Essay Sample on Poverty and Trade

Published: 2021-06-30
1833 words
7 pages
16 min to read
Middlebury College
Type of paper: 
This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Poverty has become the most crucial plaque in most developing countries. However, this can be solved through accelerating the economic growth of the people living on less than 1 dollar in a day by opening up their market. The International political economy (IPE), the Global Political Economy (GPE) which is a political science based academic discipline that focuses on the analysis of economics and international relations. Since its diversified, it creates a proper opportunity for trade to occur as well as opening up new markets through political forces, institutions, and individual actors. International trade contributes majorly to poverty through the different challenges that they have to undergo for the trade to be successful. Duties and tariffs imposed on the exports make it difficult for most developing countries to export their products. Also in most of these developing countries, they have limited products for export due to lack of proper exploration of their options or even sometimes ignorance. Also instead of utilizing the official developments in these developing countries most of the international traders opt to hire their own thus denying the locals such an employment opportunity. The diversification brought about by the international trade creates conflict with the trading countries either through the standards of the products produced or even poor payments.

Causes of Global Poverty

Poverty is the condition for most of the worlds populace and countries. An important question that one may ask is whether it is warranted to blame the people leaving under the poverty line for their crisis. Have they been doing nothing, made poor choices and independently responsible for their status? In most cases personal contributions towards poverty may necessarily not due to someone will but due to some circumstances that the find themselves into. Sometimes its inevitable but other times it beyond self-control. However, if it's due to ignorance and poor decisions, then such kind of poverty one can only blame himself.

Does the government have a hand in it? Have legislators enacted policies that hamper progressive advancement? Such issues concerning poverty exist, but further, more common problems result to poverty (Ferrarini et al. 23). Beneath the increased rate of international connection guaranteed by globalization is worldwide decisions, practices, and policies. The issues interfere, controlled and formulated by the high class and mighty in the society. According to Ferrarini et al. (25), in the wake of such gigantic outside influence, the government of developing nations and its citizens often lack authority. As a result, only a few people get wealthy while the larger populace sinks in poverty.

Facts and Statistics about Poverty

Poverty status is assigned to individuals that do not meet certain threshold degree set by the Health and Human Service Department. In 2015, 43.1 million people lived in poverty in the United States. Other countries around the world experience a more severe rate of poverty than the United States. A majority of the countries are developing countries. Roy and Emma (5) indicate that nearly 3 billion people live below the poverty line of 2.50 dollars a day. A UNICEF report indicates a billion children globally currently living in poverty, and about 22,000 children die annually as a result of poverty (Roy & Emma 7). 805 million people globally do not have enough food to eat. Over 750 million individuals do not have access to clean water, and sanitation has claimed the lives of over 842 million people in 2015 which is an approximate of 2500 people daily. In 2014, 164 million children under the age of 5 suffered a reduced rate of growth and development due to chronic malnutrition (Roy & Emma 7).Thus this paper will discuss the causes of global poverty and assess whether trade contributes to poverty.

Most of the population stays on a few dollars a day. Walker (216) urges that whether a person lives in the wealthiest nation like the United States of the poorest, there is always a level of inequity. Apart from lacking food, the people have minimal access to health, schools and other fundamental services. Issues of malnutrition and spread of diseases afflict the lower class individuals. They are marginalized from the larger community and have less or no representation in the public and political talks, making it even impossible for them to leave the cocoon of poverty. By default, the wealthier a person is, the better chance the person stands to benefit from economic or political laws. The amount the world uses on the military, financial crisis and other sectors that help the wealthy, compared to the amount spent in addressing the issues of poverty and close crisis are often changing. The primary causes of global poverty include:

Structural Adjustments

The decrease in health, schooling and other fundamental social-related services globally have risen from changes in structural codes that are stated by the world monetary fund (IMF) and the World Bank as situations for borrowing and payment. Besides, third world countries are needed to open their economies to struggle with the developed and established nations (Walker 221). As a way of attracting investments, developing countries enter a swirling race to uncover who can offer reduced levels, wages, and affordable sources thus raising poverty and inequity for most individuals as it forms the backbone to what is called globalization.

Global Nature

Poverty has always been there around the world both in poor and wealthy countries. In a majority of States, the gap between the reach and the have-nots that result from inequity continue to expand. Some causes of poverty include bad government, policy, and lack of responsibility by people and firms with authority and a collection of all the factors. Some theorists ascribed to social inequity suggests that high level of injustice affects social cohesion and lead to increased rates of crime and violence. Inequity has been used to measure relative poverty (Walker 222). However, absolute poverty is also an issue as World Bank report on poverty indicates a significant number of individuals lives in poverty than it has always been perceived. For instance, new poverty line of life below 1.25 dollars a day revealed that 1.4 billion people live below the poverty threshold. Moreover, as earlier indicated, almost half the world populations are poor.

Poor Strategies in Alleviating Poverty

Long-term prevention of hunger is based on the ending of poverty, as poverty is the leading cause of famine. When there is a crisis of hunger worldwide, it means that the world is suffering from poverty. However, the global effort of alleviating hunger is often focused on giving food, improving food producing or distribution. It leaves the root causes of starvation, poverty, and dependency unresolved, While energies and resources are applied to reduce hunger through technical measures like the advancement of agriculture and as essential the issues are, linked issues like poverty indicate that political actions and sustainable hunger alleviation are likely required (Walker 230).


It is synonymous with everyone to hear that leaders from wealthy countries are telling the developing ones that aid and loans can only be given in situations where there is prove that there is no corruption. While they are right, developed countries are the major participants of all forms of bribery in the emerging economies, and a majority of economic legislations they enacted exacerbate the issue further. Corruption, therefore, has become the priority especially in the wake of the worldwide financial crisis thus making the poverty problem more extreme.

Undermining Democracy through Tax Evasion and have not

Through havens of taxation, pricing movement, and other policies, billion dollars of taxes are evaded each year globally. The much wanted money aids in developing essential social services aimed at alleviating suffering in populations. As the global finance crisis continue to affect many countries, tackling tax avoidance would help avoid important austerity strategies that hit developing countries so hard (Bhalla&Frederic 56).

Trade Reduces Poverty

Trade is said to work fewer than three primary levels to improve a nations development and alleviate poverty. Appropriate policies encourage trade widening in general. It helps in generating money and offered a base for resources advancement. Secondly, governments can promote exports solely in departments that maximize jobs and revenues (Bhagwati et al. 180). And lastly, trade can help the lower class individuals, those who hardly involve themselves in the formal economy to be more active and participate in exporting of goods and services. However, it should be noted that the basic level may have challenges for the developing countries. In many countries, the issue is always at the top. Legislators who prepare growth strategies do not often focus on integrating trade into their strategy. Le Goff et al. (6) says while a lot of rhetoric concerning how trade acts as a steering for development and development, policies still stand in the way, instead of promoting, business in many third world countries. Besides, few blueprints are available to show countries on how to minimize poverty through trade. Additionally, the export sector that could help in reducing poverty is not always included in national export plans (Bhagwati et al. 180). The eradicate poverty; it is a pattern of development enhanced through trade that is of importance. Therefore, it is necessary for growth to take place in sectors that small producers can be included in the value chain of products and services. Low-income families do not always possess the necessary skills for a business that helps in breaking into the world trade. When it comes to a situation where a person needs to size a great business deal, the lower class individuals may suffer the adverse impact of little or no education. Lack of corporate training and links with people who can help them start or widen their business in the formal economy (Bhagwati et al. 180).

However, all is not lost; there is still something that developing countries can do to benefit from trade. A state may decide to promote a reduced export sector. It could be done by pointing out and promoting sectors with a real export potential to which producer from the lower class can bring their productive capacities. Governments may also decide to target the poor communities for export aids. That is, facilitating business groupings between individuals leaving below the poverty lie to overcome the emancipations of acting alone. Besides, encouraging matchmaking between longtime exporters and poor societies can go a long way in making this possible (Le Goff et al. 8).


Poverty is currently among the issues that the global community is trying to solve. The 2005 UN World Summit in 2005 reviewed the progress of the Millennium development goals and indicated that the progress was slow. In 2015, the same report noted little progress (Le Goff et al. 10). Globalization has largely contributed to the issue of poverty through corruption and conditions that hamper the efforts of developing countries from alleviating poverty. However, through promoting of trade with appropriate strategies, governments can introduce export-led poverty reduction programs that will help in integrating the lower class communities in the exportation of their products and services (Le Goff et al. 13). Information technology can also be utilized especially now that many businesses are embracing it. The use of reliable analytical equipment to point out sectors with demand is a significant step towards alleviating poverty.

Works cited

Bhagwati, Jagdish, and ThirukodikavalNilakanta Sri...

Request Removal

If you are the original author of this essay and no longer wish to have it published on the website, please click below to request its removal: