Globalization causes poverty

Running head: GLOBALIZATION CAUSES POVERTY
Globalization causes poverty
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GLOBALIZATION CAUSES POVERTY
There has been argument on the fact that globalization causes poverty. There has been
varied views on the fact that the process of globalization is an important cause of poverty.
There are two school of beliefs of this. One set of people believes the fact that globalization
has exposed the poor people to an increased amount of competition. The other set of people
believes the fact that globalization has made the position of the poor people stronger. The
essay analyses the argument and tries to explore all the possible angles related to it. The point
that emerges in this case is that there is a rising gap between the rich and the poor. It is
however a difficult task to establish a link between the economic globalization and poverty
for several reasons. A major part of essay tries to explain the reasons of the same ( Baylis,
Smith and Owens 2017).
The globalization increases the competition among the different workers. There is a
rapid increase of foreign trade and investment. It is unfair to state that globalization gives rise
to poverty without knowing the aspects related to poverty. Poverty can be measured in
different ways. It is related to the average population of the country. It is measured by the
consumption capacity of the country’s population. It has been observed that in the historical
many people were poor for multiple reasons. According to the statistical data globalization
has proceeded in a larger scale only since the year 1980. It has been observed that due to
globalization there has been a decrease in the number of population in many countries. There
are many countries that have improved due to globalization (Beck 2018).
There are many evidences of the gap that exist between the richest and the poorest
countries. There has been an increased amount of difference between the richest group of
people and the poorest group of people. The ultimate reason of globalization that can be
upheld is inequality. However the inequality might increase without an increase in the
poverty rates. This point can be established with the example where it has been seen that due
to globalization an increased opportunity for the wealthy people compared to the poor. It is

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GLOBALIZATION CAUSES POVERTY
commonly known that the rich get richer as they are exposed to the globalization more than
the poor. This is the reason the poor get poorer (Bergh and Nilsson 2014).
According to Bourguignon (2017), one major characteristics that links the
globalization and poverty is the generalization from specific instances of impoverishment to
grand global developments. There are situations when the governments assume debt in
private capital markets and declining world demand for their commodities depresses prices
and in such cases they take fund from the IMF to repay their loans and they agree to the
conditions for the internal reform and these conditions impose hardship on their people. It is
therefore safe to conclude that globalization acts as a major cause of poverty.
It has been argued by Devas (2014), that the concept of “national economies” are
disappearing. The meaning of this is that the multinational companies are looking forward to
set up their company in different countries across the globe. While doing this the business
competitors are taking up their business from the domestic competitors. The local companies
of that region are running out of their business because of this and this is the reason the
people are becoming poor. Critics like Goldin and Reinert (2012), argue that globalization
deepens poverty by leaving the poor behind. The first reason for this is without capital one
cannot gain from the economic integration. The poor usually have no capital. The second
reason is due to the uneven development. It broadens the gap between the social and the
economic factors. This heads the state towards a destruction which is known as the creative
destruction. The exploitation of the rich countries is considered to be the real cause of poverty
of the developing nations. The other point that should be considered in this ground is that
globalization has increased inequality by having significant and uneven effects upon various
types of social stratification like, class, gender, race, urban and the rural population (Hebron
and Stack 2016).