How to Understand the Costs of Global Poverty
Learn about the economic reasons behind poverty creation., Consider how capitalism has benefited the people with the loudest economic voice., Understand the strategic reasons behind global poverty., Realize that there are many key economic and...
Step-by-Step Guide
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Step 1: Learn about the economic reasons behind poverty creation.
Currently, over a billion people live on less than $1 per day.
They are recipients of large amounts of aid, yet so far the international community has been unable to substantially reduce the prevalence of global poverty.
Foreign Policy Magazine describes the world's poor as the largest untapped market on earth.If global poverty is reduced or eliminated, then developed countries can stop receiving aid and and become independent.
People will transition from surviving on handouts into consumers, thus becoming new markets for US companies.
Most of the US top trading partners were once recipients of US foreign aid.
After WWII, the US used large amounts of foreign aid to prop up the European and Asian economies, Japan and Germany in particular.
Today, Japan and Germany are among the U.S's main trading partners. -
Step 2: Consider how capitalism has benefited the people with the loudest economic voice.
Poor people in rural areas of developing countries have little say in affecting how businesses sell their products.
That is why a cure for balding has been more profitable than a cure for malaria.
Bill Gates describes this disparity between the supply and demand for goods in the developing world and the failure of capitalism in a Time Interview (video below).
If the developing world can increase its economic standing, then it stands to produce and consume a large number of new goods and services.
The world's economy stands to increase in size by several billion people.
The developing world contributes very little to the global economy right now.
If global poverty were to be drastically reduced, this would not be the case.
One of the costs of widespread poverty is a global economy that falls very short of its potential. , One of the main reasons behind anti-American sentiment in the global south is the vast economic inequality between the US (and the West) and the developing world.
The National Security Strategy of the Bush Administration noted, "A world where some live in comfort and plenty, while half of the human race lives on less than$2 a day, is neither just nor stable".Impoverished, hopeless people are often easy prey for terrorists organizations, drug cartels and other groups that pose a threat to global security.
Poverty doesn't make people into terrorists, but it does create the conditions of instability that allow terrorists groups to operate freely.
Afghanistan, Sudan, Somalia, North Korea:
Many of the poorest countries on earth are also regions where the United States has national security concerns. "The events of September 11, 2001, taught us that weak states, like Afghanistan, can pose as great a danger to our national interests as strong states.
Poverty does not make poor people into terrorists and murderers.
Yet poverty, weak institutions, and corruption can make weak states vulnerable to terrorist networks and drug cartels within their borders."- Bush 2002 National Security Strategy One aspect of the 2010 US National Security Strategy involves "proactively investing in stronger societies and human welfare" because it "is far more effective and efficient than responding after state collapse"
The opportunity costs that have been lost because of global poverty (i.e. untapped economic potential, poor countries posing security threats) are perhaps the most significant tangible costs of poverty.
The amount that is contributed to foreign aid is minuscule compared to the costs incurred because of the economic and strategic effects of poverty. -
Step 3: Understand the strategic reasons behind global poverty.
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Step 4: Realize that there are many key economic and strategic reasons for the US and the Western world to actively be involved in solving global poverty.
Detailed Guide
Currently, over a billion people live on less than $1 per day.
They are recipients of large amounts of aid, yet so far the international community has been unable to substantially reduce the prevalence of global poverty.
Foreign Policy Magazine describes the world's poor as the largest untapped market on earth.If global poverty is reduced or eliminated, then developed countries can stop receiving aid and and become independent.
People will transition from surviving on handouts into consumers, thus becoming new markets for US companies.
Most of the US top trading partners were once recipients of US foreign aid.
After WWII, the US used large amounts of foreign aid to prop up the European and Asian economies, Japan and Germany in particular.
Today, Japan and Germany are among the U.S's main trading partners.
Poor people in rural areas of developing countries have little say in affecting how businesses sell their products.
That is why a cure for balding has been more profitable than a cure for malaria.
Bill Gates describes this disparity between the supply and demand for goods in the developing world and the failure of capitalism in a Time Interview (video below).
If the developing world can increase its economic standing, then it stands to produce and consume a large number of new goods and services.
The world's economy stands to increase in size by several billion people.
The developing world contributes very little to the global economy right now.
If global poverty were to be drastically reduced, this would not be the case.
One of the costs of widespread poverty is a global economy that falls very short of its potential. , One of the main reasons behind anti-American sentiment in the global south is the vast economic inequality between the US (and the West) and the developing world.
The National Security Strategy of the Bush Administration noted, "A world where some live in comfort and plenty, while half of the human race lives on less than$2 a day, is neither just nor stable".Impoverished, hopeless people are often easy prey for terrorists organizations, drug cartels and other groups that pose a threat to global security.
Poverty doesn't make people into terrorists, but it does create the conditions of instability that allow terrorists groups to operate freely.
Afghanistan, Sudan, Somalia, North Korea:
Many of the poorest countries on earth are also regions where the United States has national security concerns. "The events of September 11, 2001, taught us that weak states, like Afghanistan, can pose as great a danger to our national interests as strong states.
Poverty does not make poor people into terrorists and murderers.
Yet poverty, weak institutions, and corruption can make weak states vulnerable to terrorist networks and drug cartels within their borders."- Bush 2002 National Security Strategy One aspect of the 2010 US National Security Strategy involves "proactively investing in stronger societies and human welfare" because it "is far more effective and efficient than responding after state collapse"
The opportunity costs that have been lost because of global poverty (i.e. untapped economic potential, poor countries posing security threats) are perhaps the most significant tangible costs of poverty.
The amount that is contributed to foreign aid is minuscule compared to the costs incurred because of the economic and strategic effects of poverty.
About the Author
James Gordon
Dedicated to helping readers learn new skills in pet care and beyond.
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