In an unequal world, poorer countries need more than entrepreneurial spirit

In a world of increasing inequality – not only within countries but also between countries – the age-old question remains to be solved: why are some countries poor and others rich?

This is particularly relevant for poor countries in 2014. A huge amount of foreign capital has flooded out of the world’s poorer countries because rich people have become worried about risk in these countries.

When international money leaves a poor country, at the push of a button in a trading floor in New York or London, all sorts of dilemmas are thrown up for the poor locals.

This is one of the massive drawbacks of globalisation. Capital flows are amplified and they are driven by greed and fear.

Sipping a coffee in the medina of Marrakesh, the local effect of international outflows of capital is being felt.

Everyone is stocking up. Today, there is a general strike here because the government proposes raising taxes on almost everything to reduce the national debt. It is worried that it won’t be able to finance itself next year.

Moroccan GDP per head is 10pc of ours and its debt is minuscule by our standards, yet traders in New York and London want to be on the safe side before Christmas and this is having a huge impact here.

Welcome to globalisation 2014!

When you find yourself somewhere like this, the economic inequality conundrum appears ever more baffling. Many ideologues argue that the key to wealth is trade, hard work and entrepreneurial spirit. This is the accepted narrative. If only poorer people could be more entrepreneurial, they argue, all would be fine.

But would it?

There are fewer more entrepreneurial places in the world then Marrakesh. Everything is for sale, everything has its price; trade and commerce are ubiquitous in the souk. In fact, so synonymous with trade is this place, that an early Irish internet trading platform was called Marrakesh. Remember that?

The souk draws you in. It seduces you with the sensuality of the strange. It is confusing, disorienting, exotic, enticing and deeply attractive. It is a trading hub for everything.

Straight away your senses are assaulted.

What’s that smell? Is it mint, liquorice, aniseed, cardamom? What’s down this alley – the dark one – past the beautiful girl in the turquoise headscarf with henna tattoos?

No, sir, I don’t want a carpet. Tea would be nice, thanks.

On you go, deeper into the labyrinth. Watch out – mind the undernourished donkey with cart pulling a mountain of brightly coloured scarves – 20 dirhams my friend?

Tinny Arab pop music vies with the call to prayer from the myriad minarets which fortify the ancient medina.

Mind your step there. It’s a bit slippery. The marble has been brushed smooth by centuries of walking, shopping, bargaining, mooching, hiding and slouching. Today, water from the melting ice of the fresh orange juice is making the path treacherous.

The locals are extraordinarily welcoming and, as you negotiate your way around, they are constantly looking out for you in a mixture of French, English and the international language of the face, the hand and the gesture. This is the historic medium of commerce.

It’s a bargain hunter’s paradise.

Even the most frugal are battered down. Maybe it’s the aroma of freshly baked bread and grilled lamb, but curiosity and the sense of a deal will get the better of you. Try some falafel or some hummus, maybe?

Marrakesh spans the ancient with the modern and is like stepping back 500 years while still remaining part of the i-generation. Just across from me a young observant Muslim woman with dark eyes under thick black mascara, scrolled down to show me verses of the Koran on her iPhone 6 while a raunchy Nicki Minaj video played on the blaring TV behind her.

Marrakesh is where the Middle Ages meets the internet, where Africa meets Europe and where Berber, Arab, European, African, Jew and Bedouin live cheek by jowl. These people came here to trade. It was the traditional trading hub where the caravan routes of north and south intersected.

Fruit and salt from the Mediterranean were exchanged for gold and slaves from the Kingdom of Timbuktu.

The place buzzes with the humming indignation of the haggle. Crestfallen sellers gesticulate wildly at playful buyers as both grope their way to a deal.

Yet despite all this activity, despite all the commerce, the place, although rich by African standards, is years behind Europe economically. Given the trade going on, there is a much greater mercantile instinct here than in Western Europe, where so many people work in large bureaucracies and won’t know a deal from a kick in the head.

But there is something flimsy about the commerce here, something fragile. It is buying and selling but it’s not the solid process of making and building. Trading is very different to processing. There’s a significant difference between pocketing margin and truly adding value.

This fragility is something that many emerging countries share and it makes them susceptible to the mood swings of traders. It’s not that they are any worse governed than us. Obviously some are, some aren’t. Some are bureaucratic but then so too is Belgium.

However, fragility, mainly institutional fragility, might be at the root of the inability to translate trading nous into globally competitive companies.

The global free trading system is also designed in a way that helps companies that are already dominant. This doesn’t make it easy for poorer countries.

However, one thing is certain when you look around Marrakesh: there’s no lack of entrepreneurial spirit. They have it in spades.

I’m off now. There’s the imam calling the faithful to prayer. Noisy chap, so he is. Could that have something to do with it? Maybe, but that’s for another day!

Inshallah.