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Simeon Mitropolitski is a Canadian analyst, of Bulgarian origin, and a former syndicated columnist with the Bulgarian News Agency (BTA). He is the author of several hundred articles dealing with hot political and economic topics, both national and international.

He was part of the first group of Bulgarian intellectuals and students that began the opposition movement that finally put an end to the communist regime in this country in 1989, and in 1996-1997 participated in international observation teams during the elections in several Balkan countries - Romania, Albania and Bulgaria.

In 2002 Simeon and his family moved from Bulgaria to Canada where they live now in Montreal, province of Quebec. Simeon is a Master of Political Science from McGill University and a B.A. of Political Science and History.

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The world is increasingly becoming polarized on a small wealthy minority and a huge miserable majority. During the last decades some countries from the middle ground joined the golden billion, some other nations have dropped to the bottom. The rich countries have something in common regardless of their geographic location, ethnic background and historic traditions. They all have followed the American economic model after World War II. Its two pillars are relatively cheap credit and relatively expensive work force. This is the reason for ever-accelerating technological progress. In order to survive, the economy constantly needs fewer and fewer workers because of their relatively high price. Technological progress means more production with fewer workers and with higher profits. These profits generate additional value, pushing up markets, creating more and more positions and calling for newer technological gadgets.

To compete with the advanced countries, the Third World has one main weapon, its cheaper labor force. Any investor should have noticed that putting money into a poor country means first of all saving on workers' expenditures. In the West labor costs amount to two-thirds of the total value of goods and services. In the Third World they drop to one-tenth of all spending. Again, regardless of the geographic location, ethnic background and historic details, more than a hundred national governments around the world try to lower labor costs as much as possible, creating,as they think, more favorable conditions for the foreign capital. Putting the burden upon the shoulders of millions, these national governments try to avoid the need of administrative reforms, the need to fight corruption and also the need to make credit cheaper, which is the only sustainable way of economic progress. In a society where just anyone can access cheap credit, the workforce automatically becomes more expensive.

Even now interest rates in almost every Third World country are double-digit, while in the West they are close to zero. Even in the poor countries, whose currencies are linked to the $US or the Euro, credit is so expensive and access to it so difficult that only few can benefit from the financial system. On the other hand, the Third World governments via the tax systems are killing in germ any idea of middle class, starting income taxation well below the line of biological survival. Let's take for example my own country of origin Bulgaria, which isn't the poorest among the poor. Its example can be applied to many other Third World countries.

In Bulgaria a progressive individual income tax is applied to any monthly income above approximately $70 US (e.g. in Canada the same line is put at approximately $500 US). An average household in Bulgaria should pay a similar amount per month for heating during the winter. The big majority has no means to invest and to start their own business; those who have are doomed by the tax burden. The pool of companies can't create enough jobs. Unemployment is high. People can't adapt fast enough to the new technological inventions, because many of them lack professional experience. This picture can be applied to many countries around the world and it will reflect the true situation.

How does this Third World economic model affect the real estate market? The constant high interest rates created to keep the majority of the population from business credit at the same time keep the population away from housing credit. In Bulgaria just 10% of all housing sales are made using the mortgage loans. Official salaries are kept as low as possible to attract foreign investments at the same time keep the working class away from the cash property market. Thus, properties in Third World countries are cheaper than in the developed nations, not because building materials are cheaper but because the demand is much weaker. Third World governments, taking away the local population from the market, are in fact looking for foreigners to compete for the best properties. For countries with a benign climate this could be a possible alternative for economic survival, for all the others this is just another futile hope.