Faculty News

Globalization: Why Extreme Poverty Should Matter to the Developed World

What is poverty?

·         2 main concepts to remember

1.       History:  where you come and the resources you have determines how you are affected and the capacity you have to move out of poverty

2.       Dynamic:  It would be easier to rise out of poverty if it weren’t a dynamic phenomenon; your improvement is general the result of the improvement of others as well

·         Poverty vs. Being Poor

o   Poverty = a constant condition

o   Poor = an experience; has a lifespan

·         Levels of Poverty

o   Poverty line: determines who is eligible to receive help through social programs, etc.

o   Misery Line: People who do not earn enough to at least eat, leads to starvation & hunger; considered in “extreme poverty” when below this line

“Poverty” in the Developing & Developed World

Poverty in the Developed World:  Social Exclusion

·         A new type of poverty

·         Multidimensional concept

·         When you are impoverished socially—lack of access to healthcare, education, etc

Poverty in the Developing World

·         Life expectancy is 40 years old, meaning there is a 40 years gap in pursuit of happiness compared to the developing world where life expectancy is about 80 years of age

·         Half of the world does not have access to clean water

·         “Bottom Billion” – the poorest in the world

o   58 countries, 1 billion people

Causes of Poverty

·         Traditional approaches/views

o   Lack of income & access to basic infrastructure

o   Poor public Services

o   Underdeveloped transportation and communication networks

o   Geographic isolation

4 Traps: A Modern Approach

1.       Conflict Trap

o   The idea that free elections lead to growth from poverty

o   “15 minute miracle” – the mutual acceptance of leadership between two candidates/bodies;  agreement from the “loser” continue to work together/support the “winner”

o   It is ability to accept the results of the election and work together, not the election itself, that determines the success of a country; this can prevent uprisings after the election which lead to unarmed and armed conflicts

o   People may not have the money to eat but they will find the money to fight

2.       Natural Resource Trap

o   Dependence on a single resource

3.       Landlocked with Bad Neighbors

o   Example using ocean, country 1, country 2

o   if country 1 does is not doing well, country 2 will have limited access and opportunity to import/export, access the ocean modes of transportation, etc.

o   This can drastically affect the success outcome for country 2

4.       Bad Governance in Small Countries

o   Recent studies show that the key factor which allows a poor country to avoid such traps is not in fact free elections, but education

Consequences of Extreme Poverty

·         Poor nutrition

·         Infant mortality, low self-esteem

·         Corruption & lack of democracy

·         Low productivity and salaries

·         Low income

·         Solution:

o   Handing over money alone does NOT solve problems of extreme poverty

o   focus should be on how and where funds are allocated; you must follow-up to ensure financial assistance is going to the right hands

o   Perhaps distribute it in parts, assuring that progress is being made before another sum is given

 “Globalization”

·         In this context = open markets, competition, import/exports

·         It guarantees nothing….it can induce and reduce

Why Extreme Poverty Should Matter

1.       Because of something called SOLIDARITY

2.       Because problems do NOT know any borders or barriers

What We Can Do

1.)     Conflict Trap

·         The cost of war spreads beyond geographic borders and time constraints

·         General belief: promoting growth is essential to minimize war risk – yes, but you MUST be sure that the growth is done with fair income distribution

2.)    Natural Resource Trap

·         Promote diversity within the economic structure

3.)    Landlocked Trap

·         Most important to focus on improving economic integration so the countries can then work together to solve economic problems

4.)    Bad Governance

·         A civil war costs on average $65 billion/conflict

·         Must help build a clean decision-making process; VITAL future task

·         Develop and protect free press

                                                               i.      Correlation can be found between the poorest countries and countries who do not have free press

Concluding Sentiment:

To reduce poverty is not only a matter of solidarity, it is a way to promote development and guarantee a more peaceful world.

Click here for a copy of Dr. Lucio's Powerpoint presentation.