00:01
Thinking in terms of international trade, this question is asking us, would it be accurate to say that there are no abundant resources in the world's poorest countries and as a result, they have nothing to export? this question is somewhat related to the ho theory of international trade or the heckscher -olin theory.
00:18
I like to simplify it to the ho theory.
00:21
And what this theory states is that a relative factor abundance determines a country's export.
00:29
So it's almost related to comparative advantage in the sense that countries are going to export goods, which they have a relative abundance of its production factors.
00:41
Now, suggesting that some of the poorest countries in the world are poor as a result of not having resources because they're lacking these factors of production is false.
00:52
So we can answer this question by saying that no, it would not be accurate to say that.
00:57
What oftentimes happens in poorer countries is we see that their labor factors are greater than their capital factors and this tends to be different in developed nations it tends to be opposite but so we can say this right here this tends to exist in developing nations where their labor is greater than their capital so their labor abundant we can say however they're not by any means short on natural resources and i like to use africa as an example...