ECONOMIC GLOBALIZATION

POVERTY AND INEQUALITY

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OBJECTIVES:

 Defining Economic globalization poverty and inequality

 The increasing interdependence of world economies
 The effect of global economic integration on inequality and poverty

Economic globalization
 Economic and trade globalization is the result of companies trying to outmanoeuvre their
competitors
 Economic globalization refers to the increasing interdependence of world economies as a
result of the growing scale of cross-border trade of commodities and services, flow of
international capital and wide and rapid spread of technologies

Poverty and Inequality

 One of the most contentious issues of globalization is the effect of global economic integration on
inequality and poverty. ... The first trend is that growth rates in poor economies have accelerated
and are higher than growth rates in rich countries for the first time in modern history. Second, the
number of extremely poor people in the world has declined significantly. Third, global inequality has
declined modestly, reversing a 200 year trend toward higher inequality. Fourth, within-country
inequality in in general is not growing, though it ha risen in several populous countries. Fifth, wage
inequality is rising worldwide.

Poverty
 Economic growth is the main channel through which globalization can affect poverty. What
researchers have found is that, in general, when countries open up to trade, they tend to grow faster
and living standards tend to increase. The usual argument goes that the benefits of this higher
growth trickle down to the poor.

Inequality
 Basic theory predicts that inequality falls when developing countries enter global markets. ... As
global trade increases, the theory says, unskilled workers in poor countries are high in demand;
skilled workers in those same countries are less coveted

CONCLUSION:

Proponents of economic globalization view it as a key to future economic

globalization and in general it is considered positive force for improve quality of
life, accelerating of economic growth, efficient allocation of resources of grate
productivity enhancement.

Whereas anti-globalization camp argues that increases poverty and lead to

worsening in the distribution of income.