Factors Leading to the Increase in the Gap Between Rich and Poor Nations Due to Globalization

2447 WordsJul 15, 200810 Pages
FACTORS LEADING TO THE INCREASE IN THE GAP BETWEEN RICH AND POOR NATIONS DUE TO GLOBALIZATION INTERNATIONAL INEQUALITY Inequality must be defined and be able to be measured so that comparisons can be made between rich and poor countries. Once the causes are determined, the effects of globalization can be evaluated and be measured. The World Bank defines inequality as the disparity of income and standard of living among nations and their citizens (Birdsall, 2002) The income gap that exists between the rich and poor countries has become substantial. In 2003, the richest fifth of the world’s population received 85% of the total world income, while poorest fifth received just 1.4% of the global income (infoplease, 2005).When the GDP is…show more content…
By contrast, in developing countries, farming accounts for 30 to 60 percent of the Gross Domestic Product and up to 70 percent of the labor force. This is why labor rights protection is at least as critical for developing countries as intellectual property rights protection is for the rich. Developing countries were promised a new regime that would allow them to sell their goods and trade their way out of poverty through undistorted market openness. This required generous market access by the rich for the products of the poor, and also reduction-cum-elimination of market-distorting producer and export subsidies, with the resulting dumping of the rich world's produce on world markets. Thus Europe launched its "Everything but Arms" initiative whereby it would open its markets to the world's poorest countries. The initiative foundered on too many non-tariff barriers, for example in the technical rules of origin. The US seemed to offer so-called EBP - Everything But what they produce. Under its proposals, developing countries would have been free to export jet engines and super-computers to the US, but not textiles, agricultural products, or processed foods. Elimination of rich country production and export subsidies, and the opening of markets, while necessary, would not be sufficient for developing countries to trade their way out of underdevelopment. They also have a desperate need to institute market-friendly incentives and regulatory
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