If you are wondering why globalism is good, now you have a clue. Of course there is still a problem of income distribution, but now they have some income to distribute.

But what of the "bottom billion" those people remaining in the low income countries. Well now they are less than a billion. But more to the point, there are several reasons to expect many other low income countries to rise to lower middle income status in coming decades.

First, as China, India, Pakistan, Vietnam, and other formerly low income countries move up to more sophisticated industrial goods, low skill labor intensive industries will have to search for new sources of cheap labor. This means those industries will go to Bangladesh, which has long since become heavily involved in light industry. But Bangladesh alone will not be enough, many other low income countries are likely to move into light industry. Those low skill labor intensive export industries were key to the rapid growth of the Japan, Hong Kong, Singapore, Taiwan, South Korea, China, Pakistan and Vietnam. They will probably foster rapid growth in the remaining low income countries as well.

Up to this point many of those countries could not compete with China and its lethal combination of low wages and relatively high efficiency, but as China's wages rise with its per capita GNI they will be able to take those industries with lower wages. Already low level industries are fleeing the coastal areas of China. While China as a whole is officially in the lower middle income range, some coastal areas are much farther advanced. They are in the upper middle income range and some areas maybe high income. Some of those industries will simply move into China's interior, but because of China's rapid growth the wages in the interior may soon be too high to compete in the lower level labor intensive industries.

The remaining low income countries will enjoy an advantage that China and other countries that grew through light industry did not have. While there used to be four or more pairs of hands in the low income countries anxious to sew t-shirts for every back in the high income countries that needed to wear a t-shirt, the ratio is now about four backs in the high income nations for every three pairs of hands in the low income nations. With a much smaller supply relative to the demand, wages will tend to rise for the workers and export earnings will rise for the low income countries. The increased wages will be good from a humanitarian point of view, but in addition to that the increased export earnings will mean that more capital equipment can be imported., which will further increase economic growth.

Looking further into the future the percentage of population living in high income countries will rise which will increase the economic growth of the low income economies even more. Recently, there were about a billion people living in high income countries, there might well be three billion within fifteen years.

Some low income countries like North Korea have governments that are so bad that they will keep the new industry out. Other low income countries will be too unstable. But the very fact that the workers in these countries will be shut out of world markets and therefore not be competing will tend to encourage the even more rapid growth of those economies where the governments do have their act half way together. The government of North Korea is bad for its people, for South Korea, Japan, and the United States, but Bangladesh may benefit because North Korea is not setting up factories that make t-shirts, toys, toasters, and other light industrial goods.

But as the more reasonable, open, and stable governments enjoy thriving rapidly growing economies there will be increasing pressure on the remaining governments to open up or become stable. In the past even those countries that had good policies to facilitate light industry often did not have impressive growth. This allowed unreasonable men to take over those countries. More and more good behavior will be quickly rewarded and therefore is likely to be more common.

In addition to light industry, the Internet is proving another route out of low income status. Even India is having difficulty finding all the highly talented, intelligent people that the software and other high tech industries want. As a portion of each country's population is likely to have the abilities needed to compete in these high tech fields it seem likely that most poor countries can set up an Internet center where talented, intelligent people can work and bring in foreign exchange. Combined with natural resource exports, and light industry this income may well give them the foreign exchange they need to buy the capital goods that will raise their economies to lower middle income status.

Finally, the rapid growth of the Third World is driving up natural resource prices which will help some low income countries to move out of the low income category.

In conclusion I expect the percentage of the world's population living in low income countries to continue its rapid descent, driven by these three factors, light industry searching for low wages, Internet outsourcing searching for cheap talent, and rising natural resource prices.

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