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Corruption is often the cause of the World's Worst Economies

There have been significant changes to the 2011 list of countries. Traditional losers like Ghana and Zimbabwe got their economic acts together, while other countries (Armenia and Jamaica) marched into the lower ranks of the list. Due to continued political mismanagement, corruption, poverty and lack of growth, The retail price of basic food items has doubled and some countries in the African and South American continents are losing thousands of jobs.

All of the indices that reflect human development suffer. Where government doesn’t work, economies don't grow. Due to manmade problems like military coups, economic mismanagement, ineptitude of the rulers and steady population growth that landed countries like Madagascar on the top of the list of the World’s Worst Economies in 2011, based on data tracked by the International Monetary Fund and transparency international.

Unfortunately there are worse basket cases (see: Somalia). The Forbes list (see link below) ranks 177 countries according to three-year average statistics for gross domestic product growth and inflation (including the IMF's 2012 estimates), plus GDP per capita and the current account balance, a measure of whether the country is importing more than it exports.

No. 1 Madagascar's poor economic performance mirrors the turmoil in its politics. After gaining independence from France in 1960, the country went through a brief period of prosperity. But per-capita GDP has trailed most of the rest of the world since the early 1970s as Madagascar's population has grown faster than the economy.

No. 2 is Armenia, whose economy shrank by 15% in 2009 as an expatriate-financed construction boom fizzled along with the world economy. With a mediocre growth forecast for the next few years, this landlocked former Soviet republic, dependent upon Russia and Iran for virtually all of its energy supplies, is struggling to keep up with the rest of the world. Per-capita GDP of $3,000 is less than a third of neighboring Turkey, and inflation is running at 7%. On top of that, Russia cut back on supplies of diamonds, hurting Armenia's once-thriving diamond-processing industry.

No. 3 is Guinea, a West African nation that sits on half the world's accessible bauxite reserves but has trouble attracting productive investment. Poorly maintained roads, a 2008 military coup and "insecurity created by government hostility toward investment" have slowed economic development, according to the U.S. State Department.

No. 4. Ukraine has rich farmland and generous mineral resources and could become a leading European economy - yet per-capita GDP trails far behind even countries like Serbia and Bulgaria. The U.S. State Dept. blames "complex laws and regulations, poor corporate governance, weak enforcement of contract law by courts, and particularly corruption."

No. 5 is Jamaica, is almost entirely a victim of the global financial crisis that devastated its vital tourism industry. On the positive side: Jamaica's poverty rate has been cut almost in half to 10% in recent years while literacy has increased to 88%, according to the World Bank.

No. 6 Venezuela, which manages to keep its people poor despite an embarrassment of natural wealth. The only thing healthy about Venezuela's economy is its oil-fueled current account surplus. An inflation rate of 32% and subpar GDP growth demonstrate the ineptitude of Hugo's management. Nicaragua, too, suffers under a president who purports to support "the people" but has led his nation into subpar economic performance that only hurts the poor.

See Transparency International’s World Corruption Perception Index for 2010

Source: Own research and Forbes Magazine