What Makes+Keeps – Countires and Societies Rich

A country is only rich, if it keeps suffecient share of created wealth for long-term growth and invested reserves for non-income years of the peoples’ life.

If all the income generated by people (as part of large cicrulation of money, exchange of hands), then things inflate and thus as a result disposable income is always tight. This creates illusion of wealth as everyone has decent spending power to lead quality of life, but not any extra income for retirement (non-income years) and into country’s growth requirements. Such illusion of circulatory wealth creates short term richness but long term it becomes tougher and tougher.

Many developed countries (US, Japan) fell into this mess, in last 20~30 years when all that was earned was spent on short-term pleasures,
and not on reserves to keep long-term goals also met. Developing countries are also falling into this mess, by over-spending and stretching.

Those who can create a good mix of :

1. “Decent GDP growth” (through Value creation and not illusory wealth creation)
2. Manageable Inflation of Quality of Life, and
3. Decent disposable income (through savings reserve for non-income years at societal level) and decent currency reserve to invest into future strategic initiatives that see for #1.

Will be the ones thriving for much longer than Western Countries. it will be interesting to see how the Asian emreging Countries manage this economic transition over next 30~70 years as they become richer and developed.