Trade and Income Inequality - 693 Words

As trade takes place, living conditions and economic growth must be the ultimate goal. Trade and economic growth that does not establish a reduction in poverty can generate problems that did not exist before. If rapid growth is accomplished at the expense of misdistribution of resources, then it will create social tensions or class warfare. Rapid growth has been shown in different countries that raises gap of income inequality and raise the poverty rate. In India, the slow economic growth has been steady for a period of time until 1991 when the trade and investment liberalization and economic reforms signed. It was a major breakthrough that resulted in rapid economic growth in India. The liberalization in India is far different than the standard process of liberalization. India was mainly focusing on the slow and controlled process of liberalization. Aside from the loan received from IMF in 1991, foreign bilateral and multilateral public capital inflows have been restricted. Since In dia used the slow process of liberalization of trade, then the inequality also has risen at slower pace especially in rural India unlike urban areas that have seen much faster pace. Different factors have been blamed for rising income inequality. First, the process of shifting earnings from labors to capital income. Second, the fast pace growth in the services sector. Third, the rate of the labor absorption has seen a significant drop during the reform period of 1991 (Jha, 2002). After 1991,Show MoreRelatedThe Income Inequality Gap Essay1123 Words   |  5 Pagesstudies have shown that income inequality has many connections that have caused the gap in the United States. According to the research I found, income inequality is connected to corruption, trade, wages of workers, and education. The world income inequality had declined since the twentieth century according to the studies found (Clark). 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In economy each nation sets policy to manage its resources to maximize the benefits of trade for its people.Read MoreImpact Of Trade Liberalization On African Countries Essay1627 Words   |  7 PagesThe scholarship examining the extent at which trade liberalization (henceforth refers to as economic globalization) impacts poverty levels is limited. This essay examines the relationships between economic globalization and poverty levels in African countries. For instance, a 2006 UNDP report illustrates that just 7.2 percent of Bayelsa and Rivers State (Nigeria) residents were poor in 1980, but in 2004, the poverty index figures rose exponentially to 44.3 percent; Nigeria’s national rural povertyRead MoreGlobalization743 Words   |  3 Pagesof international trade and economic growth. There might be various parameters for the measurement of the connection between globalization, international trade and economic growth that is derived from the mobility of investment, human capita l to communication and transportation that fosters interdependency and other forms of economically beneficial and social relationship between countries. In economy each nation sets policy to manage its resources to maximize the benefits of trade for its people.Read MoreDeveloping A Economically Developed Countries1649 Words   |  7 Pagesfrom 19% to 23% between 1990 and 2004, in global trade and exports. Their average annual expenditure of GDP is about 1.8%. All of the above nations rank among the top 10 of the world’s most globalized in all aspects including social, financial and political globalization. An article published in the Irish Times, dated 16th February, 2015, reports that the gap between the rich and poor is constantly increasing, with more than a third of the national income condensed in the top 10% of the earners. TheRead MoreRelationship Between Inequality And Economic Growth1370 Words   |  6 Pageseconomy during the economic reforms, which started in 1978 and are still going on until nowadays, China has had continued presence of inequality. In my work I overview the evolution of inequality that could be divided into two historical periods: pre-reform period (1949-1978) and the reform period (1978- onwards). I also examine the correlation between inequality and economic growth in China. Although, with the sustained economic development and increase of living standards for the last three decadesRead MoreImpact Of Globalization On Domestic Economies And Social Welfare Essay1518 Words   |  7 Pagesâ€Å"globalization does exert downward pressure on the wages of un derskilled [sic] workers in industrialized countries, exacerbate economic insecurity, call into question accepted social arrangement, and weaken social safety nets.† He claims increases in global trade proportionately increases demand for social insurances, while simultaneously constraining the financial ability of domestic governments to respond to the need. 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