problem solving

Discussion in 'Economics' started by wentzel, Aug 10, 2011.

  1. wentzel


    Me and my friends had a discussion the other day about something that i couldnt really understand. let me try to explain:

    I live in the Phillipines where corruption is widely spread. We were talking about the rice bags that the red cross are sending here to help the poor population, and how corrupt people take those bags and sell them instead of distrubut them for free to the poor which it was intended for. My friends told me that it was not so bad because the money that the rice was sold for would later on be spent to buy other things in the philippine society. what a i mean is that the man who took 1 bag of rice that was supposed to be free and sold it for 10 usd, later on spent those 10usd on other things for himself/family within the country and therefor created business.

    I couldnt seem to understand what my friends meant, offcurse the poor will be the one to suffer. What would be other effects that this would have?
    Anybody who can shed some light on this?