John Authers, Financial Times‘ Senior Investment Commentator, writes from Peru, where he attended the annual meetings of the World Bank and the IMF. His column reminds us that exploitation is preferable to economic exclusion even though, in an ideal world, neither would exist.
At $5,962, [Peru’s] GDP per capita remains far behind the average for the region ($15,568). Many in the agrarian Andean hinterland remain mired in poverty, effectively excluded from the economy.
Note that exclusion is different from exploitation. The exploited create riches for someone. But, to borrow a distinction from the Harvard University economist Ricardo Hausmann, the poverty of those excluded benefits nobody. They are simply no part of the Peruvian or world economy, and the fixed costs that would need to be incurred to include them, in terms of physical and social infrastructure, are too high for anyone with money to pay them.
John Authers, “Peru rebirth illustrates the China effect“, Financial Times, 10 October 2015 (metered paywall).