Poverty In Latin America

Latin America has the worst distribution of wealth in the world. The gap between rich and poor is one of the biggest, and much higher than it is in the industrialized countries or the regions of the Third World. The continent has an unclear privilege of rich people with a society in extreme poverty conditions, while in some countries the proportion of poor has stabilized, the absolute number has been growing every year. Because of corruption in the political states, lack of social interest in the population, and the negative effect of the globalization to small local businesses the distribution of wealth is uneven in Latin America.
Economies that are affected by a high level of corruption, which involves the abuse of power, are not capable
of prospering as fully as those with a low level of corruption. According to the World Bank, the average income in countries with a high level of corruption is about a third of the counties with a low level of corruption. Studies show that countries such as Mexico, Venezuela, and Brazil are some of the emerging market economies that have a much higher level of corruption than developed countries. Some of the negative effects that countries show as the level of corruption increases can be high prices and low quality of products and services, because of the way deals are made, those business owners who can use their connections or money to bribe government officials to manipulate market policies to ensure that they are the sole provider of goods or services in the market, or some economic operations are carried out leading to monopolies in the economy. Because of most of the country’s capital is collected in the hands of persons who back corrupted public officials, most of the created wealth also flows to the mentioned individuals.
Current rates of global poverty indicate that more and more people have become poor around the planet, but also many countries such as Latin American governments say that the economy in the countries is growing, both of the statements are true, what really happens is that the economy is growing but remains in the hands of politicians and businessmen, the most corrupt.
In the past, high advantage of natural resources and Latin American poverty was explained to be because of geographical and social issues. Latin Americans were consider to be lazy, because of the high availability of resources in the tropics, leading people to easily find food and elaborate strong housing or clothing, they had no need to work as hard as some other countries in the dessert do; Now, although the lack of education and corruption creates the distribution to be unequal, it is also the conformist citizen that is not working hard to change things since most of them are satisfied with what the state has gave to them. Some citizens lend themselves to corruption for wanting to have more things in the easily possible way and many only think about their welfare without thinking of a common welfare. The main reason of poverty lies in the mentality of the people, a conformist and selfless society, although is rich in environment and the economy is growing, will always be condemned to live in deplorable poverty, a conformist society is the one that will allow the rise of injustice and corruption that will
lead to the wrong distribution of wealth to the people.
Globalization is generally defined as the free transfer or movement of goods, services and capital across borders around the world, according to Fenstra and Hanson, it has been accompanied by an increasing rate in inequality terms of income distribution causing increase in income levels between individuals in various regions. According to Art de Geus, the per-capita gross domestic product gap between Germany and fast-growing China, for example, had widened over the period, rising from 20,879 euros in 1990 to 25,630 euros in 2011, making clear that globalization tends to widen the gap between rich and poor. Globalization is all about the new risks and uncertainties brought about by the high degree of integration of domestic and local markets, because of this there is an intensification of competition where the local businesses price and profit swings and tend business and product destruction. Small businesses in Latin America often close because they are targeted by multinational corporations that can offer the same product for less money, purchasing from big corporations instead of local is making the county’s economy to decrease since the profit is going to the country from where the corporation is coming from. These local businesses can’t compete against them forcing them to go out of business creating a society relatively poor.
It is true that there is a bad distribution of wealth in Latin America, but several studies have tried to link corruption and institutional quality.
Most get to the conclusion that there is a non-linear relationship between corruption and economic growth, according to Heckelman and Powell. While political institutions are important, corruption is the quality of economic institutions, if economic freedom is low, corruption is more likely to aid in the growth of the economy. We cannot deny that the conformist society is making the economy go decrease, the people is not willing to work to create more jobs can activate the economy of the region, they prefer to just sit and watch television instead of demand to the government to start doing their job. However, globalization it does not have anything to do with the bad distribution of the wealth, because of globalization it is easier to rise credit and leverage as money flows easily across local and national boundaries. Setting the world economy into a virtuous cycle of income and employment growth for the
country.
The World Bank’s research team drew data from 20 countries based on household surveys, the team found that the unequal distribution of economic sources, sociological and political science inequality was found in Latin America. The problem of maldistribution of wealth in Latin America is being discussed and analyzed in academic centers, citizen organizations, government and unions, where they have encountered that it is because of corruption in the political states, lack of social interest in the population, and the negative effect of the globalization to small local businesses. Most countries with emerging economies will be facing these three important factors that will not allow the economic growth and/or distribution of wealth to be equitable, until these factors are being reduced by local governments the entire society is affected as a result of the inefficient allocation of resources, the presence of a shadow economy, and low-quality education and healthcare.