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Development economics - Coggle Diagram

- - - - • 50s, 60s, 70s were miraculous years, (Japan’s Golden Age).
      - • A time led by the “Liberal Democratic Party” a political party that ruled the country for almost 40 uninterrupted years.
      - • In the early 1960’s, Prime Minister Hayato Ikeda announced a plan to double the size of Japan’s economy in just 10 years.
      - • To reach the goal, the country needed to maintain an annual average growth of 7.2% for that entire time.
      - • 10 years later, Japan had far exceeded it’s goal. The country had multiplied the size of it’s economy by 2.8 because it had an average annual growth more than 9.3%.
- - - - • Rich countries have a lot of physical capital and a lot of human capital. Hence, that capital is organized using the best technological knowledge.
      - • More and better tools like shovels, tractors, cell phones, roads and buildings makes worker more productive. Tools in human mind or the stuff in people’s heads that makes them productive.
      - • Human capital – Produced by an investment in education and training by experience.
      - • Organization – Brings physical capital, human capital, entrepreneurs, technological knowledge for better production.
  - - - • Some countries have good incentives (WHY?)
      - • Because they have good institutions that create incentives that spur prosperity.
      -  Property rights
      -  Honest government
      -  Dependable legal system
      -  Political stability
      -  Competitive and open markets
  - - - • Some countries have good institution (WHY?)
      -  Ideas
      -  History
      -  Geography
      -  Culture
      -  Luck
- - - - • More tantalum required to produce phones. Australia was the main tantalum producer but getting that material was more expensive.
      - • It was quite complicated process to get a bit of tantalum out of it after chemical process.
      - • Coltan is a rock that contains a lot of tantalum and it’s very cheap to refine. Biggest coltan reserves on the planet is Congo. (Saudi Arabia of Coltan)
  - - - • GAM (World’s main tantalum producer) closes during that period.
      - • It’s closure lead to tantalum price skyrocketed. Therefore, coltan rush happened in Congo.
      - • No mining companies due to many reasons especially political reason, so guerrillas simply collected tantalum and sold it.
      - • Nobody invested for machinery because country was corrupted. No investors from other countries even though Congo have good natural resource.
      - • BISUNZU stopped production. (The only one company in Congo that produces tantalum) due to smugglers and warlords.