Poverty influences hundreds of millions of people around the world, and the poorest people in developing world lives on less than $2 a day. The experience of long-term poverty in developing countries is one of the most critical and continuous issues in the world. This essay will outline the reasons for poverty in developing countries and how this issue can be solved. Moreover, the essay will examine the impact of globalization on poverty, labour market in developing countries and how to address these two problems.
Focusing on different manifestation of globalization, the main effects of globalization on poverty are on the growth of trade and on income distribution. As far as its impact is concerned, the problem is advanced technologies with high-speed information. It is hard to separate business cycles and financial crisis with technologies in international trade (Ashta, 2013). The technology has captured the interest of millions of people all over the world, but rural areas in the developing world fail to be enforced it. In view of the predominantly, the poorest lives in rural area in developing world, agriculture is the main source of income and employment.
They lack of knowledge about planting methods and about avoiding disease resistant are caused lower productivity and growers sell their product to local agents, they are unaware of the market prices (Nissanke & Thorbecke, 2010). Moreover, globalization have an impact on the trade development of migration, through the mechanism of remittances. Countries and multinational are financed surprisingly low remittances and transfers are not helping to the poorest people in rural areas in developing world. In addition to facing to powerful globalization forces, many rural areas in developing countries are experienced economic instability. The increasing wage inequality and convergent mobility are compatible, because individuals wide-spread and large earning changes (Nissanke & Thorbecke, 2010).
The poorest people in developing countries only tolerate succumbing to the low-wage labor force (Yanagisawa, 2011). "Developing countries has not been central to the progress of development economics in the last two decades." The central fact about the price of labor is that its price is much more closely associated with people's lives than they know where relevant. It means that geography distance problem more than human capital (Teal, 2011). Focusing on labour market policies and social policies, there has been insufficient to assess to their impact and effectiveness. This is especially true for those in the developing world have tried policy. The short-term growth and productivity is the uppermost, the policy may focus on improving high educated and formal employment and other skills, because they are short-term productivity will be greater than would be the risk of poverty and education (Standing, 2011). Although the labor market has been rather negative impact on government transfer payments cushioning macro shocks sources of income from social security - Social Influence (some triggered by the forces of globalization), especially among the poorest sectors of development plays a crucial important role. However, the poorest lives in developing countries who have lost their jobs as a result of the minimum wage increase, people must be found in the lower-paying job from regulatory authorities may extend the working hours and / or other family members to enhance their participation in the labor force in order to maintain rid poor (Nissanke & Thorbecke, 2010).