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In the contemporary world, countries across the globe develop diverse initiatives to combat poverty and improve the quality of life in their populations. Such initiatives seek to improve public members’ economic potential and productivity to achieve economic development at both personal and societal levels. Many governments, therefore, encourage the use of production tools and equipment to improve output and stimulate growth. They also embrace emerging communication technologies to encourage greater association among members of the public and their connection with the outside world to stimulate local, regional, and international trade. Continued use of such strategies to stimulate economic growth has brought about rapid globalization trends among nations, which have brought about greater integration of poor countries into the global economy of open competition. While globalization is considered an ultimate tool for eradicating poverty, critics often blame globalization trends for expanding economic disparities among nations. In the strive to resolve the existing debate regarding the relationship between globalization and poverty, the video “World Development Report 2009” by the World Bank describes developmental changes among nations that have resulted from rapid globalization taking place across the globe. Globalization helps to hedge economic density disparities, reduce the economic distance in society, build on specialization and improve access to goods and services among members of society.
The video describes the role of globalization in hedging economic density disparities among nations to promote growth in the local and world economy. Due to disparities in population density among regions, the total number of people sharing a single unit of land and other resources varies among nations, which attracts economic differences. For example, in densely populated regions, the level of competition for the available resources is high, which significantly reduces the economic growth potential in such regions. As a result of globalization, the world is experiencing more uniform population distribution. Due to the emergence of transport systems that connect different countries, individuals from poor societies and remote regions may travel to urban centres to seek opportunities to improve their economic status. As a result, economic density in remote regions increases, stimulating growth. For example, although North-East Brazil is rich in natural resources, the region has been characterized by extreme poverty (World Bank). After constructing a road network connecting the region with the country’s urban centres, many people moved to town centres to avail locally produced products to markets, improving their economic positions. Although many people who moved from the interior ended up living in slums, the speaker identifies that the existence of slums illustrates people who are trying to get closer to economic opportunities (World Bank). The video, therefore, describes the role of globalization in stimulating greater economic density to eradicate poverty in society.
Globalization also reduced the economic distance between people and centres of economic activity to eradicate poverty. When the economic cost incurred in the movement of factors of production to the market exceeds the economic benefits accrued from the production and sale of goods and services, society records a decline in its economic position. Economic distance, therefore, constitutes a critical impediment to strategies put in place to eradicate poverty in society (Andergassen et al. 72). However, due to rapid globalization activities taking place across the globe, the economic cost incurred in the movement of factors of production to the market is observed to decline. For example, with transport systems connecting multiple countries, local communities in developing countries gain greater capacity to avail their products to international markets while importing technological equipment and other products that they demand. As a result of the increased use of technological tools in production, the production output among such communities also improves. For example, Istanbul’s expanding trade links with Europe have facilitated local economic growth in the region due to increased demand for local products in European markets, which has led to a significant decline in poverty levels in Turkey (World Bank). Globalization has reduced the economic distance between Turkey and Europe to stimulate economic growth.
Globalization also supports dynamic multicultural talents to support the division of labour and specialization. With the emergence and global adoption of communication technologies, people from different locations can interact socially and professionally. Due to the diversity of capabilities among different ethnicities, local communities gain greater recognition and appreciation in foreign countries. As a result, globalization supports the division of labour as each country is associated with certain products and capabilities in the international markets. Members of local communities can, therefore, avail their low-local-demand products and skills in global markets to improve their economic and social standards. According to Arkolakis et al., increased global specialization implies that the global economy has different regions making a specific contribution to attract a more efficient supply chain and open up greater production opportunities for local communities. Eventually, countries that embrace globalization record an increase in economic potential and a consequent decline in the level of poverty. Moreover, increased global communication attracts cultural globalization as people from diverse ethnic avail products of cultural value in international markets. The sale of such products attracts economic growth among local communities, supporting strategies to combat poverty. Therefore, division of labour, specialization and cultural globalization constitute critical economic benefits of globalization that help to reduce poverty levels among communities in the contemporary world.
Globalization has attracted greater innovation among members of society to create opportunities for economic development. Through the vertical transfer of capabilities, globalization stimulates innovation by domestic businesses in emerging market economies, which attracts economic growth. Particularly due to technological advancement, transportation and communication costs across nations have significantly reduced, facilitating innovative sourcing and processing of raw materials into finished goods. Consequently, the level of production output among developing countries increases, leading to a gradual decline in poverty among communities. Moreover, due to increased interaction among members of society living in different geographical regions, people innovate ideas to produce goods or services that could achieve high demand levels and attract economic development. For example, despite living in slums for many years, William interacts with other people on the internet and identifies a way through which he could innovate a new way of printing banners for local businesses (World Bank). He also uses the internet for marketing his brand, improving his economic status. Therefore, by utilizing opportunities established through globalization, less fortunate members of society can innovate ways to improve their living standards and contribute to the process of eradicating poverty.
Globalization also improves the quality and affordability of products in society, improving the quality of life among less fortunate members. Due to increased global interaction, consumers realize the variety of options to purchase products from all corners of the globe. Therefore, they choose to purchase products of the highest quality and offered at the lowest rates. To improve their competitiveness, companies enhance the quality of their products and offer them at affordable prices. Eventually, poor members of society gain access to high-quality products at affordable prices, which helps to reduce disparities in the quality of life led by the rich and the poor. Also, combining efforts by nations through globalization allows for more innovation to address economic problems that affect people across the globe. For example, conservation efforts to combat carbon emissions among nations reduce pollution inequalities in which poor members of society are more exposed to the health hazards of pollution. As a result, less fortunate members of society evade the economic burden of pollution, which improves their financial well-being. Therefore, globalization improves the quality of life among poor members of society.
Globalization constitutes a key factor in the fight against poverty. Globalization supports initiatives by nations to hedge economic density disparities between rural and urban regions to promote growth and open up regions to the global economy. It also reduced the economic distance between people and centres of economic activity. Through globalization, local industries enjoy more refined supply chains, which allows them to avail themselves of products in the global market to achieve economic development. Globalization also supports dynamic multicultural talents, particularly by selling value products in international markets, to support the division of labour and specialization. Over the years, globalization has improved the level of innovation among members of society to create opportunities for economic development. It has also improved the quality and affordability of products in society, which brings about growth in the quality of life among less fortunate members of society.
World Bank. “World Development Report 2009 – World Bank” YouTube, 19 Nov. 2008. https://www.youtube.com/watch?v=P6ihEQtCSss&t=264s
Andergassen, Rainer et al. “Innovation diffusion, general purpose technologies and economic growth.” Structural change and economic dynamics, vol. 40, 2017, pp. 72-80. https://www.sciencedirect.com/science/article/pii/S0954349X16301655
Arkolakis, Costas, et al. “Innovation and production in the global economy.” American Economic Review, vol. 108, no. 8, 2018, pp. 2128-73. https://www.aeaweb.org/articles?id=10.1257/aer.20141743
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Published On: 01-01-1970