Topic: INFLATION IN THE UNDERDEVELOPED COUNTRIES - page 2. (Read 3712 times)

One of the best way to make the economy of country stronger and stable is the promotion of its local products. Instead of importing things from other countries, under developed countries have to focus on the production and promotion of their own products. Governments should make the products of their own country easily accessible and purchasable for the citizens. This will make the economy of country stronger.

It is true, the price of imported goods is always cheaper than local goods, but people should prioritize buying local products rather than imported products so that their country's economy can be more stable. And also the government in the country must provide full support for local producers including MSMEs.

In my honest opinion, the inflation in the underdeveloped countries are just the same as the other developing countries. It doesn't matter if a country is underdeveloped, developing or developed country because it all depends on the president or the leader that manages the country. Even a country is still underdeveloped but the president is a great leader then they can climb up into top spots of progressing country.

perhaps because imported goods are cheaper than the products of the country itself, so that domestic products are not sold and business actors are in difficult circumstances, so they need more foreign currencies. different from countries that export their products, of course the demand for fiat currencies in the country increases and can reduce inflation

I agree. Economic inflation in a country is sometimes caused by their consumptive society buying imported goods rather than buying products from their own country. As a result, the value of their currencies will be weaker so that economic inflation occurs.

There are ways that the government can control inflation and the government of these developing countries should also apply those same methods to fight inflation, but the funny thing is that they wouldn’t, because they don’t care, they only care about their selfish needs and they are part of the problems that their countries are facing, those in power are corrupt. Apart from the government, the rich citizens are also part of it.

Anyway, the ways that they can control inflation is through monetary policy, control of money supply, wage controls and fiscal policy. But like I said, they are not interested.

On the other hand, we have the new fiat money called "Eco" which is introduced by the following countries:

Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal and Togo

This money will be controlled by the ECB. So there is no place for China's interventions anymore.

Do you mean that Zimbabwe has to adopt China's currency (Yuan) after failing to pay the debt to China?



But on the one hand, only China offers help. The example of Zimbabwe was shunned by European countries due to human rights problems. The offer from China was immediately taken because at that time many mouths had to be fed and a starving stomach.

The Chinese strategy in Africa with the One Belt one road (OBOR) program is a duplication of American policy when siphoning China's national wealth assets when the US moved its industry to China in 1990 to 2000. But China modified its American strategy by making long-term binding so that Africa could not be separated from the grasp of China. America at that time forgot to bind China so that China did not depend on America but instead dared to challenge America.

China is carrying out massive infrastructure development in Africa, especially manufacturing that processes semi-finished goods into finished goods. Maybe for China and some people this is an exploitation. but for some Africans, despite the prejudice of exploitation, at least Chinese investment in Africa opens up opportunities for the wheels of the economy, which means that the opportunities for African people to get jobs are even greater.



I agree with you because it is in accordance with the Equation of exchange (https://en.wikipedia.org/wiki/Equation_of_exchange)

M x V = P x Q

M = Total Money Supply
V = Velocity of money
P = Price Level
Q = index of real expenditure


The equation above illustrates the relationship between the amount of money in circulation and the total expenditure of final goods and services produced by a country's economy. If the additional money supply is higher than the real GDP, the price level will generally rise

So the process of increasing the money supply will be better done when the economic level has increased so that there will still be a balance between the amount of money in circulation and the total value of goods/services.

For the case of Venezuela, the adoption of bitcoin and other cryptocurrencies is due to TINA (there is no alternative). Decades of Venezuela have often taken the policy of devaluing bolivars to turn the wheels of the economy.

But when America dropped a total economic embargo on Venezuela, this made cryptocurrency and bitcoin the only way out to protect the value of their assets. The question is whether the adoption of bitcoin brings improvements or solutions to the problems facing Venezuela. Is the adoption of bitcoin and crypto can be interpreted by resetting the system and return to zero. The answer is no.

Learning from the case of Venezuela, the government must be proactive to detect crises and find the root causes of crises and find a formula to avoid crises. even if they have been trapped in a wave towards crisis, at least they can make a formula so that the impact is not painful for the state, corporations, and citizens.

in my opinion if third countries or poor countries do not sell their natural resources out of the country it will make the economy of third countries will get worse. and in my opinion what causes third countries to experience inflation is too much debt, the weakness of the national currency against the US dollar and too many imports and also many cases of corruption worsen the country's economy. in my opinion to prevent inflation a country must increase exports from imports and also reduce its debt.

I wonder if new crypto payment system in their country will solve existing problems.
I mean it is actually harder for corruption to exist in it, but its still possible.

If the government of the country is made up of the majority of corrupt officials, then the country's policies are pursued accordingly.  In any case, the people do not get any benefits even from the use of cryptocurrency, since the government will do everything possible to rob a person even after the legalization of cryptocurrency.  The whole problem with the economy and social protection of citizens is primarily due to the corresponding government, which clearly needs to be changed.  In a country like Venezuela, it will be very difficult to use cryptocurrency, what did you do to stay incognito.

You are right this question is really more complicated than it looked initially. More developed countries have an extremely strong influence on less developed countries, which often have to dance to the tune of developed countries in order to maintain their economy at least at some level. Or for example, how the United States delivers products to Africa at low prices, completely killing the country's agricultural economy,
which is more expensive than buying cheap products from the United States. Thus, the United States provides its citizens with work depriving it of Africans.

right, as divenezuela, where it was reported that corruption there was rampant, so the country became chaotic in its economic system. to overhaul governance is indeed not easy, and requires time. until finally they use crypto to be the payment instrument

Hyperinflation is usually seen in countries where corruption is high and rulers do not care about the welfare of their citizens. Instead, they plunder their own country, selling its resources for small prices to more developed countries. The cure for hyperinflation is honest and loving rulers.

Trades is indeed necesssary for a country to grow but a country also need to make a higher valued product out of their raw materials and not just selling it off to foreign country. Most of the underdeveloped country always failed in this respective field and most of the exports are from private sector owned by foreign investors. A country can't grow without trade but will always stay poor if what they capable off is just selling things they have even worst if it's unrenewable resources.

no, it's called selfishness and selfishness only brings bad things to them. an economy without trade leads to poverty in that country. If a country is self-sufficient, then how can it grow when it is only made and eaten? when they have a surplus on a product, what do they do with it when there is no trade with foreign countries? they will certainly continue to be poor. So for poor countries, they also have to learn a lot about the rich countries' culture and continually improve production to make the country more developed.

They should be blamed for bad their economy is, especially their governments should be the ones taking most of the blame. If you check out these developing countries you will notice that their government is very corrupt. Most of them don't do things that would favor the country in general, because they are bent on pursuing their own personal gain rather doing things that would help the country grow.

Lots of them steal money from those countries and push them abroad to developed countries, why won't their countries fail? The worst part is that the foolishness of their leaders never end,they still continue their greedy, corrupt practices and the way I see it these countries may never be developed (of course, that's if they never change).

That's most of the case nowadays. The industrial country will always benefit from the immense value addition to the product they produce meanwhile the underdeveloped countries will just become a ricefield. That happens not because of lacking human resources but simply because of mismanagement and they keep doing the same mistake over and over again. The lack of support for entrepreneurship also contributes to the low GDP and underdeveloped countries seem to forget that taxes generated from the private sectors are immense. Most of the developed countries like South Korea, Japan or even Singapore have some kind of big corporation that takes some percent of the world market share meanwhile the underdeveloped countries have nothing or if there's a big corporation it just dominates their own country. Corruption and bribery are common practices and speaking from my experience, these are just too many it feels so stupid to even start a business. If an underdeveloped country will just stay that way, there's no room for them in the future. The economic growth in underdeveloped countries may seem promising with most of them reaching 5% but the world is going ahead and all those developed countries also racing to grow their economics and frankly 5% of $0.5 - 1 Trillion GDP economic is a lot less than 2.5% of $20 Trillion GDP economic.

Many underdeveloped countries do not have the infrastructure to transform their natural resources into something else that they can sell, so they do not really have any option and they have to export those resources to other countries, you may not like it but that is the way it works.

The current economic system has failed everyone except those that are at the very top and take the decisions since they know what it is going to happen and when and they can take advantage of this.