Re: What happens when the government is broke
Samoa did not graduate voluntarily.
They were told that this was what was going to happen because Samoa had the necessary infrastructure and economic growth to graduate.
These decisions are made by the people who have the money to lend to poor countries (the UN, aid agencies, donor countries, development banks). If they say you are ready to graduate, then you’re ready to graduate.
Samoa had to ask for an extension because of the natural disasters. Extension was given and then Samoa graduated.
Anyway, it is true. Samoa is now light years ahead of where it was back in the 1980s in terms of economic growth, infrastructure and everything else. The reason why there are people in “poverty” (relative poverty; not absolute poverty) is because the standard of living has gone up and by the standards of 2017, yes these people are most definitely living in poverty. The costs of living have gone up because the standards of living have gone up. There is far too many people moving into the urban area around Apia.
Urbanisation is a sign of economic development (although I hate this kind of symptom of economic development because too many people are moving to Apia and overwhelming the resources and infrastructure while village and regional economies remain neglected).
However, by the standards of 1981, these people would not be poor.