Global economy
The term global economy is used to describe an unrestricted movement of goods, services and labor from one country to the other. It is a reflection of an inter-connected world characterized by free movement of labor and capital across the world.
The concept is associated with globalization which is the combination of production and consumption within different markets across the world, Pauly& Steven, (2005). Globalization has benefited countries through improvement of various economic developments in the world. A global economy on the other hand is a world economy with no specifications of goods and services as it provides a wider range of opportunity to traders and consumers to make a decision on which kind of trade to engage in thus improving productivity.
Though global economy has raised the world productivity and living standards of the humans due to increased income, it has led to greater inequality within countries as evidenced among the less developed economies in Africa and other countries such as China and Brazil.
Inequality between countries has further led to a wider economic gap between citizens living in developing countries. As a result, unemployment is rampant in these countries causing even skilled citizens have no opportunities to get absorbed into the job markets. Developed countries therefore find it cheaper to produce goods in the less developed countries due to cheap and abundant labor as well as underutilized resources.
This has promoted overreliance of less developed countries on the developed countries to for support to run their ailing economies full of war, hunger and human injustices which have attracted a large number of private organizations working tirelessly to control poverty in the world. However, these private efforts need economic and political goodwill from the various governments for accomplishment. The global poverty resistance impacts positively to the global political and economic developments.
Importance of global poverty reduction to world political developments
According to global poverty report released in July 2000 at the G8 Okinawa meeting, poverty eradication was described as “both a moral impressive and necessary for a stable world” (World Bank, 2000, pages i).
Resistance to global poverty has several benefits to global political achievements. To start with, it promotes peaceful coexistence among countries in the world. As in less developed countries, the continued wars and wrangles caused by inequality among citizens leads to political instability that extends to other countries and even continents.
Poor people usually resort to violence either in the form of terrorism or drug smuggling in an attempt to find solutions to their poverty. However, some rich individuals could capitalize on this state to organize international crime or terrorist attacks. This is because majority of the genuinely poor individuals have no means and time to organize crime that poses threat to world security since they channel their income to households at the expense of investing in wars.
Similarly, global poverty poses threat to security personnel in various countries. This is because whenever the poor feel insufficient of their needs, they often find solutions in activities that threaten the internal security in their mother countries .This leads to interruption of the production processes and scare away foreign investors who have investment interest in these countries, Pauly& Steven (2005).
In response to the situation, most heads of states deploy military or police force to curb the threats as opposed to creating strategies that would improve the economic status of these people. Global poverty reduction would eliminate improper use of security forces in solving national issues leading to improved political leadership.
Improper utilization of funds in a country promotes inequality among citizens resulting into denial of democratic rights such as voting by the political leaders. This results into political wrangles among political leaders as they scramble for power. As a result, the poor citizens break into war within and outside the continental boarders.
This makes global poverty be considered as the main cause of political instability among nations and its termination would lead to good governance and world security. In addition resistance to global poverty would lead to bourgeois morality, Pauly& Steven (2005).
This is because the due to massive poverty around the world, some developed countries use the situation instigate wars by sponsoring different factions opposing government policies. As a result, they sponsor individuals whose power will encourage them achieve their own economic developments through cheap labor and even exploitation of economic resources.
Ending poverty in these countries would ensure political autonomy and no rich country would interfere with the political stability of another country. As a result countries would shift their interest to factors such as environmental conservation as opposed to war that derails their political autonomy.
Importance of global poverty resistance to the world economy
World economy has recorded greater developments due to globalization that enables free movements of people, goods and services. Global poverty poses threat to global economic developments due to income inequalities accompanying it.
This has led to dept crises beginning 1982 when the World Bank lent out a large sum of money amounting to $2.3 trillion to the less developed countries which are not yet recovered. As a result, the outreach defaults on payment of these loans undermine the confidence in the global capital market thus weakening the major banks in the world that give substantial amounts of funds.
Global poverty thus brings together poor and rich nations as the economic security of the rich nations depends on the loan repayment capacity of the funds given out. Global poverty reduction therefore promotes world economic developments in various ways .To start with, it ensures capital, technology and infrastructure developments around the world.
This is because its reduction enhances long run economic prosperity and improved productivity of every citizen in a country. This enables different nations to shift their national expenditure to other sectors that provide essential services to citizens such as health, education and communication within their nations.
In addition global poverty reduction ensures economic development through creation of good institutions that uphold the dignity of citizens. This is because poor societies usually suffer from acute corruption within the various sectors of their economy. Efficient and corrupt free institutions in a country such as the judiciary and the police force would ensure enforcement of laws that encourage long term investments among the citizens and states around the world.
As a result, countries capable of acquiring loans from the lending institutions such as the World Bank and the International Monetary Fund would ensure the funds are put into proper use, Pauly& Steven (2005). Similarly, the funds will not be diverted to private individuals who use them for personal benefits and prosperity or even diversion of the funds to oversee banks by the political elites in the less developed countries.
Reduction of global poverty enables world leaders to concentrate on national development activities at the expense of capitalism ideologies that create different worlds in the same country, Saps ford &John-ren (2005). Also, global poverty reduction improves global economy through improved health standards among citizens in different countries in the world.
This is because, nutritive diets and improved health facilities lowers the mortality rates among children and adults. As a result, the world economy gets healthy individuals that provide labor to the companies and other sectors producing goods and services traded in the global market resulting to prosperity in the global economy.
Similarly, better health care enables young people to achieve the best education and training tailored towards world economic developments. This provides the economy with the required man power able to carry out the activities meant to provide global economic stimulus in different nations.
In addition, global poverty leads environmental degradation. This is various economies depend on favorable environmental conditions for economic developments. Increased global poverty leads to destruction of vegetation cover that provides resources for economic growth.
This is because poor citizens practice deforestation and selling the wood products to the developed countries leading to global warming and reduction of water quality. Similarly, global poverty reduction creates a dept free society in which all countries are economically independent, Saps ford & John-ren (2005).
Since majority of the less developed countries depend on financial assistance from world financial institutions and the rich countries, economic independence in these countries ensures global economic development and a society free from dept conviction. The global economy would therefore channel the funds to other sectors as health, security and education which are the main pillars of development in any country and around the world.
Conclusion
Resistance to global poverty positively affects the global economic and political developments. This is because, poverty among nations lead to insecurity and even lack of accountability in various responsibilities undertaken by citizens.
Insecurity among nations due to factors such as terrorism hinders economic developments since terrorists would destroy what is already produced for the nation. As a result these nations are forced to spend much of the national income on security at the expense of other services that are of national interest.
Reference List
Pauly, Louis& Bernstein, Steven (2005) Global liberalism and political order: toward a new grand compromise. New Jersey, SUNY Press.
Saps ford, David &Chen, John-ren (2005) Global development and poverty reduction: the challenge for international institutions. New York, Edward Elgar publishers.
The World Bank et al. (2000, July). “Global poverty report.” G8, Okinawa Summit. [On-line] Available: http://www.worldbank.org/