Developing Countries And Its Effects On Economic Growth

Poverty has increased tremendously over the last decade in many countries, developed or less developed. Poverty can be caused by many different factors,

The impact of economic growth on poverty has been evaluated to observe the correlations. There have yet to be a direct relationship between the two. In certain circumstances it can be positive economic growth leading to reduction in poverty. In other situations it can be negative economic growth leading to increase in poverty. The effect of economic growth on poverty varies on the inequalities that are prevailing in an economy.

The purpose of this review is to investigate the claims made by economists on why poverty is a reoccurring factor in developing areas, and whether or not that particular claim is indeed one of the reasons that these areas suffer from poverty. Poverty traps are one of the prominent factors in the reasoning behind poverty in developing areas; however, there are also many other supporting factors that reinforce poverty. Shepherd (2007) believes there is a point of equilibrium in

Despite the Indian economy set to becoming the 3rd largest in the world (Khanna ,2013), poverty in India is widespread, with the nation estimated to have a third of the world's poor. and with growth being uneven across social and economic groups. In 2010, the World Bank reported that 32.7% of all people in India fall below the international

Inequality is defined as the wide gap between a low and a high income within an economy. Poverty is defined as being in the state of extremely poor. India is well renowned for having two classes, those living well above the poverty line, and those living well below. Currently, India is promoting strategies to decrease their percentage of people living under the poverty line. In 2012 the World Bank conducted some research to find out that 21.9% of the countries 1.295 billion, are living under the poverty line. As of 2014, the GNI per capita in India is $1570, US dollars, which is awfully low compared to the rest of the world. The big problem with this is that it isn’t developing at a state that it should be, although it is improving. India has traces linking to the government being corrupt, which doesn’t help the cause and this could be why it is showing poor economic development.

Therefore, “There are a number of people in India who still live on the street and beg the whole day to eat a meal. Underprivileged children are unable to attend school and those that have the opportunity drop out after a year or so. People below the poverty line live in unhygienic conditions and are prone to many health problems. With this, the vicious cycle of poor health, lack of education and more poverty keeps on increasing” (Kaur, 2013, para. 3).

Nelson Mandela once said, “As long, as poverty, injustice and gross inequality persist in our world, none of us can truly rest.” In today’s world, poverty is a big issue which needs to be solved for the world to function properly. A country which faces extreme poverty is India, with over 194 million people facing it. India is a beautiful country known for its rich culture, having the third largest ocean, and the world’s tallest mountain called the Himalayas. India faces poverty due to social issues, demographic factors, and economic constraints of the country.

Eradicating extreme poverty and hunger is the number one goals of Millennium Development Goals. The target of reducing extreme poverty rates by more than half has been attained five years ahead of 2015 deadline. Since the inceptions of MDG, the extreme poverty and hunger rate has reduced significantly in most developing regions. The statistics conducted in 2015 indicates that more than one billion have been lifted out of abject poverty from the time MDG was coined. As compared to 1990 when the majority of the people use to live below $1.25 a day in developing countries, the rate of poverty has dropped by more than 14 percent in 2015. The global employment-to-population ratio has significantly reduced by more than 2 percent from 1991 to

With economic growth, income poverty falls; with economic contraction, income poverty rises. Some countries in East Asia sustained per capita GDP growth rates of 5% over four decades, with massive improvements in living standards and in health and education for poor people and for everyone else. Other countries, most countries in Africa such as Somalia, registered negative growth or no growth at all over the same period, delivering no improvements even in average living standards. While economic growth is systematically associated with poverty reduction, the rate growth translates into lower poverty depends on the initial level of inequality in the distribution of income, and how that distribution changes over time. Growth and its effectiveness in reducing poverty also depend on sound, constant governance. So confronting socioeconomic inequalities and building sound institutions might be important for providing a socially sustainable basis for overall growth and for ensuring that poor people gain substantially from that growth (Lansley, 78).

The world has undoubtedly been booming and has become more prosperous; however, growth has been inconsistent in the global scale. Tackling theses inconsistencies cannot be resolved by development alone, but consistent measures have to be taken. Unemployment and underemployment are at the core of poverty. Eradicating poverty altogether has been the ethical, social, political and economic goal. It can only be realized by taking a multidimensional approach combined with strategies and plans for the people living in poverty that meets their basic needs and empowers them.

The economical activities of the developing countries hugely borrow from the development of the road network systems. Road networks contribute notable about the 40% of the national traffics especially in the third world countries. However, the third world countries have a limited amount of necessary road lane that would facilitate the development prerequisite for the eventual prosperity vital for them. The road networks percentage is dismally low recording to 14% of the world total road networks. Most of the third world countries experiences congested road networks due to the extensive importation of the second hand vehicles that are cheaper but prone to poor quality. The rate of the development of the road networks is at a slower pace as compared to the pace at which the road networks are being established. The limited number of the roads available is usually overused thus leading perennial repairs and rehabilitation. South Africa has a better road network system as compared to other countries in Africa. The South African country poses good and effective performance in the economical growth borrowing from the extensive road network and the large amount of the natural resources available to its disposal. The country has initiated excellent practice of management that spurs its growth. China economy is on rise as a result to huge investment in the construction sector. The country developed international construction companies that has benefited from the lucrative African

Over half of the world population is living in urban environments and projections for the next 30 years predict that the majority of population growth will be taking place in cities in the developing world. While more mega-cities, meaning cities larger than ten million, have been on the rise, still a majority of people who live in urban environments are living in smaller agglomerations. With an expectation of urban-growth and globalization to continue to increase in the future, it’s essential to understand the ways in which the development of labor and capital have an impact on urban life. There is substantial debate over what affects the growth of cities and who this occurs. There is substantial debate over how cities grow, and what primarily affects and determines their growth, especially in developing countries. I will aim to analyze the different arguments regarding the factors affecting the growth prospects of cities and regions in the developing world. I will first discuss the literature of economic geography. Next, I will evaluate the “global cities” literature. I will then compare the strengths and weakness of these two perspectives. Afterwards I will emphasize why both perspectives offering convincing arguments, though neither offers a complete explanation to understand factors affecting economic growth.

Economies grow and develop, they expand and advance, and they progress and prosper. There are phases when they decline too, and there are economies that experience continuous decay. If one considers long stretches of human history, one knows that economies (civilizations) disappeared altogether. We will not take into account such long stretches of time. We shall not consider too distant a past either. We will leave them to historians, may be, economic historians.

In India, the economic stability is challenged by the differentiating standards of poverty between the state and the citizen(s). The welfare policies implemented by the government programs have not and are not yet able to meet the standards that will be beneficial in producing a healthy society. The government of India and the citizens share different political ideologies concerning the economic infrastructure of their country. The state level of governance has not yet been capable of meeting the correct economic standards in the process of development in order to achieve a small gap between the poor and wealthy civilians entitled to their state. That in mind, the state level did not cause the mass poverty of India but has not yet found the factors to resolve the issue of inequality poverty within India.

But some argue that the statistics speak for themselves. In 1991, 35.8% of India’s population of 846 million, that is, about 300 million people, lived on less than one dollar a day, which is the generally accepted measure that economists use worldwide to define absolute poverty (in a strictly global context, as opposed to relative poverty, which is necessary an intra-state indicator) . Ten years later, the figure dropped to 27.5%. By 2006, with India’s population at 1.02 billion people, that necessarily implied that there were 270 million people living in absolute poverty. In the intervening years, when India added 115 million people, those living in absolute poverty fell by 30 million. Had the poverty rate remained as it was, that is 35.8% , there have been 365 million poor people. Thus we are able to argue, with some fairly reasonable certainty that the economy, within this timeframe lifted 95 million people out of absolute poverty.