Question

According to the World Bank and International Monetary Fund (IMF), over one billion people in the world today are caught in the poverty trap. Identify key economic, social, or political reasons why some people within the developing world live on $1 a day. Next, determine at least three (3) possible economic, social, or political steps that developing countries overall can take to extricate their poor citizens from this dilemma.

Answer 1

Solution:

Inequality is often discussed in the context of relative poverty, as opposed to absolute poverty.That is, even in the wealthiest countries, the poor may not be in absolute poverty (the most basic of provisions may be obtainable for many) or their level of poverty may be a lot higher than those in developing countries, but in terms of their standing in society, their relative poverty can also have serious consequences such as deteriorating social cohesion, increasing crime and violence, and poorer health.

Economic reasons include,

1. Unemployment, 2. Scarcity of resources, 3. Skill exploitation, 4. Market situation, 5. Inflation, etc.,

Social reasons include,

1. Cultural differences, 2. Skill gaps, 3. Population, etc.,

Political reasons include,

1. Inequality in income distribution, 2. Government policies, including expansion and contraction policies 3. Welfare programs

Preventive Steps:

1. Globalization 2. Skill development 3. Promoting education 4. Welfare programs 5. Government policies to improve economic situation 6. Creating more employment 7. Attaining balance in income distribution with good tax policies