Factors Leading to the Increase in the Gap Between Rich and Poor Nations Due to Globalization
FACTORS LEADING TO THE INCREASE IN THE GAP BETWEEN RICH AND POOR NATIONS DUE TO GLOBALIZATION
INTERNATIONAL INEQUALITY
Inequality must be defined and be able to be measured so that comparisons can be made between rich and poor countries. Once the causes are determined, the effects of globalization can be evaluated and be measured. The World Bank defines inequality as the disparity of income and standard of living among nations and their citizens (Birdsall, 2002)
The income gap that exists between the rich and poor countries has become substantial. In 2003, the richest fifth of the world’s population received 85% of the total world income, while poorest fifth received just 1.4% of the global income (infoplease, 2005).When the GDP is compared between the richest and the poorest nations over the past century, a wider income gap can be seen growing and this therefore means that income inequality has increased and continued widening.
Globalization has become painful, rather than controversial, to the developing world. It has produced increasing global economic interdependence through the growing volume and variety of cross-border flows of finance, investment, goods, and services, and the rapid and widespread diffusion of technology which has led to widening in the gap between the rich and the poor nations. Some of the factors that support this assertion include;
The growing economic interdependence is highly asymmetrical. The benefits of linking and the costs of de-linking are not equally distributed. Industrialized countries - the European Union, Japan, and the United States - are genuinely and highly interdependent in their relations with one another. The developing countries, on the other hand, are largely independent from one another in terms of economic relations, while being highly dependent on industrialized countries. Indeed, globalization creates losers as well as winners, and entails risks as well as opportunities. The losers in this case are the
INTERNATIONAL INEQUALITY
Inequality must be defined and be able to be measured so that comparisons can be made between rich and poor countries. Once the causes are determined, the effects of globalization can be evaluated and be measured. The World Bank defines inequality as the disparity of income and standard of living among nations and their citizens (Birdsall, 2002)
The income gap that exists between the rich and poor countries has become substantial. In 2003, the richest fifth of the world’s population received 85% of the total world income, while poorest fifth received just 1.4% of the global income (infoplease, 2005).When the GDP is compared between the richest and the poorest nations over the past century, a wider income gap can be seen growing and this therefore means that income inequality has increased and continued widening.
Globalization has become painful, rather than controversial, to the developing world. It has produced increasing global economic interdependence through the growing volume and variety of cross-border flows of finance, investment, goods, and services, and the rapid and widespread diffusion of technology which has led to widening in the gap between the rich and the poor nations. Some of the factors that support this assertion include;
The growing economic interdependence is highly asymmetrical. The benefits of linking and the costs of de-linking are not equally distributed. Industrialized countries - the European Union, Japan, and the United States - are genuinely and highly interdependent in their relations with one another. The developing countries, on the other hand, are largely independent from one another in terms of economic relations, while being highly dependent on industrialized countries. Indeed, globalization creates losers as well as winners, and entails risks as well as opportunities. The losers in this case are the