(^492) THE WEALTH AND POVERTY OF NATIONS
growers sought to upgrade their raw cotton and weavers looked for
ways to make high-quality cloth with poorer varieties. Never underes
timate the ingenuity of good technicians: before the Egyptians could
turn around, they were stuck with poor cloth for the home market and
had lost part of their export market for raw cotton. Egypt, unfortu
nately, was not the only example of industry aborted. The African con
tinent abounds in projects and disappointments.
Failure hardens the heart and dims the eye. Up to now, Middle East
ern losers have sought compensation in religious fundamentalism and
military aggression. On the popular level, prayer and faith console the
impotent and promise retribution. Hence the apocalyptic tone of much
Muslim preaching and discourse: the End will bring redress. Mean
while, the strong resort to force. They find it easier to seize and screw
than to make and do. So for Iraq, which thought to get rich quicker
by grabbing oil and looting houses in Kuwait than by manufacturing
salable commodities. Why buy arms if not to use them?
Will these counterproductive tendencies pass? Impossible to say.
They are not accidental but visceral. The international experts keep
their chin up (that's what they're paid for) and offer modest recipes for
improvement. Thus the World Bank, with its talk of "adjustment," re
minds us that good policies pay. What are good policies? Realistic,
competitive exchange rates, low or no budget deficits, low or no bar
riers to trade, markets, markets, markets.
Such "improvements in the macroeconomic framework" do help.
They clear major distortions and obstacles. But they do not come easy.
How does one eHminate budget deficits when half the workforce is em
ployed by the state unproductively and political stability is tied to in
efficiency? (This kind of problem afflicts even rich nations. Look at
Europe and the Maastricht criteria for the euro curency.)
And that's only the beginning. The real work of building structures
and institutions remains. Besides, what happens when the oil is gone?*
Latin America has had almost two hundred years of political indepen
dence to graduate to economic independence. It remains, however, a
mixed area, wanting in local initiatives, technologically patchy, entre -
- Field, Inside the Arab World, p. 21, points out that at rates of extraction in the early
1990s, oil in the Gulf has 130 years to go. (The assumption, of course, is that we know
what's there. People are still looking.) But that's the Gulf; for other oil producers in
the Middle East and North Africa, the end is nearer. Meanwhile progressive exhaus
tion is an incentive to a search for new energy technologies. In the end, for oil as now
for coal, a fair amount may be left in the ground.