global econmic growth and poverty reduction

MBA 674 TERM PAPER Kaosarat Animashaun (U01173077)

WORLD POLITICS: GLOBAL ECONOMIC GROWTH WITH POVERTY REDUCTION

Globalization is the interaction and integration of people, nations – companies and governments within and outside the continent through trading of goods and services, investments and cultural education, modern-day globalization has improved further due to advancements in technology – production, transportation and information. Humans have interacted over long distances for thousands of years, for example the overland Silk Road that connected Asia, Africa, and Europe is a good example of the transformative power of trans-local exchange that existed in the "Old World". Philosophy, religion, language, the arts, and other aspects of culture spread and mixed as nations exchanged products and ideas. In both the 15th and 16th centuries, Europeans made important discoveries in their exploration of the oceans, including the start of transatlantic travel to the " New World" of the Americas. Global movement of people, goods, and ideas expanded significantly in the following centuries. Early on in the 19th century, the development of new forms of transportation (such as the steamship and railroads) and telecommunications that "compressed" time and space allowed for increasingly rapid rates of global interchange In the 20th century, road vehicles, intermodal transport, and airlines made transportation even faster.

After the Second World War the Bretton Woods Conference held in 1944 set up the General Agreement on Tariffs and Trade (GATT) now World Trade Organization (WTO) to lay down the framework for international monetary policy, commerce and finance, which founded several international institutions intended to facilitate economic growth, lower trade barriers and cost through advancements in technology resulting in the invention of shipping containers in 1956 that helped advance the globalization of commerce as well as the 1970’s aviation industry technological advancements and open skies policies that created low cost carriers, while most recently the advent of electronic communications in the 1990s, the growth of low-cost technological communication networks most notably in mobile phones and the Internet has cut the cost of communicating between different nations and now more work can be done using a computer without regard to location and has connected billions of people in new ways across the world as at June 2012, more than 2.4 billion people—over a third of the world's human population were connected globally. Generally information technology has given all individual economic actors—consumers, investors, businesses—valuable new tools for identifying and pursuing economic opportunities, including faster and more informed analyses of economic trends around the world, easy transfers of assets, and collaboration with partners over long distance on accounting, software development, and engineering design, etc.

Scholars show how the world has grown economically to reduce poverty level through the different phases of globalisation adopted from the archaic globalization spanning from the earliest civilizations until roughly the 1600s, where communities and states traded in grains, spread ideas and social norms at both local and regional levels especially when Greece badly needed to import wheat to feed its citizens and had to engage in maritime trade. Then to the early modern (proto-globalization) phase between 1600 and 1800 were there existed an increasing level of trade links and cultural exchange, and finally the 19th century, modern globalization developed as a direct result of the industrial revolution and its associated economies of scale were standardized mass production of household items was able to meet and sustain demand of a rapidly growing population growth for commodities which negated the Malthusians theory that population growth would exceed food supply and the high levels of poverty that was expected to follow suit. Also, the invention of steamships and railroads significantly reduced cost on international and inland transport, which enabled more imperialist nations engage in trade to ship commodities gotten from Africa and Asia to their nations and trade partners.

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Currently, modern economic globalization is increasing economic interdependence of national economies across the world through a rapid increase in cross-border movement of goods, service, technology and capital to increase economic integration between nations to create a global marketplace or a single world market, It practically transforms economies especially due to technological change and liberalization which has promoted transnational integration in production, trade and finance globally through international trade, foreign direct investments and international finance. Also it creates an interconnected global political order, political power and political activity that extend across the boundaries of nation-states on emerging global issues requiring states to coordinate policy-making at levels above the nation-state. While on the social and cultural level, it alters people’s lives across the globe by influencing their culture using modern communication technologies to exchange information on music, books, ideas, culture norms and values, thus creating a global culture.

Economic globalisation comprises the globalization of production, markets, competition, technology, and corporations and industries which can be measured based on quantitative variables such as increased trade, foreign direct investment (FDI), portfolio investment, and income as well as qualitative variables related to political, social, cultural infusion, and global emerging issues changes around the world like poverty, environmental pollution and how these variables affect economic growth and economic development for the nations engaged in the global process.Economic globalisation has positive and negative impact on nation’s business environment, economic productivity, growth and development as well as on cultural and political systems. If the effects are 100 percent positive in the long run, it will lead to a global increase in the standard of living and eradicate world poverty by 100 percent.Globalisation impact depends on nation’s strengths and ability to adapt to changing business environment SWOTs and effectively control the nature and speed of global integration using its powerful national ideologies that have enabled good governance to influence international business rules. These impacts are as follows:

Pros of Globalisation: These shows how nations, if strong players can gain from globalisation and grow economically and get out of poverty as a result of the following:

1. Free trade allows for greater high quality choices of goods and services at lower prices to citizens of the world due to competition between local and foreign firm to maintain a large market share.

2. Free mobility of labour around the world to find better job opportunities to improve their standard living.

3. Comparative cost advantage gives nations endowed with resources and efficient in low cost resource utilisation at cheaper rate worldwide to the opportunity to grow their economy based on their strengths and forfeit their weaknesses for others efficient to provide.

4. Provides greater opportunities for firms in less industrialized countries to tap into more and larger markets around the world as well as more access to capital flows, technology, human capital, cheaper imports and larger export markets.

5. National issues become world issues and better decision are reached that benefit the whole i.e. United we stand, divided we fall. 2008 world financial crisis, nuclear proliferation, climate change, poverty etc. Thus various organisations are set up to mitigate these issues to ensure all economies function properly.

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According to libertarians, globalization will help the world to deal with crises like unemployment and poverty. It will help us to raise the global economy only when the involved power blocks have mutual trust and respect for each other's opinion.

6. Mobility of people and the advanced communication technology has helped the sharing and merging of culture and ideas resulting in a nearly homogenous global culture as people come across things they like and over time adopt it.

Cons of Globalisation: These shows how nations, if not one of the strong players can lose from globalisation and be drawn into extreme levels of poverty as a result of the following:

1. National sovereignty loses ground to global transnational sovereignty which is controlled by the superpowers i.e. United Nations permanent five and some measures adopted may be too harsh and worsen economy of weaker nations.

2. Free trade compels nations to remove protections, compete based on a certain standard and these standards favour the developed than the developing nations e.g. protectionist policies in industrialized countries prevent many producers in the Third World from accessing export markets.

3. Subsidized local firm might not be able to compete favourably with foreign direct investment firms since liberalisation request subsidy reduction and removal. This reduces GDP growth rate from industries were these local firms exit from and result in a decreasing output multiplier effect for other related and supporting firms that serviced exiting firms.

4. Capital flows increases the risks of global financial crisis spreading within nation-partners in international business.

5. Labour mobility drain develops because people are moving to places their services are highly valued and this results in a drain in workforce in nations experiencing the outward GDP from labour movement as well as transfer and growth of vices like drug cartel and terrorist activities globally from easy migration of people and resulting unemployment in places saturated by high inflows of labour force and those that lack the necessary educational skills required.

6. Widening inequality gap despite the world has grown richer since; world politics has led to increased exclusion and inequality in wealth between and within developed and developing nations due to powerful people or wealthier nations influencing decisions to favour their vested interest at the expense weaker ones.

7. Allows large MNE’s evade home country taxes, since host nations allows them to exclude certain activities from tax reports, thus not reflecting the real profit earn, and this results in home country sourcing more

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revenue from within its economy through higher taxes on citizens and domestic firms, therefore increasing the cost of living and resultant rise in poverty levels.

8. Loss of nation’s socio- cultural values by global cultural hegemony as well as environmental pollution from MNC’s operations in host economy especially when attracting the race to the bottom, host nations dangerously lower environment standard. Also, the global culture adopted is mostly western than any other nations, despite some nations that do not adopt western values, like the Asian nations “Tigers of Asia” Singapore, Korea, Malaysia, Taiwan, china and Japan, and have achieved enormous economic success.

These various pros and cons led to development of world politics, World Politics started in the nineteenth century, when several groups of internationalist like Marxist, human rights, peace, feminist, oppressed advocates and environmentalist extended political community beyond nation-states to include much, if not all of humanity. But today, it has grown to cover greater aspects like human rights norms, human development ideology, and how nations should relate with one another (internationalism) to ensure global welfare more than their national welfare as this would benefit all rather than a few in the long run.

World Politics is the globalisation of social relations to make national issue become world issues where nations, corporations, NGO’s and international agencies set standards for international business and proffer solutions collectively to resolve emerging global issue. Globalisation has brought World Politics greater importance now than it had in the past because of the high interconnectedness of nations that allows economic, cultural, social, political situation affecting one nation to spill over to others. This union of nations to discuss and find viable solutions to the world emerging issues gave birth to the World Politics we have today that aims at protecting the environment, merging cultures, viewing political systems, and promoting economic development and prosperity, to improve human physical well-being around the world by setting policies and organisations in the following areas:

1. Peace and Political Stability2. Proper Health Improvements3. Promote Literacy, Cultural Education and Human Rights4. Productivity, Prosperity and Equality5. Poverty Eradication6. Planet Pollution and Global Warming7. Protect Wild Life and Vegetation8. Propose Measures to Counter Terrorism, War, Nefarious Activities(Crime and Drugs) and Refugee Crisis

Many non-governmental organizations acting as supranational institutions aimed at reducing and possibly eradicating poverty and other world emerging issues to influence public policy across national boundaries towards humanitarian and economic development were set up by nations, such as the World Bank, World Trade Organization, World Health Organization, World Food Program, United Nations (Millennium Challenge Corporation), European Union, the various Group of nations termed G3, G5, G8 and G20. Also, Philanthropic organizations with global missions are also coming to the forefront of humanitarian efforts; charities such as the Bill and Melinda Gates Foundation, Accion International, the Acumen Fund (now Acumen) and the Echoing Green have combined the business models with philanthropy, giving rise to business organizations such as the Global Philanthropy

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Group and new associations of philanthropists such as the Global Philanthropy Forum. The Hudson Institute estimates total private philanthropic flows to developing countries at US$59 billion in 2011.

Global Economic Growth is the increase in GDP per capita income over time as productivity level rises globally, GDP per capita is gross domestic product divided by midyear population. GDP is the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products. It is calculated without making deductions for depreciation of fabricated assets or for depletion and degradation of natural resources. Data are in current U.S. dollars and calculated annually using percentages to show the rate of growth from one period to another.

While Poverty is when people lack or have inadequate basic needs like food, clothing, shelter, health, education and infrastructural development. Poverty headcount ratio at $1.90 a day is the percentage of the population living on less than $1.90 a day at 2011 international prices. Poverty threatens global political and economic growth because poverty anywhere in the world is a threat to prosperity everywhere, since nations are more integrated than ever before, and most nations now produce only those goods and service that they have a comparative advantage above others in terms of cost and efficiency and purchase from others that which they do not have a comparative advantage over others. In the pursuit to eradicate poverty, which is one of the worlds emerging issues, has resulted in nations from different continents coming together to decide how best to improve the lives of their citizenry. Data is annually calculated to show the rate of growth from one period to another.

It is important to note that three types of poverty exist, Absolute (Extreme) poverty, Global poverty and Relative

poverty. Absolute poverty (or extreme poverty) measures fixed standard of living that is consistent over time and

between countries. Global poverty measures the number of people who are destitute by a common global standard.

Relative Poverty measures simultaneously living standards in a particular society as it varies both over time and

between nations due to changing standards of living, it is therefore related to the inequality in living standards of a

particular nation at a particular point in time. The World Bank is the most important institution measuring the extent

of global poverty, the data is published via PovcalNet in World Bank Development Indicators. This global poverty line

was introduced in the World Development Report 1990 as the dollar-a-day poverty line. Since then it has been based

on the national poverty lines of a number of poor countries and was revised according to the national poverty lines

by taking into account price changes over time (inflation). The absolute (extreme) poverty line was prominently used

in the Millennium Development Goals (MDGs), the first of which was to “halve, between 1990 and 2015, the

proportion of people whose income is less than $1.90 a day.”

In the current method the global poverty line is linked to the national poverty lines of poor countries. As it is called

an absolute standard, this poverty line should not move upwards as poor countries grow richer or otherwise it

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http://ourworldindata.org/data/growth-and-distribution-of-prosperity/income-inequality/



becomes a relative poverty measure. National poverty lines are in fact often informed by the self-assessment of

citizens of these countries. The poverty data is primarily based on household survey data. For the global poverty

estimates published in October 2015, the World Bank used income and consumption distribution data “from more

than one thousand surveys covering 131 developing countries. The estimates are based on survey interviews of

more than 2 million households, representative of 95 percent of the population in the developing world”.

Certain demographic changes in the developing world after active economic liberalization and international

integration resulted in rising welfare and hence, reduced inequality. According to Martin Wolf, in the developing

world as a whole, life expectancy rose by four months each year after 1970 and infant mortality rate declined from

107 per thousand in 1970 to 58 in 2000 due to improvements in standards of living and health conditions. Also, adult

literacy in developing countries rose from 53% in 1970 to 74% in 1998 and much lower illiteracy rate among the

young guarantees that rates will continue to fall as time passes. Furthermore, the reduction in fertility rates in the

developing world as a whole from 4.1 births per woman in 1980 to 2.8 in 2000 indicates improved education level of

women on fertility, and control of fewer children with more parental attention and investment. Consequentially,

more prosperous and educated parents with fewer children have chosen to withdraw their children from the labour

force to give them opportunities to be educated at school improving the issue of child labour.

This is as a result of reduction in infant mortality rates as well as child malnutrition because people have better

sanitation, water supply, better education, better health care services which has resulted in higher life expectancy

rates as well as cognitive development as people eat healthier and become more productive adults, thus boosting

economic productivity of the nation, example East Asia & Pacific, Europe & Central Asia, South Asia and Sub-Saharan

Africa. As of 2012, world children under five years suffering from malnutrition reduced to 15.7%, mortality rate

reduced to 51% per 1000 live births, maternal mortality fell to 210 per 100,000 live births, while both primary

education and youth literacy increased to 90% as well as youth labour force participation rose to 64%, This was all

achieved before the millennium development goal target set to reduce poverty level by half in 2015. On the regional

level, most recent database from World Bank for 2014 shows that increase in economic growth (GDP) in Sub-

Saharan African has brought about the 59% life expectancy rate and education completion rates of 69% for both

male and female compared to previous years, East Asia & Pacific also record 75% and 105% respectively, other

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regions qualitative variables growth due to GDP rise can be viewed from the table below and this shows significant

improvements in all regions compared to earlier periods.

Proof of nations economic growth reducing poverty can be verified by looking at the past 200 years were considerable efforts have been made to lift the world out of poverty, in 1820’s only a small group of people (elites) enjoyed good and high standards of living, while the vast majority of people lived in extreme poverty even at that only a few places in the world had achieved very low levels of economic growth. The progress in the last 200 years was achieved as economic growth brought higher incomes to more and more people in the world. The share of people living in extreme poverty is smaller in richer countries, but some nations despite having low incomes also aim to keep extreme poverty level very low too. Economic growth over the last 200 years has completely transformed the world, and poverty level have continuously reduced over the last two centuries despite population increased 7-fold over the same time and this shows that a world without economic growth, an increase in the population would result in less and less income for everyone, and a 7-fold increase would make the world extremely poor.

Current data shows poverty level falling more quickly than ever before especially with industrialization and rising productivity (GDP), the share of people living in poverty started to decrease and continues to fall more and more in nations around the world . As a consequence of falling poverty, the health of the population improved dramatically over the last two centuries and population grew more due to increased economic activities. The growth in population causes the absolute number of poor people in the world to increase; despite the impressive world economic growth and development from 1945, the global polarisation of wealth has shown an alarming wide gap between and within citizens of the rich and poor countries, According to World Bank 2009 data from 1960 -2002, GDP of the 20 richest grew by 300%, while the 20 poorest grew by 20%, thus poverty still remains widespread.

According to the Washington Post of October 4, 2015, the World Bank with its UN Millennium Development Goals to eradicate extreme poverty and hunger, and improve health, education etc. is moving the world closer to the historic goal of ending poverty by 2030.

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http://ourworldindata.org/data/growth-and-distribution-of-prosperity/gdp-data/#note-7

http://ourworldindata.org/data/growth-and-distribution-of-prosperity/gdp-growth-over-the-last-centuries/



According to the 2016 most recent data in the world population of all nations in 2012 had 12.7% living at or below

$1.90 a day compared to 37% in 1990 and 44% in 1981. This means that, in 2012, 896 million people lived on less

than $1.90 a day, compared with 1.95 billion in 1990, and 1.99 billion in 1981. Also regions showed reduced poverty

rates, poverty income inequality gaps due to increase in GDP from 1981- 2014, based on the 2016 World Bank

Development Indicator data table below, East Asia & Pacific saw the most dramatic reduction in extreme poverty,

from 81% in 1981 to 7.2% in 2012. In South Asia, the share of the population living in extreme poverty is now the

lowest since 1981, dropping from 58% in 1981 to 18.8% in 2012. Poverty in Sub-Saharan Africa stood at 42.7% in

2012. China alone accounted for most of the decline in extreme poverty over the past three decades. Between 1981

and 2011, 753 million people moved above the $1.90-a-day threshold. During the same time, the developing world

as a whole saw a reduction in poverty of 1.1 billion. In 2012, just over 77.8 percent of the extremely poor lived in

South Asia (309 million) and Sub-Saharan Africa (388.7 million). In addition, 147 million lived in East Asia and Pacific.

Fewer than 44 million of the extremely poor lived in Latin America and the Caribbean, and Eastern Europe and

Central Asia combined.

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Analysis of Tables and Graph:

Based on the above table, it shows an inverse relationship between economic GDP growth and the poverty inequality gaps as well as poverty rates, this attest to Robertson’s analysis in the fastest billionaire book that as more and more people move into the middle class due to increase in income levels, corruption reduces and allows for a more equitable income distribution to all citizens.

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The growing concentration of global poverty in Sub-Saharan Africa is of great concern. While some African countries have seen significant successes in reducing poverty, the region as a whole lags the rest of the world in the pace of lessening poverty. Sub-Saharan poverty fell from an estimated 56 percent in 1990 to a projected 35 percent in 2015. Rapid population growth remains a key factor blunting progress in many countries.

In its regional forecasts for 2015, the Bank said that poverty in East Asia and the Pacific would fall to 4.1 per cent of its population, down from 7.2 per cent in 2012; Latin America and the Caribbean would fall to 5.6 per cent from 6.2 in 2012; South Asia would fall to 13.5 per cent in 2015, compared to 18.8 per cent in 2012; Sub-Saharan Africa declines to 35.2 per cent in 2015, compared to 42.6 per cent in 2012. Reliable current poverty data is not available for the Middle East and North Africa because of conflict and fragility in key countries in the region.

Poverty remains concentrated in Sub-Saharan Africa and South Asia and for the last several decades, the three regions, East Asia and Pacific, South Asia, and Sub-Saharan Africa, have accounted for some 95 percent of global poverty. Yet, the composition of poverty across these three regions has shifted dramatically. In 1990, East Asia accounted for half of the global poor, whereas some 15 percent lived in Sub-Saharan Africa; by 2015 forecasts, this is almost exactly reversed: Sub-Saharan Africa accounts for half of the global poor, with some 12 percent living in East Asia. Poverty is declining in all regions but it is becoming deeper and more entrenched in countries that are either conflict ridden or overly dependent on commodity exports.

Thus, despite seemingly unequal distribution of income within these developing countries, their economic growth and development have brought about improved standards of living and welfare The world population has experienced continuous growth since the end of the Great Famine and the Black Death in 1350, when it stood at around 370 million The highest rates of growth – global population increases above 1.8% per year – were seen briefly during the 1950s, and for a longer period during the 1960s and 1970s. The growth rate peaked at 2.2% in 1963, and had declined to 1.1% by 2011. Total annual births were highest in the late 1980s at about 138 million,[173] and are now expected to remain essentially constant at their 2011 level of 134 million, while deaths number 56 million per year, and are expected to increase to 80 million per year by 2040.[174] Current projections show a continued increase in population (but a steady decline in the population growth rate), with the global population expected to reach between 7.5 and 10.5 billion by 2050

Of all the factors influencing the level of economic growth in both developed and developing countries, income equality has a more beneficial impact than trade openness, sound political institutions, and foreign investment. Inequality is often the consequence of unequal levels of economic and social progress amongst nations and this is how poverty levels is best compared amongst nations, it is important to note that poverty is best measured in terms of low productivity and low income, but other measures of poverty can also provide very good measurements through quality of education, health, infrastructural developments and other social amenities like water and electricity. These measures do not only look at work as a source of income but at the safety and quality of the work itself.

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While within nation’s income inequality has increased throughout the globalization period, globally inequality has lessened as developing nations have experienced much more rapid growth. Economic inequality varies between societies, historical periods, economic structures or systems (for example, capitalism or socialism), ongoing or past wars, between genders, and between differences in individuals' abilities to create wealth. There are various numerical indices for measuring economic inequality. A prominent one is the Gini coefficient, this measures income inequality by looking at how much per capita income distribution within a country deviates from perfect equality, it ranges from 0 (perfect equality) -100 (perfect inequality), so the lower the Gini coefficient the lesser the income inequality vice versa, also other methods like Consumer Price Index (CPI), GDP deflator, Purchasing Power Parity(PPP) are used to measure income inequality.

Inequality is becoming an urgent issue of world politics at the end of the twentieth century. Globalization is not only exacerbating the gap between rich and poor in the world, but is also further dividing those states and peoples that have political power and influence from those without. While the powerful nations shape more ‘global’ rules and norms about investment, military security, and environmental and social policy, the less powerful nations are becoming ‘rule takers’, often of rules or norms that they cannot or will not enforce. The consequences for world ‐politics are profound. Economic inequality affects equity, equality of outcome and subsequent equality of opportunity. One of the most robust determinants of sustained economic growth is the level of income inequality. International inequality is inequality between countries. Income differences between rich and poor countries are very large, although they are changing rapidly. Per capita incomes in China and India doubled in the prior twenty years, a feat that required 150 years in the US.

This was due to the Chinese economic reform that opened China to globalization in the 1980s. Scholars find that China has attained a degree of openness that is unprecedented among large and populous nations, with competition from foreign goods in almost every sector of its economy. Foreign investment helped to greatly increase product quality and knowledge and standards, especially in heavy industry. China's experience supports the assertion that globalization greatly increases wealth for poor countries. As of 2005–2007, the Port of Shanghai held the title as the world's busiest port. Also In India, business process outsourcing has been described as the "primary engine of the country's development over the next few decades, contributing broadly to GDP growth, employment growth, and poverty alleviation". According to the United Nations Human Development Report for 2013, countries at varying levels of the UN Human Development Index the GNP per capita grew between 2004 and 2013 from 24,806 to 33,391 or 35% (very high human development), 4,269 to 5,428 or 27% (medium) and 1,184 to 1,633 or 38% (low) PPP respectively.

There are two main schools of thought that guide the policies set to proffer solutions on best way to address poverty

these are the Orthodox and Alternative approach. Orthodox analysis based living below world poverty line of a dollar

a day to meet only basic material needs, while the alternative analyses is based on material and non-material needs

major economic activity combined with technology and infrastructure development, which respectively relate Jeffrey

Sachs and Andrew Warner 1995 research thesis proffered that economic liberalisation in trade, finance and

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investment results in economic growth as well as Jim O’Neil’s growth map book were he also indicated that

demographic dividend and productivity through improved education, infrastructural development as well as

Robertson’s economic transformation of developing economies expanding now at the fourth stage of advanced

information technology would help move nations out of poverty.

Based on all these scholarly write-ups, international organisations have adopted the alternative approach like IMF

now offers debt forgiveness to HIPC to reduce economic hardship resulting from debt repayment to boost growth

and development. Also, United Nations with the aid of the Bush administration established Millennium Challenge

Corporation (MCC) with development goal to help reduce poverty by half in 2015 with world economic growth

through vibrant democracies in contrast to World Bank programs of the past which emphasized large infrastructure

structure projects controlled by governments. The hallmark of the MCC is the use of detailed criteria to specifically

measure democratic processes and the business climate where entrepreneurs can easily start and expand their

companies with projects developed at the grass roots level by low-income countries, rather than have projects

decided by consultants from rich countries.

Jim Yong Kim, World Bank Group President, said that “the continued major reductions in poverty were due to strong

growth rates in developing countries in recent years, investments in people’s education, health, and social safety

nets that helped keep people from falling back into poverty. He cautioned, however, that with slowing global

economic growth, volatile financial markets, conflicts, high youth unemployment, and the growing impact of climate

change, and with many of the world’s remaining poor people living in fragile and conflict-affected states, and the

considerable depth and breadth of remaining in poverty, the goal to end extreme poverty remained a highly

ambitious target. It will be extraordinarily hard, but it remains within grasp, as long as high aspirations are matched

by country-led plans that help the still millions of people living in extreme poverty.” World Bank endorsed two goals:

to end extreme poverty by 2030, and to boost shared prosperity by raising the incomes of the bottom 40 percent of

populations.

Future for nations in Poverty:

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The State of the World 2006 report said that India's and China's high economic growth was not sustainable. The report states, the world's ecological capacity is simply insufficient to satisfy the ambitions of China, India, Japan, Europe and the United States as well as the aspirations of the rest of the world in a sustainable way. In a 2006 news story, BBC reported, "...if China and India were to consume as much resources per capita as United States or Japan in 2030 together they would require a full planet Earth to meet their needs. In the long-term, these effects can lead to increased conflict over dwindling resources and in the worst case a Malthusian catastrophe. International foreign investment in developing countries could lead to a "race to the bottom" as countries lower their environmental and resource protection laws to attract foreign capital. The reverse of this theory is true, however, when developed countries maintain positive environmental practices, imparting them to countries they are investing in and creating a "race to the top" phenomenon.

This situation was also identified by the World Bank Chief Economist Kaushik Basu, a former Chief Economic Adviser to the Indian Government. “Development has been robust over the last two decades but the protracted global slowdown since the financial crisis of 2008, is beginning to cast its shadow on emerging economies, there is some turbulence ahead. The economic growth outlook is less impressive for emerging economies in the near future, which will create new challenges in the fight to end poverty and attend to the needs of the vulnerable, especially those living at the bottom 40 percent of their societies. The work is far from over, and a number of challenges remain. It is becoming even more difficult to reach those remaining in extreme poverty, who often live in fragile contexts and remote areas. Access to good schools, healthcare, electricity, safe water and other critical services remains elusive for many people, often determined by socioeconomic status, gender, ethnicity, and geography. Moreover, for those who have been able to move out of poverty, progress is often temporary: economic shocks, food insecurity and climate change threaten to rob them of their hard-won gains and force them back into poverty. It will be critical to find ways to tackle these issues as we make progress toward 2030.”

According to former UK chief government scientist John Beddington, growing populations, falling energy sources and food shortages will create a "perfect storm" by 2030 because food reserves is at a 50-year low and the world would require 50% more energy, food and water by 2030, also the situation in the Sahel region south of the Sahara, in terms of ongoing deforestation and soil erosion, is very serious. Also according United Nations' Food and Agriculture Organization (FAO) The world will have to produce 60% more food by 2050 to feed a projected extra 2.3 billion people and as incomes rise.

But the good news according to the Nobel Prize–winning economist Michael Spence writes, "The massive changes in the global economy since World War II have had overwhelmingly positive effects. Hundreds of millions of people in the developing world have escaped poverty, and more will in the future. The global economy will continue to grow – probably at least threefold over the next 30 years. One person's gain is not necessarily another's loss; global growth is not even close to a zero-sum game. But globalization hurts some subgroups within some countries, including the advanced economies.

Demographic changes in the developing world after active economic liberalization and international integration resulted in rising general welfare (infant mortality and life expectancy) and reducing inequality due to adult literacy and lower illiteracy rate among the young especially females guarantees that rates will continue to fall as time

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passes. Thus, despite seemingly unequal distribution of income within the developing nations due to income inequality with developed nations, war, corruption and mismanagement of funds, economic growth and development have brought about improved standards of living and welfare for the population as a whole, but according to Jim O’Neil growth book, demographic dividend in some developing nations that provide good education to its citizens would enable nations get out of poverty, when educated youths apply what they have learnt at their various places of work efficiently and thus boost economic productivity, especially with the advantage of being at the last stage of economic transformation “ Information Age” as indicated by Robertson in his fastest billionaire book. If the BRIC and N-11 countries - growth markets (Mexico, Indonesia, South Korea, and Turkey) and emerging markets (Bangladesh, Pakistan, Vietnam, the Philippines, Egypt, Iran and Nigeria) tap into these tremendous opportunities then the 21st Century economic growth will be in the developing countries of the G-25 and Africa in particular due to great demographic and productivity potential.

The future of further economic growth and reduction in poverty levels for all nations majorly rest on the how well sovereign governments with pressures from international organizations try to bridge the income inequality gap between its citizens by:

1. Improving quality of education.

2. Eliminating gender inequality in education and workplace.

3. Promoting local entrepreneurship using nation’s economic resources.

4. Degree of openness of organizations through liberalisation to reduce level of protectionism on trade, investment and finance flows

Furthermore, it is crucial that national governments and international policy makers plan development programs and policies that will continually improve lives, and bring the poorest in their country out of destitution. Also Revenga has said the World Bank Group would continue to work with its country clients and partners to improve how it measures and tracks poverty, to build country statistical capacity and fill persistent data gaps, and to integrate solid data and analysis into its development work to better reach people and their families who live in entrenched poverty.

I believe that, if all these necessary preventive and promoting measures are committedly put in place, poverty might really become history by 2030.

REFERENCES AND BIBLIOGRAPHY

World Bank Data on Economic Growth and Poverty for Regions and World (2016) http://data.worldbank.org/

World Development Indicator (WDI) http://www.worldbank.org/ April 11- 15, 2016

PovcalNet http://iresearch.worldbank.org/PovcalNet/ (2016)14 | Page

http://iresearch.worldbank.org/PovcalNet/

http://data.worldbank.org/





World Politics Wikipedia, the free encyclopaedia (2016)

Globalisation 101 Buzzle.com (2016)

http://ourworldindata.org/data/growth-and-distribution-of-prosperity/world-poverty/ World Poverty by Max Roser (2016)

Levin Institute “Globalisation 101 a State University New York (Global Workforce Project)” (2015)

World Politics Wikipedia, the free encyclopaedia (2015)

Globalization Pros and Cons List OCCUPY THEORY (2014)

Pros and Cons of Globalization: Controversy and Discussion by NICK GIBSON MARCH 26, 2014

FAO Agricultural Economics Division “World Agriculture towards 2030/2050” (2012 Revision)

Inequality, Globalization, and World Politics by Andrew Hurrell and Ngaire Woods (1999)

Globalisation of World Politics (An Introduction to International Relations) by John Baylis, Steve Smith and Patricia Owens, sixth edition (2014)

American International Aid and its unique potential for Nation Building emphasizing Economic Growth by Vibrant Civil Society Processes by Professor Larry Bridwell (Pace University) 2008

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http://ourworldindata.org/data/growth-and-distribution-of-prosperity/world-poverty/

global econmic growth and poverty reduction

Documents