Why Are Colder Countries Richer?

 


When you think of prosperity and a good life, what’s the first thing that comes to your mind?

Is it a home in a desert? Or a home in the hills?

I am sure for most, it’s the latter.

Why is this the case? 

Why has prosperity long been associated with countries with a favorable climate?

Usually countries like USA, UK, Germany and Norway come to our minds when we think of rich and developed countries. Whereas, African and Asian countries that are closer to the equator are relatively underdeveloped and poorer.

This is vindicated by the World Happiness Index, which finds Finland right at the top while countries like Sudan and Afghanistan are right at the bottom.

Statistics:

A study showed that for every 1 degree fall in average temperature, the GDP per capita rises by $762

Thus, as we advance towards the north, the standard as well as the cost of living goes up. Whereas if you were to settle down south, you’d find places relatively inexpensive with a lower standard of living.

Example: Switzerland is the most expensive nation to live in, followed by Norway, Iceland, Japan and Denmark. All these countries are located in the northern hemisphere, much above the equator.

Theory 1:

Thousands of years ago, the hotter regions were the most prosperous and lucrative places to live in due to appropriate weather conditions, fertile soil and plenty of water for agriculture.

In contrast, people up north had it way harder, they faced severe conditions. They had to come up with innovative and more efficient ways to farm and sustain themselves.

These countries fought tooth and nail to bring prosperity to themselves and have over the years become self-sustaining successful nations of the world.

After the industrial revolution, farming and agriculture were no longer deciding factors of a nation’s prosperity, it was mechanization of process.

The warmer countries fell way behind the colder countries because they lacked innovation and were yet dependent on their conducive climatic conditions. They were technologically and innovatively handicapped whereas the colder regions had learned to beat their fate the harder way and had emerged victorious

The colder regions thus have been way ahead of their warmer counterparts ever since. Sadly, the complacent warmer countries haven’t been able to cover this gap even years after the industrial revolution.

Theory 2:

Another reason, could have been that during the formative years of society, the main and only source of food was hunting and gathering.

People in colder places would need much higher level of planning and cooperation to prepare for the winters or they would perish in the cold.

In tropical climates, there is a lesser need to store food year-round, because the temperatures are more or less the same throughout the year. Thus, no planning went into stockpiling, storing, building or judicial use of limited resources.

The farsightedness of the people of the colder regions has now compounded over the years and is firmly ingrained in their culture.

This has converted into the practice of valuing capital goods so that society now has it easier throughout it’s existence.

Exceptions:

An exception to the above statistics, are the countries of Singapore and UAE.

In the last few years, India has witnessed a larger brain drain to the countries of Dubai and Singapore, owing to better opportunities and development in these regions.

Despite being extremely close to the equator, these countries have grown to be economically better off than the rest of their neighbors, chiefly because they serve as an important trade route connecting the west with the east.

 

Written By - Tushna Choksey

 

 

 

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