Poverty, external shocks, and lack of education are reasons why the economic inequality exists in Sub-Saharan countries. The first reason that makes economic inequality become dominant is poverty, which has increased in Sub-Saharan countries. The increase of economic inequality clearly can be seen between people in rural and urban areas. As African Development Bank Group in their research mentioned, "the percentage of the population is poor in rural areas (56.9%), compared to urban areas (49.6%)." (www.afdb.org) This shows that the majority of rural citizens and the minority of the urban citizens are poor.
These statistics are slightly higher in rural as oppose... ... middle of paper ... ...line were ruined. Transportation costs are very high which seriously hampers small producers’ access to markets. At the height of the conflict, about one third of the country's people were displaced. The chronic financial crisis became severe and the economy was close to collapsing. Poverty became deeper in the rural areas of the Congo where poor people are now powerless, vulnerable and isolated.
For example, in Colombia, studies suggest that trade reforms have attracted major foreign investments in the oil and mining sectors. Through the integration of international markets and the globalization reforms, Colombia has been able to have a major reduction in poverty and an increase in international investments. Once a very poor country, Colombia’s international trade has greatly increased, especially in the past two decades. The National Administrative Department of Statistics reports that Colombia’s GDP increased 4.3% in 2013. In addition, during the first quarter of 2014, Colombia had the second highest GDP after China.
“Poverty exists because the economic system is organized in ways that encourage the accumulation of wealth at one end and creates conditions of scarcity that make poverty inevitable at the other end” (Johnson). Poverty exists internationally because of the lack of resources to develop poor societies. Rural areas are home to greater portions of the population who are living below the poverty line. The United States profiles the poor according to age, race, and gender. Every age group is affected by poverty, however, reports have shown that the poverty rates for children 18 years and under are greater.
One's position on this social class ladder has a major impact on the life one lives (Henslin 191). "Biological poverty refers to malnutrition and starvation" (Henslin 193). This type of poverty is when one does not have access to enough food, shelter, and clothing. But there is also relative poverty which is just comparing the how well off the different social classes are (Henslin 193). In some nations they have an official poverty line, which is the amount of income that giv... ... middle of paper ... ... known as HUD.
Although, there is plenty of evidence refuting this finding many people tend to think of the poor as lacking the knowledge to attain and obtain a well paying job. For this reason, people of poor economic background receive fewer opportunities in the work force. Poverty culture gives explanation for the existence of poverty through "the continual reinforcement of the cycle of poverty (p. 195, Parrillo)" adapted by children of poor families. Poverty culture consists of unproductive actions such as a lack of education, teenage pregnancy, drug use, a lack of trust in the authorities and a pessimistic attitude. It has been argued that the "negative orientation toward life and work makes them ill-equipped to enter the societal mainstream (p. 195, Parrillo)."
As far as inequality is concerned, South Africa is doing the worst amongst the BRICS. As shown by the graph below, the gini coefficient of South Africa was the highest. Comparing with India specifically; South Africa is at 0.67 in early 1990s and the gini coefficient has increased to almost 0.70, whereas India is at 0.37, leading to a 0.33 differences in the coefficient. However, while it is true that the gini coefficient of South Africa shows a higher value of inequality in India, the increase in India’s gini coefficient is more than South Africa’s. This means that inequality in India has increased more in the late 2000s since early 1990s than in South Africa, leading to people being worse off than before.
Since the 1990s, poverty rate worldwide has been halved from 43% to 21% in 2010. More than a billion people in the developing world have been lifted out of poverty (Economist, 2013). Most of the growth was driven by China and India which have lifted 716 million people put of poverty. This 'economic miracle' has been unprecedented and represents an opportunity for developing country to achieve economic development. However, as these countries have grown stupendously, another concerned have emerged among policy makers and economists.
Poverty occurs in most parts of the world. Nevertheless, the more serious and problematical poverty takes part in the third world and the southern parts of the globe. First of all, we have to clearly define the word “poverty';. In a broad sense, it means that people within this “poverty'; region are poor or have a lower average income per capita than other regions. To a deeper approach, we refer “poverty'; as people have low educational backgrounds, lack of food supplies, or people with lower standard of livings, etc.
It is literacy, primary, secondary and higher education that are necessary for economic growth, reduction in poverty and development. Nevertheless like many other developing countries, India has not paid enough attention to secondary and higher education even though its contribution to development is quite significant (Tilak & BG, 2007). However basic education may take people out of poverty, but it only becomes poverty with an income. So by secondary and higher education this can be sustained well, which helps in upward progress and offer better economic opportunities. Higher education has a very significant role in the development of the societies–in terms of economic development, human development, gender-based development, and improvement in health, life expectancy, and reduction in fertility, infant mortality and poverty (Tilak & BG, 2007).