PS

Poverty and Wealth - Comprehensive Notes

Interrelationship of Poverty and Wealth

  • The coexistence of poverty and wealth in the world.

  • Both poverty and wealth affect international relations and state capacities.

  • Sovereignty and Globalization:

    • Traditional views of state sovereignty are changing due to globalization.

    • Economic agreements and international organizations challenge the notion of absolute sovereignty.

    • Human rights considerations compel states to obey global standards.

Defining Poverty

  • Measurement of extreme poverty focuses on income, defined by the World Bank as living on 1.90 or less per day.

  • Quality of life must also be considered when discussing poverty (access to health care, education, clean water).

  • Current statistics show approximately 700–730 million people live in extreme poverty (9% of global population).

Income by Country Classification:

  • 1.90: low-income states

  • 3.20: lower-middle-income states

  • 5.50: upper-middle-income states

  • 21.70: high-income states

Key Conditions Preventing Access to Wealth

  1. History of Exploitation

    • Colonialism and slavery have long-lasting effects, creating entrenched inequalities.

    • Example: South Africa's apartheid system brought disparities that persist today.

  2. War and Political Instability

    • Conflict disrupts economic development.

    • Example: Syria’s civil war led to millions being displaced and weakened state governance.

  3. Structural Economic Conditions

    • The global economic order often favors wealthy nations and disadvantages developing ones.

  4. Inequality

    • Economic inequality reinforces poverty and limits social mobility.

    • The Gini Coefficient measures income distribution; higher values indicate greater inequality.

Poverty Reduction Efforts

Strategies ImplementedSince WWII:

  1. Official Development Assistance (Aid):

    • States spent 149.9 billion on aid in 2018.

    • Aid success is inconsistent; conditions can exacerbate issues (e.g., structural adjustment programs).

    • Examples of misuse include corruption and prioritizing political interests over genuine assistance.

  2. Trade and Investment:

    • Global trade has increased but does not always benefit developing states adequately.

    • Issues include inadequate infrastructure and conditionalities attached to aid.

  3. Money Lending:

    • Development loans can facilitate growth but can also create debt burdens hindering progress.

    • The World Bank was established to provide loans to developing nations.

  4. United Nations’ Goals:

    • The Millennium Development Goals (MDGs) aimed to reduce extreme poverty but had mixed results.

    • The Sustainable Development Goals (SDGs) set more detailed targets to address poverty comprehensively by 2030.

Globalization's Role in Wealth and Poverty

  • Globalization entails economic integration and technical advancements, impacting local economies worldwide.

  • Poses both opportunities and risks:

    • Can facilitate growth (e.g., China’s economic rise) but also exacerbate inequalities.

    • Critiques include the notion that globalization leads to 'Americanization' and exploitation of poorer nations.

Legacies of Colonialism and Current Poverty Dynamics

  • Historical exploitation shapes contemporary economic structures and inequalities.

  • South African case illustrates how racial policies continue to affect economic participation.

  • Economic growth has not effectively translated to poverty alleviation post-apartheid due to systemic issues.

Conclusion: A Call for Ethical Responsibility

  • Extreme poverty persists alongside wealth, highlighting systemic inequalities and the need for ethical consideration in policy choices.

  • The ongoing commitment to SDGs aims to promote a fairer global distribution of resources.

  • Recognition of shared responsibility across nations is essential for a just future.