To what extent can growing poverty be blamed on the advance of Essay

To what extent can growing poverty be blamed on the advance of globalization - Essay Example Globalisation is defined by Pugel (2004:5) as the â€Å"process of an increased relationship between national economies through international trade, foreign direct investments by multinational firms, and international financial investments†. Increased inter-nation trade results in the increased need for the redistribution of pricing and goods in a way that will ensure market place equilibrium is arrived at. As a result, nations may undergo periods of unemployment, reduced prices of their nations’ natural resources, as well as poor standards of life. On the other hand, Pugel (2004) argues that some countries undergo periods of inflation, increased employment demand, as well as increased living standards; thus there will be both gains and losses as a result of wealth redistribution. In order to establish comparisons between poor and rich nations, definition and measurement of inequality is vital. Once determined, it is possible to evaluate and measure the effects of globa lisation on the nation’s status. According to Birdsall (2002), inequality is the disparity of people’s living standards and their income in different countries. In addition, the World Bank categorises those in developing nations living under a dollar per day and those in medium economies living under two dollars a day as poor (Eswar, Rajan and Arvind, 2007). In contrast, the trio posits that a person in the more developed economies of the US, Japan, and Europe trying to live on under a thousand dollars is relatively poor as the cost of life is these economies is far greater than this amount. There is a rising increase in the income gap between the rich and the poor with many regions worldwide recording figures of 25% or more people living on less than a dollar a day (Ikubolajeh, 2002). According to Pranab (2007), poor people with less income have limited and or less access to the global wealth. A 2003 research revealed that the richest fifth of the global population ga rnered 85% of the globe’s income whereas the poorest fifth managed only 1.4% of the globe’s income (Eswar, Rajan and Arvind, 2007). Comparing the GDP between poorest and richest nations across the globe over the past century results in a constantly increasing and or widening income gap; an indicator that the gap of income has augmented and has continued with the same trend. Apart from income, the standards of living can also be used to measure a country’s level of poverty. Sri Lanka shares impressive social indicators as those of developed nations, for instance, life expectancy, literacy rates, mortality rates and population growth rate in the country is same as that of developed nations. Despite this, the country has a low income. Poverty of a country can be measured by fourteen major indicators that have been further subdivided into four sections namely infrastructure for development, growth and poverty reduction, human development, and governance and investme nt climate (Pugel, 2004). A number of factors can be used to drive economic growth and development, for instance increased educational standards and economic policies such as openness to international trade. Inequality exists in terms of living conditions and standards of livin