How do poor countries get rich?
thegoodblog.substack.com
thegoodblog.substack.com
The book's theory is that success starts by first focusing on productivity of agricultural land, to maximize output, not profit. To accomplish that, you need lots of farmers who are motivated to maximize output, which means land distribution so that farmers are working for themselves, rather than as laborers where the landowner takes all. Once there is a broad base of farmers, and the country has food sovereignty, limited import funds can't be drained away just to make sure everyone is fed. And once there's a broad farming base, that is accumulating savings, that means that 1) banks can start making loans for the beginning of industry, and 2) there's a strong farmer consumer base that can be customers of this early industry.
Countries like Japan, Taiwan, and South Korea that practiced land reform to wrench land away from idle landlords and distribute it widely, have had this success. And countries that feigned it, like the Philippines, have struggled in comparison.
Land really is different from capital, there's a finite amount of it, whereas more capital can always be made. Redistributing hoarded land should be a primary function of government, or at least a government that wants to grow the economy, rather than grow wealth inequality.
This “land distribution” point reminds me of a paper they claimed Spain fell behind other colonial powers like England and France because the resource they exploited was precious metals that allowed a few to get rich, but didn’t allow a middle class to grow.
Make me think of whether big tech does the same thing (if they can find a way to automate enough they can hire few people and few engineers)
In many western countries each of these industries has undergone massive monopolization, which in my opinion has driven not only wealth inequality but knowledge inequality--there are now many millions of people who couldn't actually set "the system" up if the oversight vanished because they don't have any real ownership of its components.
Taiwan and the "Land to the Tiller" Program by John C. Médaille
https://cooperative-individualism.org/medaille-john_taiwan-a...
Brings up the point that some countries with similar land reforms (e.g. Mexico) didn't achieve the same result, but generally casts a favorable view of the book.
Slumlord properties have the same theoretical problem as land, in that concentrated ownership can act as an incentive towards bad management; there's not much economy of scale when it comes to managing rental properties, so policy should incent dispersed ownership instead.
You can't be incentivised to create art when you will never realize that incentive. And unlike music record labels, it's not like you are giving someone else your earnings in exchange for editing and technical help and marketing.
Art was a bad example, though, since it's mostly just used as a tax dodge. The real problem is rent seeking.
Wealth* that is not doing anything has no effect on the economy. Suppose I had $100 trillion in cash (or art, or other useless commodity) in a vault somewhere, and never spend a dime of it. How is it impeding the economy? If I didn't tell you about it, you wouldn't even know it existed.
It's only when I start spending it, to redirect labor per my wishes, that I start affecting the economy. If I spend it all on yachts, that will cause a lot of labor and materials to go to yachts that won't contribute anything to the economy once built, instead of going to something more productive.
*Using "wealth" to mean fiat money, or art, or anything that has no productive use. E.g. if the wealth was instead in the form of idle farmland, that would be used to grow food if owned by someone else, then yes, that would be impeding the economy. So one must distinguish between wealth with inherent value, and wealth that only has value because people are willing to pay for it.
but it does exist and is "missing" from the economy (i.e. other peoples pockets)
No, but people constantly shout "money printing" when the money supply goes up even though it could be as a result of people producing more physical capital.
Imagine producing more physical capital and being told you don't deserve liquidity in proportion to the capital/value you produced. That is the problem with a fixed supply currency system like the gold standard.
Why is it a problem to keep the money supply fixed? Imagine a theoretical economy where 100% of the money is in the hand of a single person. Even though the rest of the economy is able to produce and barter, it would be far more efficient to use liquidity i.e money to facilitate the division of labor. That one guy with all the money is effectively blocking the public infrastructure we call money. Transactions that ought to happen don't happen. Money doesn't fulfill its function as a medium of exchange. Therefore it is only appropriate to tax people in proportion to the damage they cause to the economy by excessive patience and holding excessive amounts of liquidity. It like an illegal parking fee intended to keep the streets free.
Actually that would result in a manufacturing industry. The problem is that if you wanted to buy a Yacht in say south Africa you wouldn't manufacture it in South Africa despite the mass unemployment problem.
The amount of production is not impacted much by how how many bushels of wheat, or days of labor of the average worker, we value the Mona Lisa. Art can be wealth, but not all wealth is a factor of production. Labor, land, capital are all factors of production that influence how much stuff is made.
Making sure that everybody has enough to survive, enough to thrive, and enough to be creative and innovate or achieve what they want should be the goal. Distribution not only of wealth, but perhaps as importantly, distribution of responsibility and authority so that people can make the best possible decisions for themselves. Redistributing away from the accumulation of power/wealth into too few hands is very important for that.
Although more capital, in theory, can just easily be made - if the incentives are not in place - it appears to have the same problems as getting past the agricultural stage.
So it seems like a parallel to me why advanced economies might stagnate.
How to keep capital 1) maximally productive, rather than rent seeking, and 2) keep capital from fleeing, are all about what incentive structures the government sets up. And for every single industrial country, government policy has been key to growing infant industries into functional, independent, adult economies.
At every stage of economic development, the rules seem to change for of which policies enable or maximize economic growth. (I fear the US is starting to flub it now, but they may still save themselves!!)
Land reform was one element. The other, despite the article's unqualified praise of "open up your economy to foreign investment and trade", is trade restrictions and various forms of state meddling to support local industries. I don't need to point out how difficult China makes it for foreign firms to operate in their local market. Per James Galbraith:
" ... none of the world's most successful trading regions, including Japan, Korea, Taiwan, and now mainland China, reached their current status by adopting neoliberal trading rules." - https://en.wikipedia.org/wiki/Comparative_advantage#Criticis...
So it isn't so much "as a rule" as "as a rule when the government has been refulatorily captured."
In fact I think you will find that most industries that are built only happen through lots of government "interference." Silicon Valley is an excellent example of this, as the early customers were all defense industry largesse. And without those extremely rich customers with very extreme technological needs, development of Silicon Valley would have stalled, or perhaps not happened at all.
The examples of those successful Asian countries implies that the tradeoff is well worth it.
And the examples of many, many countries which used "industrial policy" to implement awful ideas like import substitution (i.e. "developing" towards autarchy, not increased trade openness and market discipline) can imply the opposite.
I'm not sure that this is correct, the theoretical argument for supporting infant industries is quite old and well known by now. The main remaining question is an empirical one, of whether you think that industrial policy as it's actually practiced in the real world is generally worthwhile. Those who advocate against government meddling argue that it mostly isn't.
Why does exporting come with the expectation of providing employment to countries who could not build competent industries. I am not anti-immigration, I am an immigrant myself, just trying to understand your argument.
I think economic immigration has nothing to do with trade imbalance, and all to do with quality of life. As an example, India may be exporting more to Greece, but there are many Indians who would rather live in Greece, and none in the other direction.
Sometimes you simply can't compete with another country with really devalued currency and very low wages
and you know, sweatshops. people opted to work in one because it was better than trying to make it in whatever rural village farming rice and hope.
the problem is not the economics, but the politics. the elites who got filthy rich on this don't want to move to the next stage.
I'm no absolutist, each country has to balance a whole host of local conditions and needs. They also need to build a consensus. However the fact is they liberalised trade and investment, and that's what brought success. There were preconditions to being able to do that, but it's still a fact.
But I suspect we agree - different trade policies are needed for different stages of development. Fledgling industries need protection, while mature industries want to expand into foreign markets.
Where conflict arises is when mature industries want to expand into developing markets, crushing any local competition. Sometimes this is mutually beneficial (not every country can have leading edge semiconductor fabs), other times it is not (nobody needs McDonald's to feed their country), but those industries will still lobby for trade deals for market access, and use neoliberal trade theory to justify it as mutually beneficial.
A couple counter-arguments to that:
According to Milton Friedman, after Japan was forced by Western powers to remove trade restrictions and drastically lower tariffs in the late 1800s, it prospered, contrary to what the mercantilist theories of the time predicted:
https://youtu.be/CWgNe8v6KFc?t=322
Also, there is much evidence dispelling the mythologized account of MITI's role in the expansion of the Japanese economy specifically:
https://www.econlib.org/library/Enc1/JapanandtheMythofMITI.h...
The article notes much more foundational properties of the 50s/60s Japanese economy, like a smaller portion of private sector output being taxed to support the public sector, as more likely causes of its growth:
>>"The fact that the tax burden is unusually low by the standards of other developed countries may alone be a significant factor in the explanation of the high rate of private saving and investment in Japan." From 1951 to 1970, while Japan's real GNP was growing at an average of 9 percent per year, total national and local taxes (excluding social security) fell from 22.4 percent of national income to 18.9 percent. This left more money for people to save and invest. Compare Japan's situation with the United States, where the proportion rose from 28.5 percent to 31.3 percent. Interestingly, Japan's two decades of greatest postwar growth were also its decades of lowest taxes. During the seventies, as Japan's taxes rose to 22.8 percent of national income in 1980, real GNP growth declined to only 4.8 percent. Higher taxes weren't the only reason for this deteriorating performance, of course; oil price increases also contributed.
This graph demonstrates how much lower social welfare spending used to be in Japan:
https://ourworldindata.org/grapher/social-spending-oecd-long...
Frontline: Coming From Japan [The Fall Of The US Television Industry] (1992) https://www.youtube.com/watch?v=aesJTsZqm6c
https://www.washingtonpost.com/archive/opinions/1990/09/30/j...
"JAPAN AND THE BIG SQUEEZE September 30, 1990. HOW DID Japan destroy the American television industry? The secret history of that strategy reveals how Japanese manufacturers and the Japanese government first created an anti-competitive cartel ..."
"Japan's raid on the American market dates back to 1956, when the largest Japanese manufacturers formed the Home Electronic Appliance Market Stabilization Council, an illegal production cartel. The intent of the cartel was to monopolize the domestic market for television receivers, radios and other home electric products and to exclude foreign imports. Once their home market was secure, they would launch a drive against the far richer American market."
https://www.chicagotribune.com/news/ct-xpm-1987-04-23-870131...
"TARIFFS WON`T AFFECT MOST JAPANESE TV SETS Apr 23, 1987 The new tariffs on Japanese color televisions will have little or no effect on the U.S. market, because most sets are exempt."
and? what's the counterfactual? what would have happened otherwise?
trading is important, but politics is the critical factor. trading provides the inflow of wealth, if it gets allocated in a way that inequality just keeps rising, then the beneficiaries will eventually capture the state and then revert/regress to whatever anti-competitive shit they will think of to enrich themselves.
the problem with neoliberal policies is that they are not enforced, and what we got on a global scale is libertarian idgaf-ism. WTO members should have loudly levied serious tariffs on China (and others) who don't reciprocate the various policies required for doing business as foreigners.
Singapore showcases this very well. The ethnic Chinese and the Indians are very much focused on pursuing education for their children, even back in the early colonial days and that has led to great success for that portion of the population. The Malays however, have a more idyllic bent in their cultural preferences and that has led to a more impoverished life overall in their population.
Maybe it’s because the early Chinese and Indians were imported by the British and brought with them the stereotypical immigrant work ethic while the Malays were indigenous and didn’t have the same kind of drive.
Without a solid economy you just end up with like 30% unemployment rate where a large percentage of those unemployed hold higher degrees (masters and PhDs).
Network effects: Tunisia is quite close to Europe.
Visa Access: It's limited but still https://en.wikipedia.org/wiki/Tunisian_diaspora vs https://en.wikipedia.org/wiki/Overseas_Chinese. Relative to population size, Tunisians moved more overseas.
Geographically close to Europe but I bet Europeans/Americans do not feel that way. Again due to various factors.
VISA: For Asians there is one advantage - they have some established characteristics - like hardworking, reputation in IT etc. Again not to say others do not have it but when people talk about IT guy/girl they refer to Indians or Asians - NOT Tunisians.
I don't think education alone is enough for the path to richness in a nation. Tunisia is still stuck with an inability to re-innovate and free its economy, and resolve its corruption issues. I don't think centralized government is the answer either (neither is industry as some comments suggested; Tunisia could have jumped directly from an agricultural to an information economy, but so many things went wrong).
Maybe it's the Mediterranean? There is hardly any Mediterranean country that had economic success in that same time-frame.
> you just end up with like 30% unemployment rate where a large percentage of those unemployed hold higher degrees (masters and PhDs).
The other question is how valuable really are these degrees? I don't recall Tunisian universities being particularly sought after.
I think it would be economically better, though politically impossible, if India experienced a great deal of farmland consolidation. How is a guy that only farms 1.2 hectares supposed to increase his income? Buy a farm truck or tractor? Increase efficiency? He's stuck doing everything by hand and making $1000 a year.
Sure, there might be some truth to the statement that an average US farmer is more efficient than an Indian farmer. But, the reason that an average India farmer is only doing 1.2 hectares compared to the US farmers is not that Indian farmers are inefficient at farming, it's just that there are at least two orders of magnitude more farmers in India (and that's their livelihood) compared to the US.
edit:formatting
Also the most profitable farms aren’t the largest ones, which are often dedicated to growing common grain like wheat and rice, and sugarcane. These crops would be bought by the government at prefixed prices. And the assured income again leads to a lot of fighting and influence mongering, and ironically much smaller takes for the average competing farmer.
Quite unexpectedly, the highest profits are made by farmers who manage to get smart financing and grow niche crops like fruits, some vegetables, flowers, organic, cash crops etc. The highes profits in India are always made by people who carefully avoid government and activist attention, assistance, benevolence, interference.
This is an interesting view. how did they avoid being punished for this?
Zimbabwe tried redistributing farms but it turned out horribly for them.
Would be interested In understanding how Zimbabwe attempt was different to these countries.
Here in South Africa land reforms is a politically charged issue. Due to apartheid we have a deeply unequal society, where productive farm land is concentrated in primarily in a few hands. Split along racial lines.
I recall meeting some labourers on a farm here in the western cape. They worked on a farm that had been “claimed” by colonisers who arrived in the 1800’s, and then handed down in families.
Where as this labourer ancestors has been in that area for generations before the colonisers got there.
It actually didn't. It tries to buy out land but then noticed that it ran out of money. After that they hired thugs to get white farmers off their farms. They didn't give the new black farmers any method of financing their business which led to failed farms. Finally they gave the land to political allies who don't farm at all.
A simple land value tax would have prevented this nonsense.
Zimbabwe redistributed the land without the necessary infrastucture or know-how to till the land and produce output.
Therein was the whole failure.
Recent history of Zimbabwe: <http://imgur.com/a/VdQdD>
The keyword here is "idle". An "idle" landlord is unproductive and unlikely to riot. What happened in Zimbabwe is a power grab. It's usually the leaders taking a nice pie, and sharing the rest with the (in this case black) poor population. This destroys whatever little wealth the country had.
Yes. That's a good book.
It's not "land reform", though. It's agricultural modernization. Farming needed to be mechanized to free up labor for manufacturing. The "Asian tigers" had far too many people tied up inefficiently growing rice. Then they could start exporting.
Most poor countries are past that point now, though. Today's poor countries have too many people in cities. And everybody can't be a net exporter.
The East Asian development model adds to export oriented manufacturing financial repression and land reform. Financial repression in this context is the state controlling people’s savings and through a combination of law and incentives, increasing the amount that’s invested in domestic manufacturing firms. Key tools of this are capital controls, which prevent capital from leaving the country to get higher returns internationally, political influence over bank lending, and currency devaluation which in addition providing advantages to exports reduces consumption and increases savings.
The other thing is that the economy is like an ecosystem - the richer it gets, the more nooks and crannies open up that can host thriving systems. That’s how a complex, rich economy can keep growing exponentially. Human needs are not limited - there’s always a way to improve life for someone.
You'll see this where everyday shelf stable goods are more expensive in developing nations than in the usa.
I don't think it was a coincidence that all of the Asian countries had strong central governments with commitments to long-term planning, at the times of their ascension. Even today, they send hordes of students to American engineering universities, as if the aggressive industrial policy never ended. At CMU, there were roughly as many Singaporean, Thai, Taiwanese, and Korean students (i.e. each of them) as there were students from the Midwest, in the engineering program I was in. And they were much much better prepared for the material than 9 out of 10 of the American students. From them, I gathered a picture of societies that had strong policies designed to build out the kind of economy that poor countries would love to have. Liberal, it was not.
High tech industry requires both a policy that allows them and access to the international market, for both buying and selling.
Your claim that all countries got rich via aggressive industrial policy doesn't make sense to me.
What was this policy in the US? What was this policy in Western Germany after WW II?
Their main strategy was to allow creative destruction, through strong institutions. The most important probably the rule of law.
https://www.wikipedia.org/wiki/Samuel_Slater
> Samuel Slater (June 9, 1768 – April 21, 1835) was an early English-American industrialist known as the "Father of the American Industrial Revolution" (a phrase coined by Andrew Jackson) and the "Father of the American Factory System". In the UK, he was called "Slater the Traitor"[2] and "Sam the Slate" because he brought British textile technology to the United States, modifying it for American use. He stole the textile factory machinery designs as an apprentice to a pioneer in the British industry before migrating to the United States at the age of 21.
West Germany after WW2 did have strong industrial policy, and up to now it's one of the European states with the strongest industrial policies.
See: https://en.wikipedia.org/wiki/American_System_(economic_plan...
I would agree that the "liberalization" theory has been fairly well disproven, and is nearly laughable. But the post is not propaganda, as it mentions competing ideas that IMHO are much better.
The other bit is that over a quarter of the worlds population are currently under US sanctions. With much of the world acting in lockstep so as to stay in the good graces of the US[2].
Looking at what Cuba has accomplished just in its biotech industry while under crippling sanctions (for 60 years) makes me think they could really flourish without the sanctions[3].
My argument is that it is necessary to end sanctions for a county to flourish, but it is not sufficient. For instance, ending sanctions and returning seized funds will not make a country like Afghanistan into a rich country (it may prevent an estimated 1M children from dying of starvation due to US sanctions, though[4]).
[1] https://news.sky.com/story/cyber-is-changing-war-but-its-pea...
[2] https://en.wikipedia.org/wiki/United_States_sanctions
[3] https://www.ineteconomics.org/perspectives/blog/how-cuba-bec...
[4] https://www.ft.com/content/b038dec2-a49d-46d5-b187-3dd7216a2...
The general trend in poor countries with exportable raw materials over the 20th century has been this: wealthy and powerful countries make deals with small groups of elites to extract those resources and ship them to the wealthy countries industrial production sectors at relatively low prices, while propping up the local tinpot dictators with weapons and cash so they can keep control of their populations. Saudi Arabia is one example (America being the wealthy patron), Niger is one example (France's supply of uranium ore), and that's how the Soviet Union operated in the various 'stans of Central Asia as well. The poor countries may have 'become rich' but in general, their average standard of living remains extremely low relative to the industial wealthy powers.
The only way for such countries to raise their overall standard of living is to add value to their raw materials domestically by building up their manufacturing potential. For example, if they have lithium deposits, they should be building factories to convert the lithium into batteries, and then sell the batteries on the global market. Now they have an industrial center, which brings in revenue, and they have begin to have a well-paid professional sector, medical and legal experts, a higher standard of living and so on.
At least until their brilliant financial gurus realize they can increase their personal wealth 50-fold by shipping the entire industrial sector to some Third World hellhole and wrecking the whole system, like Wall Street did to the Rust Belt in the United States.
Saudi Arabia's nominal GDP per capita. Their GDP (PPP) per capita is more like $50k - comparable to the United Kingdom, which has significantly better living standards.
The point here is, Saudi Arabia is not particularly wealthy, and that, not their inequality, mostly explains their low standard of living. It is not the case, as the thread-starter implied, that Saudi Arabia has a high GDP but due to massive inequality it's all in the hands of the royal family.
Best example is Russia.
They few decades tried to make all things at home, naming it import-substitution ("импортозамещение").
Really they need this because they want to conquer world, and manufacture independence need to withstand sanctions.
And in reality they got extremely criminalized economy, and economy slowdown, because it is much easier to falsify documents, to claim mostly Chinese produced goods, than to really make own production. Same thing practice Ukraine and most other ex-USSR countries, with same result.
Second is that regulations vectored to limit access of imported goods, inhibit economy, because they limit access of business to really need things.
For example, Ukraine have high import taxes for automobiles, to support internal auto producers, but in reality, because of this limitations, we have prices for same machines, few times higher than in neighbor countries, and small business cannot buy automobile and lot of business are not opened at all.
These import barriers are so powerful brakes, that even last years chain of open market agreements with many countries, does not help to grow gdp much, we have grow of potential markets for 1000% in 10 years, but gdp grow less than measurement error.
Korea was poor country before economic liberalization, and before them jailed president :)
To be strict, none of mentioned methods alone could be driver for grow more than for few percents, and to grow faster, need to make them ALL good enough, comparable to developed countries of old democracies.
https://www.conradbastable.com/essays/the-full-stack-of-soci...
A lot of folks on HN have liked and shared it before so I feel like it's okay to share again.
My core thesis is that there's a stack of wealth-building strategies:
- Feudalism, aka "take & tax other people's productivity" (this is zero-sum)
- Mercantilism, aka "sell someone else's productive outputs into someone else's consumption"
- Industrialism, aka "Mercantilism but with production brought in-house"
- Globalism, aka "export Industrialism to make your customers richer so they can buy more of your products"
- Financialism, aka "centralize and allocate flows of capital across time to accelerate any of the other layers in the stack"
In reality, most successful countries combine a couple of these, but one tends to be dominant at a time. Most large countries today have passed through this stack and are currently in one of the final 3 layers.
A handful of small, well-positioned countries are able to run unique strategies based around supporting neighbours. I chose not to focus on these because they tend to be very specific (e.g. Singapore can only be Singapore because it's located in Singapore, Ireland needs to be in the EU for its tax arbitrage to work, etc.).
I would also +1 to epistasis's suggestion in the top comment -- How Asia Works is a great book. If you read it, also read Miti and the Japanese Miracle. My chapter on Industrialism links to those and other related sources.
The title is something lots of people are interested in, but then the author has lists sources, no evidence and doesn't even write a profile about who they are.
As you point out, it's obvious none of the claims are supported by evidence, and there is no appeal to authority ("this is who I am"), which qualifies this as an opinion, and should be taken as such.
Which means that any reasonable person should, before they make their own opinion, look for evidence for or contradictions to the posted opinion, and use that to make a more informed opinion.
Now, the fact that a majority of internet readers are not reasonable is where we should be worried, not about someone sharing their opinion in a modern day bar.
(Interestingly, the fact that those same people never thought to critically look at "official" news on TV/newspapers is a symptom of the same problem before the internet.)
The conclusion is, that the administrative and judicial system needs to work for the poor, too; and there needs to be a process that is somewhat practical to go from black/ gray economy to fully legal status.
He and team did historical research how that process was very similar in all countries now rich; and showed by experiment that same process is a rich privilege, or extremely costly and inefficient for everyone else (often due to hesitation to overturn nominal property rights in conflict with factual reality). The experimental study was done in a number of countries in the so called developing world, Egypt, Peru, Malaysia among them iirc, covering quite distinct cultural backgrounds, and consisted in following real life cases (over many years).
As long as we have modern colonialism and unbalanced currency valuations, the poor will stay poor.
Eg - The irony of mentioning poverty traps, when all Western countries still have massive poor classes that experience them is lost on the author and audience.
The also didn’t seem to include “dig something valuable out of the ground and sell it” as an option.
As it happens, I'm typing this in a mid-tier Vietnamese city of some fame as a beach resort. Coming out the War of American Aggression (as they call it here), Vietnam had a hardline Communist government and sub-Saharan Africa levels of poverty, with most people earning a dollar a day or less, but in the 1980s they finally started experimenting with capitalism. When I first visited this city in the early 2000s, there were a few hotels, but they catered almost exclusively to adventurous foreigners.
In 2022, the equation has been flipped completely on its head: the beach is packed side to side with highrises that could easily be in Miami or the Gold Coast, and 99% of the visitors here are now locals. This applies even at the top-end places like the Western chain hotel I'm staying at, which is completely booked out, and the expensive seafood restaurants: the one I ate at tonight was doing a roaring trade in imported Alaskan king crabs selling for hundreds of US dollars each. And for every hi-so there's 10 or 100 regular folks on company-sponsored getaways and the like, and behind every domestic tourist there's the local low-cost airline with its air crew and ground staff, the Grab (Uber) driver, the tour guide, the IT guy sorting out the hotel's networking, etc etc.
Rather than ancient Chinese philosophy, this mindset was probably more driven by https://en.wikipedia.org/wiki/1997_Asian_financial_crisis
So in countries where the middle class is under constant attack via corrupt use of their taxes, such as my home, economic development cannot really happen. Everyone is living hand to mouth and not able to take risks or invest.
A rich country is a country with money and capital. It doesn't mean that the country is a good place to live
I have no idea how rich Saudi Arabia actually is but where are there no beggars?
- low wage, high volume, light industry for export - lower wage, high volume, heavy industry - multi-decade protectionism to raise global competitive domestic champions - no democracy, if you can help it to ensure political stability to execute multi-decade strategy
Idiosyncratic caveats:
- Japan got its boost particularly by becoming the arms manufacturer for the US in the Korean War
- Singapore / Hong Kong also had financial liberalisation / international money laundering for the Brits
- Korea / Taiwan / Hong Kong also had shipping
China has followed clearly the same trend (note the irrelevance of the political system, main thing is to avoid democratic instability), simply becoming more massive than any before because it is inherently massive, and has therefore even greater economies of scale to leverage.
Brazil does have logistical problems, but your characterization of them is completelly off. And, by the way, the Amazon isn't logistically "on the way" for anything. The parts that aren't in reach from some quite large ports do not host many people or economical activity.
Economic growth started in the mid 19th century. Industrialization began, the old guild system was abolished, and there were fancy new things such as public education, own currency, and railroads. When Finland gained independence during WW1, it was largely a formality. There was still a bloody civil war, and Finns didn't really start working together until WW2.
When WW2 ended, Finland was still largely rural. There were war reparations to be paid and refugees from lost territories to resettle. While Finland had leaned towards Germany until then, it was no longer possible, and Sweden became the new role model. Finland focused on heavy industry and technology. People started moving to cities (and to Sweden). Because Finland was a special case as the favorite capitalist country of the Soviet block, trade with the USSR became lucrative. The economy was mostly free but not fully open, and the occasional devaluation of the currency was a key financial tool. By the 1980s, Finland had become a wealthy country.
The end of the Cold War was a catastrophe. Trade with the USSR/Russia collapsed. Business leaders didn't know how to operate in an open market. The government didn't know how to deal with that. The result was probably the worst depression in Finnish history. Other political choices of the time (such as joining the EU) were better. The next center-left/center-right coalition made some good choices, as did Nokia. After 2000, Finland started regularly appearing near the top of various "top countries by [a good thing]" lists.
As an answer to the question: stable, somewhat competent and non corrupt government.
Good luck with that.
Their growth is mainly triggered by rolling back the horrendous policies of the Great Leap Forward.
A coastline, access to ports and, regular and reliable rainfall, moderate climate with little danger of natural disasters all helps.
Less viable Asian Tiger export driven route:
-Be authoritarian.
-Establish domestic serenity via state violence.
-Have maritime access.
-Be geopolitically strategic to US interests at heigh of hegemony.
-Align as satraps and be subsidized by US.
-Create export driven industrial policy to climb up value chain.
-Educate population
Still viable extractive state route.
-Be authoritarian.
-Establish domestic serenity via state violence.
-Have maritime access.
-Have resources.
-Don't be sanctioned by US.
To get to upper income fast:
-Helps to have small population.
-Have access to cheap migrant labour.
Historically, start with:
-Be authoritarian.
-Establish domestic serenity via state violence.
-Have access to cheap slave labour.
Also very important, I think, are literacy and education in general, which is more available than ever before (see for example other discussion around WGU and BYU Pathway Worldwide, like at https://news.ycombinator.com/item?id=31180816 or in wikipedia). They are accredited, online, and tuition at least for BYU Pathway Worldwide is vastly lower for students in poor countries, with support system etc etc, even if one doesn't yet know English.
There are just so many opportunities, if we are willing to strive to be consistently honest and decent toward each other (...and of course, work and plan, as others point out in various ways...).
edit: more at my web site (in profile, simple, skimmable, & nothing for sale).
Thoughtful comments appreciated with any downvotes.