Globalization Decrease Poverty in the World Essay

Globalization is a set of processes leading to economic integration. All countries open their doors to each other. The wind of globalization has carried a lot of changes . The life nowadays depends on trade and economic relationships. Before globalization, countries were separated from each other. As a result , every one was looking for its interset in a selfesh way which is contrary to what is happening now. However, people nowadays are thinking of ways that help them to communicat with one other. There are a lot of postive things which have resulted from globalization and have improved people’s lives such as decreasing poverty in the world. In fact, an average of 65% to 70% of citizens all over the world feel thous their lives and that of their families have improved as a result of globalization[1]. Global economy has improved in the last 20 years ,which caused poverty reduction in world. Free trade and outsourcing are the most prominent phenomena which resulted from globalization and played an important role in reducing poverty. Free trade played an important part in creating a strong economy in the world. There is a vast difference between the country that open itself to world and the country that bonded it self. China is a good example of those powerful industrial countries which have benefited from globalization. â€Å"China’s increasing openness since 1978 has handsomely benefited its economy which is now nine times larger† [2]. Free trade creates a competition between countries for better goods. The poor people were able to benefit from this competition. The increasing variety and quality of products gives the poor people a lot of choices to live a better life â€Å"Diversity also becomes important for consumers, with wider choice and access to better and cheaper products and services in globalizing markets†[3]. It is a well-known fact that before globalization all countries were enclosed within themselves but with free trade life became more chipper and more people were able to live a better life. Miss Zeana who lives in Tanzania said that, her parents were living a taught life because the government owned everything even cars. People did not have the right to own anything and trade was trapped so there were a lot of people who suffered a hard life. However after a couple of years of globalization, there is a lot of enhancement in the quality of life in the country. Free trade allow people to live a better life. Jobs opportunities have been provided by new factories and cheap products are now available to help poor people to live in better life. Free trade helps the counties economies to grow faster in a way that helps moreâ€Å"A new WTO † World Trade Organization- Secretariat study published today (19 June) finds that trade liberalization helps poor countries to catch up with rich ones and that this faster economic growth helps to alleviate poverty†[4]. Now, developing counties are playing a big role in world’s trade which is a sign of economic progress that has been achieved in their counties â€Å"Today the real dynamism in trade is to be found in the developing world, where Brazil, China, India, Malaysia, Mexico and Thailand all posted double digit growth in exports†. 5] The outsourcing is one of the most widespread phenomena in the world which results from globalization â€Å"Many economists argue that outsourcing is just another form of free trade, which increases wealth in the economy†[6]. The big companies which are head quartered in developed countries set up their factories in dev eloping countries so that has helped to increase jobs opportunities. For instance, from 1982 to 1999 an average of 34 million new jobs were created per year by outsourcing, compared with 18 million in 1965-1982[7]. Another positive thing about outsourcing is that companies are able now to produce more products of the same quality but at low cost â€Å"Economists say that employing workers at lower cost allows U. S. companies to be more efficient and productive†[8]. That is how outsourcing has affected positively for both the developed as well as the developing countries. On other hand, some may think that rich are countries becoming richer at the expense of the poor and that because of globalization[9]. Developed countries have invested in poor countries for their interest. â€Å"Globalization creates great winners but also great losers at the same time†[10]. The winner in this case is the developed country. Globalization has supported rich people in a way that helped them to become richer . As a result, the gap between the rich and the poor became wider, which caused the rise of poverty â€Å"The process of integration might contribute to increased inequality and weaken impact for poverty reduction†[11]. Globalization supports inequality in each nation â€Å"Globalization has dramatically increased inequality between and within nations†[12] . Underdeveloped markets and ineffective government programs increases economic inequality in developing countries which slows progress n reducing poverty [13]. The government direct its attention to cities which is in the forefront of their economies. Their main goal is to find a way that help them to be more successful economically. There are less young people in China’s poor villages because they migrate to urban areas for a better life[14]. Low income leads to poor children mi ssing out on the education and skills that would maximize their own economic[15]. For instance, Mr. Dwanzhi She is a Chinese man, who moved from his village â€Å"Beijing† to a city â€Å"Wuhan† to complete his higher studies. Later he worked in a big successful company as a ‘Foreign consultant†. Since that time his village has not changed and that is because boors are responsible of the infrastructure there[16]. As William Easterly mentions in his article â€Å" The poor performance on economic growth is accompanied by rising income inequality and high open unemployment rates†[17]. Globalization has merged economyies of several countries to create a global market. â€Å"Developing countries worry that opening up to trade with the rest of the world may make the poor poorer†[18]. All companies try to penetrate foreign market and to establish their goods. Most big companies concentrate on the quality of the goods and ignore the rights of workers who are mostly from poor familiesâ€Å"Many people believe globalization is a disaster for the workers[19]†. Instead of having a better life, their life became worse. â€Å"Good products as a Olympic sportswear as forcing workers to work fast in a short period so that they can generate more production and more profit in bad conditions and under difficult situations for poverty-level payment† [20]. There are three million illegal workers who work in China and they suffer from low income[21]. Governments usually do not protect workers’ rights. It is true that not all countries benefit from globalization to the same extent but we can not deny that it has played an important part in enhancing the standard of life â€Å"Between 1970 and 1980 the average of income of poor people which was US$1 per day was increased 17% to 13% but in 1998 this percentage decreased to 6. 7%†[22]. There are more people who lived above the poverty line from 157 to 892 million people 1870-2000[23]. The ratio of inequality in the world has decrease. Globalization has decrease inequality by opening the gates between the developed and developing countries. There is a connection between openness and inequality â€Å"The more open a rural area is, the faster the reduction in poverty†[24]. Open rural areas have a better chance of enhancing the standard of life and of decreasing poverty. Having a better education and good health standard in these areas are signs of poverty reduction which leads to less inequality. â€Å"Promoting education, particularly for the poor people, improving health standard and enhances the productively growth that is the main engine of poverty reduction†[25]. For example, in 1990 the adult literacy rate ( of people aged 15 and over) in India was 49. % while 37. 3% was the percentage of population below the poverty in rural areas. In 2002 there was a tremendous increasing in adult literacy rate ( of people aged 15 and over) to 58. 8% and the percentage of population below the poverty line in rural area dropped to 30. 2[26]. Some people think free trade is a cause of increasing poverty in the world. H owever, fewer trade barriers and cheap transportation create economic integration and global markets. All that help economy to grow in each country specially the developing counties. Free trade is an important element that enhances the economic situation in a way that helps poor people to come out poverty. Foreign direct investment creates a lot of job opportunities in developing countries. Many people move to urban areas to work in a better condition with better salaries. For example, Mr. Dwanzhi She who lives in â€Å"Wuhan†, an urban city, said that he gets 60 thousand dollars in a year and that is a very fancy life in China. His life is completely different from his parents life who used to live as farmer in a rural area â€Å"Beijing† and suffered from tough life[27] . Many people hate foreign investment in a developing country because they think foreign investment abuses poor people and they does not give them their rights. The answer is that, free trade or the global market has created a lot of enhancement and profit for both developed and developing counties. The fact is that, some people using it in a bad way and misjudge poor people so they get the positives. As Mr. Hang Dong Fand who is a member in a labor activity says that, â€Å"Market economy is not bad but some dictator people use it in a evil way†[28]. There are many organizations such as World Trade Organization (WTO) which worked for protecting poor people from those people who abuse them â€Å"The World Trade Organization, (WTO), is the primary international body to help promote free trade, by drawing up the rules of international trade[29]† For example, Miss Wu Qin is a Chinese woman who works as a volunteer in a foreign fund, Advise Clinics- says that many companies are abusing poor people’s rights so her role is to provide legal help by giving them the clear idea about their individual rights[30]. The access of foreign product to developing courtiers leads some people to think that globalization for increases poverty. On the contrary, this system has helped a lot of poor people. It is to be noted that socialist system there were barriers to trade in every county to set up in order to protect their industries. Import substitution industrialization was a way that each country tried to create its own industry. That socialist system divided the country into many classes, where the lowest class was the majority of the country. Inequality was a common thing at that time. The rich people who lived in urban areas were able to live a fancy life. The 1980 was the end of the socialist system and the beginning of globalization. Globalization has changed life of poor people for the better. There grew competition between companies for better products. In the same way they were trying to prepare them selves for more production at low pries. As a result, many people bought good products at low cost â€Å"Consumers get cheaper products (nearer world prices), at least in the medium-to long-term. †. [31] In conclusion, poverty has decreased rapidly with the birth of globalization.