruction to restore their consumption (quickly) while restoring a minimum of production capacity.

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A true revolution + an authoritarian Leader

The country needs a two stage act to get itself out.

You listed out why the country is poor

history of exploitative colonization, dictatorial and corrupted government and a very strong religious culture

All these could have been caused / sustained because of the existing leadership/government mechanism. This needs to be dismantled before the country can set itself on path to recovery. And to change such a system a revolution is the only option - other than invasion by another country (which is not what we want).

Natural resources can be slowly squandered away if the conditions(people, leadership etc) are not right. And hence the first importance of act one (revolution).

I can't help myself thinking that the other countries would quickly undermine the growing of this emerging country.

Another country cannot and will not involve itself in a revolution (unless it is the sponsor). If it was by any other means, for example a coup; it can be fought against by the existing regime by aligning with another nation for help. A revolution is much more massive than a coup to fight it off even with help. And this is the second importance of act one (revolution).

As long as its humans that live in that country, they will need an authoritarian leader to take it places after act one. A revolution gives a supremely decisive mandate to the leader to perform fearlessly knowing well that the entire citizens are with him/her. And that is the third importance of act one (revolution).

It also helps if the country has a USP (Unique Selling Point). It could be natural resources. It could be technology. It could be cheap manufacturing. It could even simply be an exhibition of solid political will that will draw in talent and investments.

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Essentially power is easiness of something.

Since we live in a physical world, power is tied to the abundance of physical resources = life is easy if there's plenty of everything you need. (That's what people aspire to: to live a life without worrying, to have it easy.) Anyway To have power is to control/have something others desperately want and need.

To have power is control physical resources, controlling those resources also means the ability to hold onto them. If a nation somehow gained immense wealth, others would try to invade it.

So what I'd propose is:

-A new scientific breakthrough makes a some over abundant, even nuisance of a thing in a certain country valuable. Computation works better if cool, so global warming could make eskimo world domination possible (this is a joke)

-An archaeological discovery of a meteor with precious stuff (Wakanda and Vibranium)

-Volcanic event that brings gold magma to the surface.

-Oil, or a replacement for it.

-Rise of a new leader/ally that brings promises, unites the people for a common goal, forms an alliance with neighboring exploited countries. People need something to believe in, if you have that you have the people and their resources, thus power.

-Just water, everyone needs water. (This is a free stock market tip.)

-The initial thing could be a rare thing found in the local flora or fauna that could cure something. Thus spurring the growth of the nation, leading to branching out to some other fields.

EDIT: If the country was exploited, the reason for that is the power the nation already has, but haven't not yet realized. You don't exploit a nation just for the giggles, there has to be a benefit to it. So they could just stood up to say "no." Now to just come up with the reason for the exploitation.

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