Introduction
Poverty reduction in poor countries, African, Central American and Asian, has been an international discussion for recent past by the developed countries, International Monetary Fund, United Nations and the World Bank. Although the agencies have developed various strategies to alleviate poverty in the developing countries, poverty still dominates the lives of many citizens in these countries.
In fact, poverty continues to grow in most of the developing countries, that is, poor countries are becoming poorer. Analysts attribute the trend to the political situations in of these countries. Economists however, impute the poverty growth to poor approach of alleviating the poverty.
Politicians blame the developed countries for trade barriers whereas human activists accuse the governments of the poor countries for the poverty growth. In spite of the growing attention into the subject, poverty threatens majority of the communities and societies in the developing countries, particularly in Africa. Stakeholders involved, should develop a different approach for successful reduction of poverty in these countries.
The evidence from the current and past attempts to reduce poverty is that, poverty reduction cannot occur on a local scale. For it to be meaningful, poverty reduction must be broader in scope; it must include changing the whole society. The essay discusses job creation and trade as the initiatives of poverty reduction.
Poverty Reduction
Poverty reduction requires creation of permanent jobs. Unemployment characterizes the economy of poor countries. Currently, more than 4 million people are unemployed in Egypt (Essoyan 2007, p. 1). Unemployment deprives people their dignified livelihood. The unemployed in the society are incapable to satisfy their basic needs. As a result, such people become a burden on their societies.
Unemployment results into insecurity and may even lead to violence. These factors have adverse effects to the economies of a country. The role of job creation lies on the local governments and the international agencies such as UN, World Bank and IMF (World Bank 1997, p. 45). Creation of permanent jobs reduces poverty in two ways.
First, employment improves the standard of living of a society and second, employment enhances development of a country. This development may be in terms of infrastructure growth, innovation and technological advancement. Employment enables people to cater for their health and education. In effect, the poverty in these regions will reduce.
Trade plays a very crucial role in poverty reduction and development. Trade creates opportunities for employment and individual development of the population. Trade enhancement, particularly the international trade, results into exports of goods in the developing countries. Exports in turn, increase the income of a country. Subsequently, the countries can cater for their development needs.
Trade encourages industrial growth, which is instrumental in poverty alleviation. However, for effective trade, governments in the poor countries should encourage free trade by removal of barriers in their policies (Minot, Abdelbasset, Thomas, Dewina, & Orden 2009, p. 100). This further enhances import into the poor markets; it reduces poverty in two ways.
First, importation avails low-priced goods to the local market and improves the living standards of people; and second, increase in firms in the local market creates more job opportunities for the local population. On the other hand, developed countries should liberalize their markets for agricultural products such as cotton and the so-called ‘labour-intensive’ products.
This strategy will enhance exports by the poor countries to the developed market. Although, most African and Asian countries with access to these markets have not succeeded in poverty reduction, trade presents immeasurable potential for development. Birdsall et al (2005) comparison between Vietnam and Nicaragua revealed that trade liberalization does not guarantee development (p. 139).
Despite obstacles to U.S market, Vietnam continues to experience agrarian expansion and industrial growth whereas, Nicaragua’s economic expansion is too insignificant despite being a member of WTO. Contrary to these findings, Economists attribute South Africa’s economic growth to export of gold and other agricultural products.
By developing viable strategies in the international trading, poor countries can derive significant benefits for development of their economies. Economic development results into low levels of unemployment and hence reduces poverty.
Trade and job creation are directly interrelated; trade creates job opportunities through investment whereas unemployment enhances trade. For effective alleviation of poverty, the governments of the poorest countries should address these initiatives at macro rather than micro levels.
The micro level perspective for job creation involves direct creation of industries and firms to absorb the human resource while in trade it involves elimination of trade barriers within the economy. Experience from Nicaragua and other African countries however reveal that trade liberalization does not guarantee poverty alleviation.
Based on such lessons, the governments of the developing countries should focus on changing the whole society (macro level) for effective enactment of these initiatives. This involves streamlining governance, investment in health care for all, focusing on culture change, reduction in illiteracy, addressing gender disparities, strengthening security, empowerment of the minority groups and embracing globalization.
In fact, these factors cut across all dimensions of society, that is, economic, political and social. In the following discussion, the paper explores these dimensions and illustrates how, by addressing, they would effectively enhance trade and creation of permanent jobs.
The dimensions (macro level address)
These governments should address their governance. Job creation cannot be effective if the local government does not initiate related projects. Micro level solution to unemployment involves creation of such projects. However, within poor governance initiation of such projects would amount to no value. Corruption and misappropriation of public funds characterize poverty-stricken economies.
Therefore addressing job creation at this micro level would not alleviate poverty since the corrupt officials would misappropriate the project funds (Green 2008, p.102). On the other hand, macro level tackling of unemployment involves streamlining the governance of the society to ensure that transparency within the public systems of management ensues.
Transparency in turn creates environment conducive for initiation of job creation projects. Before deploying micro level strategies for job creation, the governments should first streamline its governance (macro level strategy) to enhance successful management of the project. Micro level strategies of tackling trade involve developing policies to enhance free and fair trade within the poor economies.
However, these strategies cannot tackle trade effectively. Macro level tackling involves imposing ethics among the trade officers to ensure such policies operate effectively. Public ethics are possible through enhancement of good governance within the systems of the government.
Addressing governance (macro level strategy) of these economies would generally create good environment for trade and development of job creation projects thereby alleviating poverty in these countries.
Trade and job creation depends on health of a society. Micro level tackling of unemployment involves availing resources and opportunities to the people. However, the strategy may not be effective to tackle the initiative if the government does not address the health of the population first.
It is impossible to create jobs to unhealthy people. Poor health populations characterize the African war-torn countries such as Libya, Morocco and Tunisia. Economists attribute poverty in such areas to poor health. In order to create jobs and hence alleviate poverty, these governments should tackle the initiative at macro level by enhancing the health of its population.
Similarly, developing free trading policies within an economy without addressing the health of the people cannot enhance trade for poverty alleviation. Economies with few people engaged in production results into slow or stagnant growth, therefore increasing poverty (Sabry 2005, p. 35). Local governments should invest in health of their population.
First, the governments should construct public health centres from which people can access free and quality health care. Secondly, the government should develop health insurance policies, as it is in industrialized countries, for every working citizen regardless of their social status, the children and the minority groups.
Thirdly, the government should build public training centres for public health care and finally, there should be efficient and novel strategies to monitor the public health. Simply the population should have access to cheap and quality health care. By doing so, these countries will eradicate the most common diseases and enhance health of their people. The effect of healthy population to an economy is two-fold.
First, there will be little finances spend on treating the most common diseases; the people will spend these finances in trade and therefore create job opportunities. Secondly, people will spend their time in economic production (trade), resulting into expansion of the industries and in turn create more job opportunities.
Macro level tackling of both unemployment and trade requires investment in the health of the people to enhance their activity as far as trading and job activities are concerned. It is worth noting here that micro level tackling of these initiatives becomes effective only after the macro level strategies.
The poor culture of reluctance to adopt novel technologies is major impedance to job creation and development of trade. Micro level tackling of unemployment involves creation of industries to absorb the high number of the unemployed citizens while macro level tackling of the initiative involves adoption of new technologies first.
The governments should first change the culture of traditional industrial methods and enhance novel technologies in order to create permanent jobs for their people. Micro level address of trade involves presenting the trading opportunities to the population whereas macro level tackling calls for individual innovation and creation of businesses.
The governments should emphasize on innovation and technology among their people to enhance novel and competitive business ideas. Economists observe that developing countries are reluctant to adopt technology since most of the industrial processes in African countries still deploy the ‘traditional methods’ to carry out their operations.
With such low- tech methods, these businesses may not be able to expand their industries to create employment for the ever-growing population. They may not also compete with the businesses in the developed countries within the international market. There is need for the change of the culture in these countries to reinvigorate the practice of innovation and invention and unleash the investment potential of these countries.
By doing so, these countries will be able to produce enough for their populations, therefore improving their standards of living and promoting trade through the surplus. Furthermore, adoption of high technologies in industries will also enhance human development in these countries and hence boost their innovative capabilities for effective production in their industries and businesses.
Innovation and invention will also encourage the growth of industries in poorest countries. Industrialization creates jobs, which are permanent solutions to poverty reduction.
For effective realization of this condition however, the developed countries should deploy the macro level approach: provide skills, through training and education, to the human resources in African countries to empower them for the changing technologies (Peters 2009, p. 32). By doing so, these countries will pave way for immediate solutions to trade and unemployment.
Gender discrimination among the Islamic countries of Africa and Asia impedes with the process of job creation and trade. It is not enough for the governments to avail job and trading activities to its people without necessarily tackling the current gender disparities within their economies.
Macro level tackling of trade and unemployment involves addressing gender issues. Since it requires the effort of every person within a society for perpetual expansion of industries and trade, this strategy would provide a permanent solution to trade and unemployment.
In the mentioned countries, the legislation excludes women and girls from the development plans. Women and girls in strict Muslim world such as Iran do not work, leaving very small population, of men, to work. They do not own property (Bush 2005, p. 45). As a result, most women and girls are poor. Furthermore, the economic growth in these countries is also low, since few people, men, are involved in development.
To develop industries and trade for poverty eradication in these countries the governments should involve women and girls in development. By tackling gender issues, more people will work and therefore exploit fully the opportunities provided by the government.
Women possess various capabilities and prove to be the best business administrators in the developed countries. Addressing gender discrimination requires legislative reforms to incorporate women and girls into the development strategies such as trade and job creation.
Illiteracy is another major limitation to growth of trade and creation of jobs. Although the world literacy has grown in the 21st century, most African countries still record high illiteracy levels; more than 27% of these populations are illiterate.
Macro level tackling of trade involves providing the people with the appropriate skills first. As a result, majority of the population will have practical market skills to drive the trading activities of the country. Therefore, before deploying the micro level strategies such as elimination of trade barriers to enhance free trade, the government should first focus on educating its population.
Macro level tackling of job creation also involves promoting education to equip people will employment skills. Uneducated people lack skills for employment, especially in the current world of specialization and technology. In addition, the uneducated do not have appropriate skills to develop strategies for trade and development.
Birdsall, Rodrik and Subramanian (2005) noted, “Vietnam has reduced poverty dramatically and enjoyed steady economic growth” due to high levels of education among its population (p. 137). Birdsall et al (2005) further asserts that the continued dependence of poor countries to the financial support of the developed countries does not provide solution to poverty (p. 137).
Education empowers the citizens with skills relevant to their economic development, particularly employment skills. The governments of the poor economies should first invest in education in order to enhance trade and subsequently create more job and trading opportunities. Education serves as a permanent and sustainable means to poverty eradication (Salem & Gleason 2005, p. 15).
By educating their populations, these economies will have enough and skilled human capital to pioneer and supervise projects for job creation and hence economic development. Education increases employment and therefore reduces poverty.
The troubles in Middle East are results of high number of uneducated youth. Instead of using military attack, the U.S and Western countries should invest in education to provide them with employment and trading skills, consequently reducing poverty in those regions. Therefore, poor countries should first reduce illiteracy levels to insignificant values in order to enhance trade and creation of permanent jobs.
Insecurity characterizes most of the developing and poor nations in Africa and Asia. Addressing insecurity is a macro level tackling of trade. Politically instigated violence is an extreme effect of insecurity in these countries (Bush 2007, p. 1604). In violent-stricken countries, trading activities are low and ineffective. In order to enhance trade, the poor countries should enhance in security.
Since violence caused by instable bad politics is the major cause for insecurity in the poor economies, these countries need constitutional reforms. These constitutional reforms would provide effective political policies to ensure cases of power contention do not arise after elections as witnessed in Ivory Coast and other parts of Africa. In turn there would be reduction in violence and therefore encourage investors thus trade growth.
Addressing insecurity will result into creation of jobs. These countries should empower their militaries through training to enhance security and therefore create a working nation rather than a ‘fighting nation’.
The U.S training services, for instance, to the Egyptian police is important for future stability of that nation. Developing countries should address issues of security to their population in order to protect lives and properties, enhance trade, and create jobs, therefore reducing poverty.
To effect job creation and trade, the poor countries should focus on empowering minority groups in the society. These groups include women and the youth. Majority of the unemployed people in Africa, are women and the young people aged below 35 years. Surprisingly, they form about 60% of the populations.
First, these governments should provide education and training to these groups of people to equip them with skills for employment and trade. Secondly, policy makers should develop laws, which favour their development. The laws should reduce the barriers to SMES and trade in general.
As a result, most of the people will engage in trade and hence create jobs for the population. By empowering these groups, the poverty levels will lower with more than 89%. The governments should therefore empower these groups with trade and employment skills. Subsequently there will be poverty reduction in these countries.
Trade growth and job creation in the 21st century depends strongly on globalization. Unfortunately, African countries oppose it despite lessons from East Asia. According to Wade (2004), “Over the past 20 years or so India, China and the rest of East Asia, experienced economic growth and falls in poverty rate” (p. 1).
To enhance globalization, the African leaders should first embrace it and then develop policies to encourage importation and exportation. This will enhance trading activities in these countries. Secondly, the poor governments should provide their population with high-tech employment skills to enhance export of human capital. As a result, there will be reduction in unemployment.
It also requires extensive leadership transformation in the African countries for globalization to take effect in those countries. The leadership should compose of highly innovative and liberal individuals. It requires broad overhaul of the government systems to transform the leadership. Constitutional reforms are generally essential for leadership transformation.
These governments should also enhance their governance to effective leadership transformation. The rise in economic integration among countries through international trade, information flow and interaction is the major cause of poverty reductions in these regions. Therefore, to emulate East Asia, African countries should enhance international trade through trade liberalization.
By opening its market, through liberalization, China’s innovation and production has greatly increased since 1990. The interaction with the developed countries through international trade provided China with insights into technology of production. Today, China is one of fast growing economies in the world. Globalization has resulted into employment, innovation and subsequently industrialization.
China has therefore reduced its poverty to insignificant levels, yet poorest countries are rigid to embrace globalization. With the China’s example, these countries can reduce their poverty levels. As it is for China’s case, Globalization will enhance industrialization, trade and create more jobs leading to poverty reduction.
The leadership of the African countries should embrace globalization for expansion of trade and hence creation of jobs. Consequently, there will be considerable poverty reduction.
Conclusion
As the discussion evidences, poverty reduction involves changing the whole society. To reduce poverty, the developing and poor countries should focus on all aspects/or dimensions of the society: economic, political and social. Job creation improves the livelihood of people and therefore reducing poverty. Creation of more job opportunities in an economy translates to vigorous economic development.
Trade enhances export of agricultural products from the poor African countries to the developed countries. It increases the income of a country reducing its dependability on aid and borrowing from international agencies and developed countries. Reduction in debt reduces poverty in these nations. The international agencies and developed countries should offer support for creation of permanent jobs in these economies.
To encourage trade and creation of jobs, the leadership of the developing countries should broadly address issues on education, health, governance, gender equality, globalization and empowerment of the minority groups. Education equips individuals with skills for employment, trading and problem solving.
Healthy population composes of active citizens in the development of the economy. These governments should provide access to free and quality health care to their people. Unhealthy individuals are liability to the public and particularly to their families.
In order to increase economic growth of these countries and reduce poverty, the governments in conjunction with international financiers should strive to eradicate the most common diseases in their populations. Poor governance encourages corruption, which is the major impedance to trade growth and job creation. Corruption enhances misappropriations of finances, both aid and public, aimed at job creation.
To enhance effective enactment of these projects, the policy makers in these governments should therefore formulate policies for good governance and financial management within the public offices. Other approaches for poverty reduction include end in gender discrimination, enhancing globalization, changes in culture and empowerment of the minority groups.
As the preceding discussion depicts the success of the trade and employment for poverty reductions are depended on both micro level and macro level strategies.
However, the discussion has evidenced that these governments should first deploy the macro level strategies since the micro level tackling of the poverty reduction initiatives depend on macro level strategies. It is therefore justifiable that the poor countries should tackle poverty reduction in a broader scope.
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