ECONOMIC
GLOBALIZATION,
POVERTY, AND
INEQUALITY
GROUP 6
Marielle De la Torre
Nolly James M. Pugal
Andrea Palabrica
ECONOMIC GLOBALIZATION

► Economic globalization refers to the increasing

interdependence of world economies as a result of the
growing scale of cross-border trade of commodities and
services, flow of international capital and wide and rapid
spread of technologies. It reflects the continuing
expansion and mutual integration of market frontiers, and
is an irreversible trend for the economic development in
the whole world at the turn of the millennium. The rapid
growing significance of information in all types of
productive activities and marketization are the two major
driving forces for economic globalization
► The process of economy globalization is also the process
of global industrial restructuring and readjustment. With
the development of science and technology and increase
of income level, industrial structures of all the countries
have been also undergoing readjustment and upgrading.
In recent years, developed countries in the west are
gradually entering the era of knowledge economy and
have started to shift to developing countries many
labor-intensive industries of weak international
competitiveness.
Risks Brought along by Economic Globalization to
Developing Countries and The Prevention against
Related Risks

► The participation of developing countries in the

globalization process can enable them to better utilize
their comparative advantages, introduce advanced
technologies, foreign capital and management
experience. It is also favorable for eliminating
monopolistic behaviors and strengthening market
competition. Nevertheless, while providing more
development opportunities for developing countries, the
globalization process is also posing enormous risks:
Risks Brought along by Economic Globalization to
Developing Countries and The Prevention against
Related Risks
1. The participation of developing countries in the
globalization process can enable them to better utilize
their comparative advantages, introduce advanced
technologies, foreign capital and management
experience. It is also favorable for eliminating
monopolistic behaviors and strengthening market
competition. Nevertheless, while providing more
development opportunities for developing countries,
the globalization process is also posing enormous risks.
Economic Globalization:Prevention

► Interests of developing countries should be guaranteed and their

say enlarged in the process of developing a new international
economic order. The trend of economic globalization that came
into being and has developed under conditions that the old
international economic order has not yet been fundamentally
changed. Globalization itself can not bring a fair and reasonable
new international economic order, and some developing countries
that are unable to enjoy the benefits and evade the harms are
confronted with the danger of becoming outsiders.
►  Globalization is a positive development as it will
give rise to new industries and more jobs
in developing countries. Others say globalization
is negative in that it will force poorer
countries of the world to do whatever the big
developed countries tell them to do.
Poverty

► Poverty is about not having enough money to meet basic needs

including food, clothing and shelter.  However, poverty is
more, much more than just not having enough money.
The World Bank Organization describes poverty in this
way:
► “Poverty is hunger. Poverty is lack of shelter. Poverty is being sick
and not being able to see a doctor. Poverty is not having access to
school and not knowing how to read. Poverty is not having a job, is
fear for the future, living one day at a time.
► While much progress has been made in measuring and
analyzing poverty, the World Bank Organization is doing
more work to identify indicators for the other
dimensions of poverty.  This work includes identifying
social indicators to track education, health, access to
services, vulnerability, and social exclusion. 
► There is no one cause of poverty, and the results of it
are different in every case. Poverty varies considerably
depending on the situation.
► The impact of globalization on poverty eradication has
increasingly become the focus of attention of
governments and international organizations. The
economic arguments in favour of globalization stress the
positive relationships between increasing international
trade and investment flows and faster economic growth,
higher living standards, accelerated innovation, diffusion
of technological and management skills, and new
economic opportunities.
ECONOMIC INEQUALITY
► Economic inequality is the unequal distribution of income
and opportunity between different groups in society. It is
a concern in almost all countries around the world and
often people are trapped in poverty with little chance to
climb up the social ladder. But, being born into poverty
does not automatically mean you stay poor. Education, at
all levels, enhancing skills, and training policies can be
used alongside social assistance programs to help people
out of poverty and to reduce inequality.
There are three main types of
economic inequality
► 1. Income Inequality

► Income inequality is the extent to which income is distributed unevenly in a group of people.

► ncome is not just the money received through pay, but all the money received
from employment (wages, salaries, bonuses etc.), investments, such as
interest on savings accounts and dividends from shares of stock, savings,
state benefits, pensions (state, personal, company) and rent.
► Measurement of income can be on an individual or household basis – the
incomes of all the people sharing a particular household. Household income
before tax that includes money received from the social security system is
known as gross income. Household income including all taxes and benefits is
known as net income
Pay Inequality
A person’s pay is different to their income. Pay refers to
payment from employment only. This can be on an
hourly, monthly or annual basis, is typically paid weekly
or monthly and may also include bonuses. Pay
inequality therefore describes the difference between
people’s pay and this may be within one company or
across all pay received in the UK.
Wealth Inequality

Wealth refers to the total amount of assets of an

individual or household. This may include
financial assets, such as bonds and stocks,
property and private pension rights. Wealth
inequality therefore refers to the unequal
distribution of assets in a group of people.