If Africa is ever lifted out of debt and poverty…

A question from Yahoo! Answers:

What will happen to Western economies if Africa is ever lifted out of debt/poverty?

In order for Africa to be lifted out of debt/poverty, the Western capitalists will have to stop exploiting Africa. If this ever does occur, how can our capitalist economies in the west function without exploitation?

First of all, there is no relationship whatsoever between debt and poverty. One of the most heavily indebted nations of the world is in fact Japan, which is far from poor; there are plenty of heavily indebted nations in Europe as well…

So what will happen to Western economies if Africa is ever lifted out of poverty? Pretty much nothing. Africa, unfortunately, is a very small part of the world economy and even smaller part of world trade. So whatever happens in Africa tends to have very little impact on the rest of the world…

The World Bank classifies countries into three major groups, low-income countries, middle-income countries, and high-income countries. Low-income countries (there are 54 of them, over 30 of them are in Africa) as a group account for about 3% of world GDP; the combined size of these 54 economies is less than that of Italy. Even if low-income countries as a group nearly quintuple their per-capita GDP (which will put them in the middle of the middle-income group and make the combined size of their economies bigger than that of Japan), they will still account for less than 13% of the world GDP… Sadly, though, it doesn’t look like this is going to happen any time soon…

Sources:

World Bank Development Data:
http://devdata.worldbank.org/data-query/

List of low-income countries:
http://devdata.worldbank.org/data-query/…

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