There are a number of factors that have contributed to the increase in poverty level globally and the gap of inequality between the rich and the poor countries in the world. The 20th century has been the worst hit by this problem in the world history and is marked by malfunctioning of several productive systems particularly those in the developing nations. This has also been expressed by lack of proper arrangement in the side of the national institutions as well as in the educational and health programs. There are various causes of global impoverisation and social inequality and some of these causes are: high rate of unemployment, structural adjustments, overpopulation, colonialism, foreign trade and investments, cheap labor and low consumer spending power. These and other factors cause there to be a very wide gap between the rich and the poor nations. This research paper will lay its focus on bringing to the light how these factors led to the global impoverisation.
The living standards in the 20th century are said to have increased in this period. The less developed nations are said to have registered an economic growth more than the developed nations despite the fact that but the gap between the poor and the rich has continued to widen. His was not the trend after the world war period. After the Second World War, most nations in the world embarked on economic programs that were geared towards bringing all those nations that were affected by the war back to their feet Within a very short time, they had achieved an economic growth and their eco and this shows that the gap between the poor and the rich has widened economies were performing quite well. (Stiglitz J. 2002)There were factors that helped these nations to register growth in the economic sector and some of these were the fact that after the Second World War, peace prevailed in most of the countries that were not directly involved in the cold war. Another thing is that there was sustained economic growth and the global market was a bit free. These factors helped nations such as Indonesia and China to make economic reforms. The recent poverty globalization has largely affected the achievements that were made after the Second World War. A lot of the significant change was registered especially in the third world countries which were largely affected by colonization in the post world war period. After the Second World War, many less developed which were wallowing in poverty because of the far reaching effects of colonialism.
After many of these nations successfully suppressed colonialism, globalization of poverty has continued to be reported in most countries especially those in western Europe, north America, some nations which formerly belonged to the Soviet block union and also in some newly developed nation especially those in the south east of Asia and in the far east. Impoverisation is not localized to only one region and that is why it is being regarded as a global thing. (Stiglitz J. 2002)
The former nations in the Soviet bloc are not spared by this and they are reportedly said to be highly affected by poverty globalization. The post cold war effects seemed to be far reaching when compared with the great depression period. The earning scales in the Soviet nations after the 1992 period were rocked with hyper inflation that had been sparked off by the ruble down fall. The trials to put the economy back to trail or what could be referred to as the shock treatment in the economy led the government of these nations to privatize most of the public institutions had some unanticipated negative effects as most of the workers who used to work on these firms were rendered jobless with respect to the economic adjustments that were made by the Yeltsin government in 1992 January, the price in the Russian Federation went up with a hundred percent. This took place immediately after the macro reforms were implemented. These reforms affected the military industrial sectors but also ripped into pieces the civilian economy. The impacts of these reforms were weightier than those that were felt during the Second World War period when Germany had occupied most of the Byelorussia as well as some Ukrainian parts in 1941. The economy of the Soviet Union republic had also been affected by the intensive bombing of its key industrial infrastructure by the Germans.
In 1942, the Soviets Gross Domestic Product was said to have gone down by twenty percent when compared with that of the post war economic performance but the figure skyrocketed by 44 percent in the 1980s-1990s period. Though the living standards in the Eastern Europe was almost equal to that of the Western world due to the reforms that were made concerning the commodity markets, the earnings per month continued to be as low as ten US dollars. Many people were unable to enjoy having normal living standards as they were even unable to afford clean water, electricity and transport.
The economic disintegration is also being felt in the west especially after the 1990s period. This is due to the use of very harsh austerity measures. They have slowly led to the deterioration of the welfare state and have greatly affected the social security. Much of the problem in the Western world is emanating from the changes that have been made by the insurance companies and especially the degradation of the unemployment schemes as well as the social funds and the pension funds privatizations. The governments of these nations were not able to provide these services to the masses and this forced them to offer this job to the private firms. In short, it is this privatization that led to the increased living standards in the western world. (Sanford J.E. 1988)
Again this privatization of the social welfare provision led to the increased social strife and civil disobedience. The urban life is gradually becoming very hard to and the urban areas in the Western world are undergoing a process that could be regarded as the third worldlisation. Today the metropolitan environment is rocked by social apartheid that has led to the compartmentalization of the urban landscape along ethnic and social lines. The poverty levels in the American and the European urban areas could be equated to that of the third world nations. (O’Brien and Williams 2007)
Global impoverisation has also been witnessed in among the newly developed nations and especially those in Asia. These are the nations that are referred to as the Asian Tigers. This trend was caused by the emergence of movements against the national currency. Some of the most affected nations are: China, Indonesia, Thailand and Korea and this led the living standard in these nations to go very high. Most of the state owned enterprises in China for example, were forced to lay off most of the workers who used to work in those organizations. The problem could be said to have started in 1997 when the institution speculators appropriated billion of dollars from the official Chinese Central Bank and the same case happened to the other Asian nations. This in short implies that these nations became unable to finance their economic development programs by using their monetary policies. The appropriation of the nations’ official reserves could be seen as part of the economic restructuring process. This hampered the economic progress of these nations leading to an increased level of unemployment and bankruptcy. This in other words meant that the Central Bank could not have powers over the institutional speculators who had so far gained an upper hand in the private sector
There are a number of factors that could be termed as the historical causes of social inequality and poverty globalization. This trend of globalization effect is also felt in the third world countries and mostly those in Africa. The living standard of Africans is below the one that is recommended by the United Nations Development Program of one dollar a day. (Human Development Report, 2000.)This is because most of the Africans are not employed and the fact that poverty has engulfed most of these nations. The other reason is that these nations lack proper economic plan strategies. Most Africans cannot afford proper meals and frequently suffer from malnutrition. They are also affected by the tropical diseases such as malaria and other terminal diseases such as cancer and HIV/ Aids. (Baeur PT. 1982) These diseases continue to cost many of African lives despite the fact that many of these victims have been put under retro viral programs. Most people who cannot afford then just stay at home where they succumb to these diseases.
Heavy reliance of these drugs forces them to spend most of their money on buying these drugs and that money that could have been used in other programs is spent on buying drugs. These drugs are not locally and for this reason they are very costly as they are exported all the way from the Western nations. This situation aggravates the situation in Africa. This is because most of these nations are not yet developed and heavily rely on aids they are given by the already developed nations.
One of the historical factor that could be blamed for the globalization of poverty is the fact that the trade that was being carried out in the Trans Atlantic trade. Most of the Western world as a result of this trade developed long before those nations that were used as the source of raw materials could develop. Because of the overproduction of the goods by their industries, they were forced to go overseas to look for the market for their products. That was why they started to send their explorers to different parts of the world. Their goal was not only to look for the new market but also to look for places that could help them with raw materials.
The searches for overseas market greatly contributed to the globalization of poverty and social inequality. These nations established the sources of their raw markets in the overseas colonies. They mined all the valuable resources of these nations and they used it develop theirs at the expense of others. A country like Britain had a lot of colonies where it obtained its raw materials from as using these places as the market for their produced goods. It had its colonies in Egypt, Uganda, Nigeria, India and Kenya and was not willing to let them go. For them to survive in these regions they applied some oppressive laws that the subjects had to follow. These nations were the source of its raw materials for its industries as well as the market for their produced goods. In short their problems became the problem of the protectorate and for this reason, the high level of poverty in the third world countries could be attributed to the globalization of the world market. (Baeur PT. 1982)
Another thing that could be blamed for the globalization of poverty and social inequality is the issue of slavery. The Trans Atlantic trade greatly contributed to the impoverisation of the African states. This was because most because of the slave labor that was used in the plantations was got from Africa. The creative minds that could have been used to develop the African states were wasted in the plantations where their work output was not valued. They were used by the colonizers as means of advancing their economies. Much of the European nation’s wealth was acquired through this means and could be attributed to the Africans who worked in those plantations without pay.
Another causal factor of the globalization of poverty and the increase in the gap between the rich nations and the poor ones is the issue of colonization. When colonialists went to Africa, they destroyed the traditional boundaries of the traditional societies and made theirs without any regard of the economic sustainability of those nations. For example Gambia was made to be a small country that cannot compete globally with other big nations that are capable of producing goods en masse due to its small size.
These new nations that were created by the colonialists have in one way or the other led to the disharmony that is being experienced in most parts of Africa for example in the Biafara region in Nigeria, Burundi, Rwanda, Sudan, Senegal and the Moroccan crisis. (Baeur PT. 1982)The same thing is happening in the Balkans where border problems have led there to be some land subdivisions for example in Bosnia and Serbia. This adversely affected the economies of these nations something that lowered the living standards and the gap between the rich and the poor countries continued to widen. The problem of land ownership had been witnesses in countries such as Kenya, Zimbabwe and in South Africa where the minorities own the biggest percentage of the state’s land. In South Africa foe example, eighty percent of all the fertile land was owned by the whites and the same was the case in Kenya and Zimbabwe. (Williams WE. 1982)
The Western nations relied on the settlers to finance their mother nations and had little regard for the natives. This overseas ownership of properties has been one of the key historical causes of the global poverty and the most affected are the third world countries where poverty levels have risen to unbelievable heights. What made the matter was the fact that even those Africans with some small pieces of land were not allowed to grow cash crops infact cash crops were a preserve of the whites. Plants like coffee, sisal, coffee and tea were only supposed to be grown by the whites. This trend was a scheme that was designed to make sure that all the wealth that was acquired from Africa went abroad to help their mother nations.
The next factor that could be said to have a contributory factor to the globalization of poverty is the impoverisation program that was purposely designed by the whites so that the locals would work in their farms. The colonialist once they went to Africa alienated their land and left them landless. In order for them to survive they were forced to work in those farms. The colonialists also introduced some taxes that every adult colonial victim was to pay yet they had no natural resources. This forced them to seek for jobs in the white settlements. Were it not for this colonization, may be the situation could be otherwise. (Williams 1982)
In general this led to the imbalance in wealth as when their mother countries continued to get rich, those under colonization continued to suffer economically and socially. The debate on colonialism remains a controversial issue as many deny that there is a relationship between colonialism and the rise in poverty scale in the world. The colonialist met a stiff resistance from those nations that they were colonizing for example the Spanish met a stiff resistance from the Incas and the Mayas who were found both in the South and in the Central America. The British colonialists also met some resistance in Africa and in India. The facts attesting to the facts that colonialism caused poverty globalization is that the living standards of the affected nations improved soon after colonialism ended though the gap between the rich and the poor nations. (O’Brien and Williams 2007)
Still another factor that led to the globalization of poverty is the world wars. These wars greatly affected the economy of most of the European nations. This led to the rate of unemployment in the world and in turn the purchasing power of the consumers went down too. When workers are given low wages and salaries, the purchasing power decreases or the consumer power wanes. Due to the economic recession during the world war period, most nations in a bid to increase their production of urged their companies to intensify their effort something that led to the overproduction of properties. The problem resulted not because of overproduction but it was a result of lack of consumer power. This lack of purchasing power led to the collapse of many manufacturing companies and also the primary producers. (Stiglitz J. 2002)
Rapid technological change is also another factor that led to the poverty globalization. This was caused by the advancement of science as in each year a new machine was invented and introduced in the market. Not that machine is bad but they have their own demerits and one of these is that they render once employed people jobless.
The rapid technological inventions also lead to the globalization of poverty. Most of these latest technologies originate from the western world and then they are introduced to other parts of the world. Technology greatly helps the economy of nations to develop as the production level definitely goes up but this increased level of production does not address the problem of social inequality and poverty increase. The sad part of this technological advancement is that they render many people jobless. Infact most people who used to work in the offices were replaced by computers something that reversed the fight against joblessness and this has become one of the greatest challenge that both the developed nations and the less develop nations are experiencing. This is like a new economic order that relies on cheap labor and this is the way poverty has been internationalized. As per the International Labor Organization (ILO), a third of the total world global force or one billion of people in the world have been rendered jobless as machines continue to replace manpower. This has also been witnesses in mechanized agriculture where man power was replaced by tractors and ploughs. Machines are capable of doing a work that could be done by very many people. (Human Development Report. 2000)
Apart from the above mentioned causes of poverty globalization mentioned above there are also current causes and some of these are; the ever increasing world population, this has led the job opportunities to be insufficient. It is well known that people suffer more when they do not have reliable jobs. When people are many than the job opportunities , what results is that even the employers start exploiting them as they are desperate for jobs This is when they start paying then small salaries and wages. Other factor that leads to the increase in social inequality in the world is the destruction of small scale businesses by the big ones. Most of the big companies are capable of producing a lot of goods thus destroying the small scale companies as they have no where to take their products, this affects the economy of those poor countries that are dependent on them.
Another factor is the structural adjustments, macro economic reforms internationalization. This was particularly witnesses in the early periods of the 1990s when the debt crisis soared up because of the rise of the prices of goods and the interest rates.
In conclusion, it can be said that many of the said reasons as to why poverty and global inequality has continued to impact on our society could be traced back to the old times. In the immediate post war period, the world economy was performing excellently but in the 1990s the progress reversed. This was as a result of the mistakes that happened and have continued to affect us up to date. These are factors such as the global trade and other investments and particularly the Trans Atlantic Trade, colonialism, technological inventions and between the rich and other poor nations and widespread corruption. It is these factors that have led to the widening of the gap between the wealthy and the poor countries.