The Causes of Global Poverty and Inequality

Poverty means the shortage of human basic needs such as clothing, food, and shelter, and today it haunts many people across the world and very little has been done or is being done to curb it. It comes about as a result of inequality, which is the gap between the rich and the poor with the latter receiving the most negative effects. In this paper, we shall discuss the causes of poverty and inequality and how they affect the majority of the people in the world, most of them in the developing countries (Haughton, 2009).

Poverty is a very common state that can be found among most of the world’s people and countries. The most common belief on the causes of poverty is that the poor people themselves are to blame because they are either lazy or that they make poor decisions. Furthermore, their governments are also blamed for pursuing policies that actually harm the successful development of their people. There are however more deeper and global causes of poverty which are rarely discussed because their effects are mostly indirect. There are behind the rising connectedness promised by globalization are those decisions, economic policies and practices which are typically influenced or formulated by the rich and powerful. Such people can be the leaders of the very rich countries, or the heads of multinational corporations and institutions and in the face of such great external pressure, the governments of poor countries and their people are often powerless and as a result, a few get wealthy while the majority continue to struggle with or fall into poverty (Clapp, 2010).

The institution of reductions in the expenditure for health, education and other vital social services around the world has resulted from the structural adjustment policies prescribed by the major international financial institutions as conditions for loans and repayment and in addition, the governments of developing countries are required to open up their economies to compete with the more powerful and established nations. In order to attract foreign investment, poor states have entered a race in a bid to see which country can provide lower standards, reduced payment and inexpensive resources and this has increased poverty and inequality for most people in these countries. This system is the basis upon which globalization is founded and as a result, it maintains the historic unequal rules of trade between trading partners (Pogge, 2008).

Around the world, whether in affluent or in impoverished nations, poverty has always been present and currently in most nations, the space linking the affluent and the poor is quite high and is continuing to widen. The causes of inequality are numerous and they include a lack of individual responsibility, bad government policy, exploitation by people and businesses with power and influence, among others and many people feel that the high levels of inequality will affect social cohesion and may lead to problems such as increasing crime and violence (Minkova, 2011).

Food aid, when not given to a country for emergency relief, can actually be very destructive on the financial system of the nation that is receiving this aid and it may contribute to an increase of the hunger and the poverty that will be experienced in the long term. Free subsidized and cheap food that are beneath the market prices at the time undercut farmers who would not be able to compete and would be driven out of their source of livelihood and into the jaws of poverty, further increasing the share of the market for the larger producers in the United States and in Europe (UNRISD, 2010).

We often hear from the leaders of the rich countries telling the governments of poor countries that aid and loans will only be given when they show that they are stamping out corruption, but while that definitely needs to happen, the rich countries themselves are often in the largest forms of corruption in these poor countries and most of the economic policies they prescribe have further increased the problem. The ending of corruption in developing countries should be made a high priority in order to swiftly decrease the poverty and inequality within them (Ahmed, 2007).

Overpopulation has been named as one of the major causes of poverty especially in developing countries. Excessively high population densities put stress on available resources because only a certain number of people can be supported by a given area of land and that number depends on how much food and other resources the land can provide and this can be seen in such densely populated areas as India and in some African countries (Fields, 1980).

Many experts agree that the actions of the colonial powers in their former territories during colonialism is the reason behind much of the unbalanced distribution of resources in the world economy and in many developing countries; the problems of poverty are massively felt by their populations. In the recent times, most of these former colonies have tried to build their economies through the introduction of industry and technology but many of these countries lack the necessary raw materials and the knowledge and skills gained through formal education and training (Allen, 2008). These countries also lack the infrastructure necessary for development such as transportation systems and power generating facilities and because the infrastructure is a necessity for the establishment of industry, these developing countries must heavily rely on trading with the developed countries for processed goods, most of which they cannot or can barely afford. Developed countries continue to practice a form of colonialism known as neocolonialism because the wealth of these countries is established to a large degree on an atmosphere that is conducive for them in trading with the developing countries. They are able to get cheap natural resources from poor counties and these are manufactured by multinational corporations which use low wage workers in their factories and this practice contributes to the dependency of these poor countries while their standards of living are not raised (Perry, 2008).

Some development scholars have identified the colonial history of developing countries as an important creator of the barriers to advancement in poor countries because of a lack of basic infrastructure such as roads and viable means of communication. In many of those countries with a history of colonialism, the colonial powers developed the local economies to facilitate the removal of resources for their own economic growth and development. Even today, this has remained so, with the policies of governments and companies keeping people poor because these policies ensure that global trade benefits the rich and not the poor and as statistics show, the three richest men in the world are richer than the 48 poorest countries combined (Mack, 2009).

In many developing countries, political power is disproportionately centralized so that instead of having a network of political representatives distributed equally throughout society, one major party, politician or region is responsible for the decision making throughout the country and this often causes development problems. For example, in situations where politicians make decisions about things or places they are unfamiliar with, lacking sufficient knowledge about the context to design effective and appropriate policies and programs to facilitate the development of their people. Corruption also accompanies the centralization of power because leaders are not accountable to the people they serve and it inhibits development when leaders help themselves or reward cronies with money that would otherwise have been used for development projects (Narayan – Parker, 2002).

Warfare contributes to more entrenched poverty by diverting scarce resources from fighting poverty to maintaining a military and a good example of this was the 1999 to 2000 war between Ethiopia and Eritrea during which both countries experienced a drought which led to severe food shortages. The governments of these countries were far more interested in fulfilling their territorial ambitions that they invested more in their militaries than in helping their people during the drought. Because of the lack of government support, these people, most of who depend on keeping livestock, were impoverished due to the huge losses of their animals (Tadjbakhsh, 2007).

The negative impacts of environmental degradation are excessively felt by the poor especially in those countries that are developing, who often rely on the various natural resources to meet their basic needs through agricultural production and the gathering of natural resources such as water. Thus, the depletion of such basic natural resources directly threatens the livelihood of those who depend on them because they cannot afford alternatives (Forsyth, 2005).

Social inequality is one of the most entrenched causes of poverty in the world and it stems from cultural ideas about the relative worth of the members of different genders, classes or races, and its main purpose is to maintain the status quo with the dominant group remaining at the top of the hierarchy. An example of this are the policies instituted in Apartheid South Africa by the white dominated government that segregated the white and the black races always giving the former an upper hand in all political, social, and economic matters. This ensured that the Africans remained in relative poverty compared to their white counterparts (Padayachee, 2006).

In conclusion, as we have seen in this paper, poverty is a reality among the majority of the world’s population. It has many causes some of which we have looked at and all of these causes of poverty are within the human means to solve. However, most of the people with the power to make a difference are either unwilling or unable to do so because they do not want to disturb the status quo as it is. They make the excuse that acquisitiveness is a part of human nature and they use this excuse to exploit the poor people for their own benefit. They further make use of the misguided theory of evolution that states survival of the fittest to justify their ruthlessness without any consideration for the plight of the poor. It is these kinds of perceptions that we should struggle to fight so that we can rediscover our humanity because if we do not, then we are opening the path that will lead to chaos in the future. The most likely scenario that may occur due to the increase in poverty would also be an increase in violence and criminal activities in society. Furthermore, the likelihood of revolutions due to poverty, such as what happened during the French Revolution, would be greatly increased and such events would tear up the fabric of society as we know it today.