The medieval China was bright lit by new inventions and ideas. During the Sung period (AD 960 -1270), the Chinese invented paper, waterwheels, water clock, gunpowder and (possibly) compass. These inventions would have made the economy of the country to boom rapidly, but surprisingly the country’s economy stagnated. It was Europeans who made use of these inventions and grew faster. Why was medieval China stagnated? A research done by an economist (William Baumol) in 1990 states that China was stagnated because of the low social status accorded to the individuals engaged in entrepreneurship, commerce and industry. So medieval china did not develop an entrepreneurial class and their technological advances were not translated into economic growth.
There are these kinds of signs in the Maldivian economy as well. Some of the most important industries are considered to be of industries for lower social class. Yet people in these industries could be individuals with high potential to innovate. Normally these kinds of ‘social classification’ have come culturally but even now we can see that social division is being fed and grown. Resultantly it acts as a moral disincentive to the productive people.
For example, fisheries sector is considered to be a sector for people from lower social class. Consequently, the industry was handicapped with only a few advances by our own fishermen. Most of the innovations to the industry were adopted from a foreign country. The point I want to highlight is that this is not a problem with fishermen. Fishermen work very hard but they lacked incentives to develop. These disincentives are mainly driven by their lower social class.
An opposite interesting case is the social status associated with women. This is a case that virtually applied to the whole world. As social status given to women are improved, the productivity and hence the economic growth increased in many countries. Women participation in the economy increased significantly.
It can be said that there are few opportunities and incentives for creative and innovative people in the Maldives. Vulnerability and Poverty Assessment survey done by Ministry of Planning and National Development in both 1997 and 2004 shows that self-employment and employers in the country has fallen significantly. Number of employers have halved while the self-employment fell by 19% in 7 years. These numbers suggest something. In my opinion, it is stating that the Maldivians are facing hardships in starting businesses and continuing them. There are huge barriers in front of people who are trying to make a career themselves. There are powerful forces pushing new entrants down. It could be the bureaucracy and laws or anti-competitive practices by leading business people or low incentives to individuals who want to create something on their own. It is a combination of these and several other factors.
We need to change our way if thinking and avoid harmful social classifications to make our people more productive. We need to provide incentives (both moral and economic) to make them think, research and find new ideas and technology. We need to encourage and appreciate our people’s ideas to make it fruitful.
References
Bernanke, B.S, Olekalns. N, Frank, R.H. (2005), Principles of Macroeconomics, Australia
Ministry of Planning and National Development (2004), Vulnerability and Poverty Assessment II – Preliminary Findings.
There are these kinds of signs in the Maldivian economy as well. Some of the most important industries are considered to be of industries for lower social class. Yet people in these industries could be individuals with high potential to innovate. Normally these kinds of ‘social classification’ have come culturally but even now we can see that social division is being fed and grown. Resultantly it acts as a moral disincentive to the productive people.
For example, fisheries sector is considered to be a sector for people from lower social class. Consequently, the industry was handicapped with only a few advances by our own fishermen. Most of the innovations to the industry were adopted from a foreign country. The point I want to highlight is that this is not a problem with fishermen. Fishermen work very hard but they lacked incentives to develop. These disincentives are mainly driven by their lower social class.
An opposite interesting case is the social status associated with women. This is a case that virtually applied to the whole world. As social status given to women are improved, the productivity and hence the economic growth increased in many countries. Women participation in the economy increased significantly.
It can be said that there are few opportunities and incentives for creative and innovative people in the Maldives. Vulnerability and Poverty Assessment survey done by Ministry of Planning and National Development in both 1997 and 2004 shows that self-employment and employers in the country has fallen significantly. Number of employers have halved while the self-employment fell by 19% in 7 years. These numbers suggest something. In my opinion, it is stating that the Maldivians are facing hardships in starting businesses and continuing them. There are huge barriers in front of people who are trying to make a career themselves. There are powerful forces pushing new entrants down. It could be the bureaucracy and laws or anti-competitive practices by leading business people or low incentives to individuals who want to create something on their own. It is a combination of these and several other factors.
We need to change our way if thinking and avoid harmful social classifications to make our people more productive. We need to provide incentives (both moral and economic) to make them think, research and find new ideas and technology. We need to encourage and appreciate our people’s ideas to make it fruitful.
References
Bernanke, B.S, Olekalns. N, Frank, R.H. (2005), Principles of Macroeconomics, Australia
Ministry of Planning and National Development (2004), Vulnerability and Poverty Assessment II – Preliminary Findings.
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