Author: Josh Adler
The article describes the declining rate of poverty around the world. The Economist states that the rate of poverty has decreased even though the world economic crisis is the worst since 1930s and the biggest food-price increases since the 1970s. The World Bank’s Development Research Group found that the number of people in absolute poverty, those living off of $1.25 a day has decreased from 2005. This is the first decrease since 1981. The UN met its millennium development goal of halving world poverty between 1990 and 2015. The declining rate of poverty is mainly due to china because of the increase in economic activity has taken 660 million people out of poverty since 1981. China accounts for 200 million people living on less than $1.25 a day in 2008. Africa has seen its first decrease in poverty ever in 2008. Africa’s poverty rate decreased by 12 million, this brought the poverty rate down to 47 percent. Although the amount of people living off of $1.25 has decreased the population living between $1.25 and $2.00 has almost doubled between 1981 and 2008.
This article proves that although the recent deterioration of rich economies has hurt the families of wealthy nations the compensation of families living below absolute poverty has increased. This is due to the investment and growth of emerging markets. I believe that wealthy nations will continually seek potential emerging markets. As emerging market economies grow the standard of living improves and turns cheap labor into expensive labor. Therefore wealthy economies and corporations constantly search for cheaper and larger labor force. However, corporations can’t invest in any country they have to consider the political risk. The cooperation of the domestic government helps protect private property and lower regulation. I believe if the African governments encourage corporations by ending corruption and protecting private property then there is limitless growth and absolute poverty will immensely decrease.
Economist Article: http://www.economist.com/node/21548963