Escaping the Traps to Find Success

Decent Essays

1. It is possible but difficult to escape all the traps.
2. Inequality Factors
3. Government
4. Developing Nations
5. Corruption
6. China´s Private Sector

1. It is possible but difficult to escape all the traps.
Poverty trap/underdevelopment trap is created when the poor don’t have ability to gain sufficient amount of credit to get out of the trap for generations. If inequality is enormous, the poor cannot get access to loans for their children’s education and for them to start a business. It’s possible for them to escape the trap if their children could achieve education somehow or if they are successful with their businesses. Government should improve the lives of the poor by providing assistance for health, education, shelter, and employment.
Middle income trap is due to lack of innovation capacity, advance technology and high inequality. Countries have to invest more in R&D, encourage knowledge workers stay in the country to create new products, and create funds for innovative entrepreneurs instead of just assembling products for overseas companies (Schuman, 2010)
International helps are necessary to create aids for the poor and boost the attractiveness of the local economy through government’s coordination.
2. Just like poverty trap, inequality only favors high-income people and creates poor institutions for the whole society. The poor don’t have access to sufficient amount of assistance to get out of poverty trap.

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