The greatest economic mystery of the last 50 years is "why is everything so cheap in developing countries?". It's surprising that more people aren't fascinated by this mystery.
Why is it so cheap for workers at this plant to obtain a vocational education and support themselves? Why is it so cheap to operate the plant? What is the ultimate cost driver in developed countries that makes everything so much more expensive?
What's odd is that some developing countries, like Angola, are absurdly expensive.
It's not been a mystery at all for about 200 years, that might be why.
Adam Smith, The Wealth of Nations, 1776:
"If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry employed in a way in which we have some advantage. The general industry of the country, being always in proportion to the capital which employs it, will not thereby be diminished ... but only left to find out the way in which it can be employed with the greatest advantage."
The ultimate cost driver in developed countries is low salaries and low to zero costs of real estate, which are of course interlinked.
There's nothing especially odd about Angola. It's cheap to live in... if you're happy with an Angolan standard of living and the unusually high probability of being subject to violent crime in most parts. A risk which means that the minority of comfortable and safe places to live in and shops which import luxuries local people can't afford (like many basic foodstuffs...) can charge what they like to expats that don't have a lot of choice and do have cost-of-living adjustments and danger money added to their already high-by-Western-standards oil-worker salaries.
The role of absurdly high real estate costs is something that is very infrequently discussed, but very important. As all businesses rely on land, labour, energy and resources, a big increase in any of those three has flow on effects.
Developed counties like the US were once low-tax, low-regulation outsourcing destinations with comparative advantages that outweighed even higher shipping costs.
Why is it so cheap for workers at this plant to obtain a vocational education and support themselves? Why is it so cheap to operate the plant? What is the ultimate cost driver in developed countries that makes everything so much more expensive?
What's odd is that some developing countries, like Angola, are absurdly expensive.