Poverty is real in the world due to inadequate basic wants among many families. In globalization times, most nations get exploited living citizens in either extreme poverty or riches. However, excellent capitalist grows wider and wider and unites global control elite (Andreeska 7). Globalization has contributed world poverty through processes such as neo liberalism, Anglo-American model, Washington consensus and increased inequality. Neoliberal consensus has basis on salary reduction to develop economically and ensure stability in countries. Liberalization in the labor market is done through reduction of labor prices, affecting bans on salary adjustments, increasing costs of living, productivity, and eradication of minimum income laws. Poor countries have increased debts since they depend on other countries economically, politically and technologically. Thus, globalization increases the gap between rich and poor countries (Andreeska 8).
Ways of eradicating poverty
World Bank statistics define poverty as income levels below 1.25 USD per day. Poverty is eradicated through reducing rates of infant mortality rates, reaching levels of gender parity in primary school enrollments, increasing average incomes (Andreeska 9). In addition increasing provision of energy, finance, and economic foods internationally.
Political support of leaders to their citizens through commitments to their agendas is another way of reducing poverty and bridging the gap between the poor and the rich. Moreover, acknowledgment of human rights by officials and citizens gives the aspiration of freedom of want and from fear. Citizens become aware of their political rights, civil rights. Equality rights among men and women, children rights to water, food, health care, education, social security and work(Andreeska 11).
Monitoring and accountability
Monitoring and accountability of commitments eradicates poverty. Internal and domestic accountability is done through conducting universal periodic review of council of human rights and strengthening such bodies. In addition, enabling participation in the civil society to identify measures that lead to progress and evaluate implementation ensures accountability. Third, the performance of developing countries should be monitored by human rights mechanisms (Andreeska 12). Poverty is eradicated by maximizing personality strengths, production of personal resources and instilling effective development strategies. Participation in globalization with aims of improving the lives of citizens removes inequality, poverty, and obsolescence.
Global problems are solved through transforming international monetary and financial architecture. Laws and regulations eradicate poverty through having roots of equality, sustainability, and regularity. Example the United Nations forum solves financial crisis through ensuring that all countries are presented as democratic in processes of effective transformation. European Union recognizes shortages in economic systems. It fights poverty through proper judgment and sustainable development. It offers outcomes of changes in global financial systems.
European Union provides accountability and transparency to the public in workings of financial institutions internationally. It stops overpayments of funds in real estates, and other high-risk products to eliminate macroeconomic negative effects. It closes secret jurisdiction through shadow banking and offering offshore financial centers to eliminate evasion of border taxes and capital loss. As a result tax evasions are minimized which raises excessive funds, for sustainable development (Andreeska 13)? Poverty is eradicated among citizens through respecting, protecting, preventing, and fulfilling requirements of human rights and abilities.
Elimination of poverty leads to sustainable economic growth and general improvements in living standards. Key leaders to such improvements include interplay in sectors with diminishing returns in similar labor market. It is characterized by economic activities such as increased returns, change in technology, innovation, and combination of energies that lead to increase of productivity (White field 240).
Economic development stems from equal distribution of gains from productivity resulting from new knowledge and new technology. It is most effective in industries with high barriers to entry, high rewards, and risks. Increased productivity increases wages internationally. Mobilization of scarce capital and investing it socially in industrial enterprises and adding value to existing products as well as innovating them increases selling price of such items and adds income in the country which reduces poverty. Moreover, more productions in industries increases wages per worker and improve their living standards. Value creation is done through borrowed technology, construction of backward and forward linkages in domestic economy and upgrading of process technology through apprenticeship (Whitefield 242).
Living standards are raised through textile mechanization, steam engines, railways, chemical industry, electric machinery, synthetic materials, automobiles, biotechnology, software, and data. Productivity raises living standards through raising wages and lowering prices. Wages increase due to division of technological development among investors, entrepreneurs, workers, states and labor markets. Political support for higher wages demand, increases productivity that creates more jobs and incentives for mechanization. As a result, a vicious cycle is increased since mechanization increases products and, raises wages (Whitefield 249).
Poverty is reduced by monopoly of a vital raw material, manufacturing capacity or overseas trade. Creation of monopolies led to new inventions, and new industries. Countries avoid poverty and stay rich by being the first ones to embrace technology in emerging productive sectors. As a result, they capture the highest rents since they are the first ones in the market. Secondly through exportation of products in countries with great technological development and import their products in countries where technological development is low. Conducting research on products to gain new knowledge and establish high-value economic activities. Research is the source of innovation, which sustain welfare and drive it forward.
Developing countries may be at a great advantage if they practice competitive exclusion, which prevents other from entering their industry. The gap between the rich and the poor is reduced through exploiting prior technologies, wealth accumulations, skills, learning since there are reduced risks in development of new products and technologies. Borrowing existing technologies, and boosting efficiencies, lowers production costs and improves quality of products. Assimilation in developing countries characterized by benchmarking activities, adaptation of economic structures and institutions with the help of the government reduces poverty (Whitefield 250).
Ludlow asserts that businesses can reduce poverty through growing economies, creating jobs, collection of tax receipts required for redistributive government policies and exchange of people’s labor with wages. Businesses are operated through initiatives such as supply chains, and technological innovations. Businesses transfer profits to charities, reducing customer prices due to production of more goods, and employing more workers.
Businesses offer trainings and support to their workers, which adds more knowledge on self-improvement. Reduction of housing costs leaves money to buy more food and avoids long queues in food banks (51). Poverty elimination in businesses is done through offering strict training allowances on various courses learnt. In addition eliminating uncertainties in labor markets such as delaying payments, reducing gender pay gap, having employers shoulder the upcoming risks, and excluding employees from taking risks eliminates poverty among employees. Small business in particular should sign up to government’s prompt payment code to avoid late payments, which can lead to collapse of businesses. Taking insurances against fires and health avoids over expenses as they handle costs of fire damages and ill health.
Firms help reduce poverty by employing workers on permanent basis rather than on contracts or casuals. Workers in poor countries form trade unions, which have representatives responsible for bargaining for their rights, increase of wages and forwarding their grievances (Borjas 52-53).
Borjas, George, “does welfare reduce poverty?” Research in economics, 70 .1 (2016): 143-157. Print.
Andreeska, Irena. “The effect of globalization to the world poverty and economic inequality.” Globalization (2001): 1-12. Print.
Ludlow, Adam “How can business reduce poverty. The WEBB trust essay (2015):1-3.Print.
Whitefield, Lindsay. “How countries become rich and reduce poverty: a review of heterodox explanations of economic development.” Development policy review 30.3 (2012) 239-260.Print.