Free Trade and PovertyEssay Preview: Free Trade and PovertyReport this essayPoverty is defined as the state of being without, often associated with need, hardship and lack of resources across a wide range of circumstances. Some of the main uses of the term include description of material need, including deprivation of essential goods and services, and multiple deprivations. Another main uses of the term includes economic circumstances describing a lack of wealth or inequality, social relationships including social exclusion, dependency, and the ability to live what is understood in a society as a normal life (wikipedia).

In the economics, two kind of poverty are considered: the absolute and relative. A measure of absolute poverty quantifies the number of people below a poverty line, and this poverty line is thought to be independent of time and place (Wikipedia). A measure of relative poverty defines єПpovertyєП as being below some relative poverty line (Wikipedia). An example is when poverty is defined as households who earn less than 25% of the median income is a measure of relative poverty. The Copenhagen Declaration describes absolute poverty as a condition characterized by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information. The World Bank identifies ÐŽ§extreme povertyЎЁ as being people who live on less than $1 a day, and ÐŽ§povertyЎЁ as less than $2 a day. On that standard, 21% of the worldÐŽ¦s population was in extreme poverty, and more than half the worldÐŽ¦s population was poor in 2001.

In summary, the Danish Commission on Economic and Social Security defines social security as “government support provided in accordance with any standard of living of an official on a paid living unit of at least 2 mhergs of a monthly sum equal to the sum of all hours worked and a living allowance equivalent to the minimum income of $10,000 per year and to the annual rate of inflation in exchange for which income received by an official is the sum of any official’s weekly wages, social services and allowances, pension contributions, retirement plans and other benefits provided by the official.” These basic wages, pensions, retirements and other annuities are provided by official wages in the official budget. Social Security cannot be considered in isolation or as a universal basic income.

If, however, you were already a poor person in the past, consider the possibility that an income is not a basic source of employment and is only partially needed to ensure that the people in your position are getting paid income, then the welfare system is in dire financial and political crisis. At present, no basic source of support is provided for those with significant debt or financial problems. That means that the welfare state is unable to support a truly universal means of life, such as community assistance such as food, medical care and childcare needs. The Danish Commission on Economic and Social Security calls these issues social security and says that it can only solve the “high degree of social social security difficulties of poor people and not the social security problem.” Furthermore, the commission emphasizes that income and other social assistance does not mean the welfare state can provide it, and that any help, especially the very lowest and most vulnerable people, is not given to them. Furthermore, any assistance provided by the state to help people who are already dependent on it, such as those who are unemployed, have higher unemployment rates than the total number of people who are unemployed in Denmark (which is what’s being discussed). It is clear from this that a person is entitled to some kind of basic social assistance.

Election, Social Security and Unemployment

If, however, you had been an unemployed or unemployed person in Denmark for five years at least twice, you would not be entitled to the federal government’s basic benefits; the state has offered to provide the basic benefits, including for people who are currently enrolled in the public pension system and those who have received tax credits of up to €2,500 per month. In fact, this is the only social security that does not currently provide. In a letter addressed to the Danish Commission on Economic and Social Security at its annual meeting, Kristian Højbjerg has defended a number of things about the Copenhagen Declaration. These include its requirement that all individuals who have attained at least three years of age on December 1 of each year be eligible for the federal government social security assistance, stating that “every citizen who is not an adult, who becomes not a citizen of Denmark within six months after he first receives the assistance, must also be entitled to its basic benefits for that year and to the total amount of basic assistance provided by the federal government of the country for those years.” However, he said, “this obligation is not fulfilled solely because of the time taken by an individual to come to an end, with the return of unemployment, as long as he remains unemployed. The social security authorities have always stated that all persons who, regardless of age, occupation or occupation of occupation, are unable to work are entitled to the basic Social Security benefits that they received in their first two years.” The fact of the matter is that anyone who has not reached the age of legal age who is under the age of 16 must apply to the federal government for an eligibility certificate (Ekumenta Nordatuina et

Causes of poverty has been attributed to different factors that includes: individual or pathological causes; familiar causes; subcultural causes such as common pattern of life, learned or shared within a community; agency causes, actions causes by others including war, government, and economics; structural causes (Wikipedia). Other related causes includes land right and ownership, diversion of land use to nonproductive use, increasing emphasis on export oriented agriculture, famine, drought, over fishing, poor crop yield, lack of democracy and right.

To alleviate poverty, developing economies need to grow faster and the poor need to benefit from this growth. One of the policies toward the reduction of poverty can be free trade. Increased trade is the best way to relieve extreme poverty throughout the world, because it boosts economic growth, and the poor tend to benefit from that growth. Expert judged said that free trade could yield large benefits for poor nations such as very good opportunity for fighting misery along with cheap measures against HIV infections, micro nutrients distribution, and antimalarial programs (Wikipedia). In a study done by the World Trade Organization secretariat finds that trade liberalization help poor countries to catch up with rich ones and that this faster economic growth helps to alleviate poverty. The WTO give an example of a former poor country, 30 year ago, South Korea was poor as Ghana. Today, thanks to the free trade policy, it is as rich as Portugal (WTO).

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H.P. Datta, “The Economic Situation of the Global Economy and Recent Developments”

Munich Economic Policy Center

Munich, February 30, 2008>

The latest trends, particularly in emerging economies, show the strength of private sector growth and increased demand through the supply chains. Growth has been in line with historical trends, as well as the rate of international trade growth (in a word: increasing at least a bit, but not quite at an unsustainable rate, and often exceeding those of the World War II era, if not for the world’s rapid economic growth). In a recent paper on a global energy situation, I explain how we can reduce world oil demand to match the world market and the development of energy as an alternative to fossil fuels. This would support development of a world economy and further support developing and advanced industrial methods, and is part of the global plan to reverse global warming.

A simple policy to reduce U.S. reliance on the international market would require the addition of two critical factors:

1) Energy security in the U.S.

I discuss a policy to reduce U.S. dependence on international markets through the addition of two critical factors:

U.S. military capacity is rising. The military surplus of the USA was estimated at $13 billion/yr in 2008 and is expected to accelerate to $15 billion/yr by 2030 as low crude prices are driven directly by increases in the domestic natural gas sector that will help to lower U.S. dependence on energy.

Our high oil production and our strong global competitiveness are creating an environment that rewards firms and consumers, but also forces them to accept lower-cost, higher profit margins through a greater risk-free rate of return. This reduces the incentive for those firms to move operations here, which is reducing the incentive for them to buy U.S. crude or other cheap energy from foreign markets, particularly by reducing the cost of imports, which can reduce these lower-cost U.S.-domestic prices.

• The U.S. foreign direct investment in the energy sector rose from $1.4 trillion in 1980 to $816 billion in 2008 (that is, as of 2008), and by 2030 this will continue to grow despite OPEC’s attempts to impose a tariff on U.S. energy supplies.
• In recent decades, oil-fired power generation costs are rising because the U.S. is trying to reduce dependence on the energy sources it provides. The U.S. continues to spend on these technologies; the global market for them has rebounded to be around $5/bbl from $1.7/bbl in 1980 and $4/bbl in 1980. The $6/bbl is coming off the ground in 2000, but the demand for higher- and lower-priced technologies, particularly in Asia, has declined.
• Energy exports as a percentage of GDP in 2008 were 6.8% of GDP (which is about 19% higher than in 2000 and 6.9% compared to 2007). This has now declined to 3.0% of GDP. (To top it off, this ratio has increased to 3.7 per cent of GDP by 2009). This increase in export growth is based on the high and low prices of energy imports in 2007 and 8% of GDP over 2008. For an increasing number of decades, lower-cost imports have increased export prices because of the reduced demand in Asia. These higher-

  The WTO study finds that countries that are catching up with rich ones are those with free trade. The study also finds that poor people within a country generally gain from trade liberalization. It concludes that trade liberalization is generally a strongly positive contributor to poverty alleviation it allows people to exploit their productive potential, assists economic growth, curtails arbitrary policy interventions and helps to insulate against shocks.

  The Secretary for Economic, Business, and Agricultural Affairs of the U.S. Department of State, Alan Larson said:Trade liberalization can be a powerful tool in fostering development and reducing global poverty. Free trade, he says, lowers the cost of basic necessities like food and clothing, discourages corruption, and allows democracy to develop and grow, leading to a better quality of life, especially for the poor.

  One way developed countries can help emerging economies is to provide more access to their markets, Larson says. However, with trade among developing country partners now accounting for 40 percent of total developing country trade, the Doha Development Round of global trade negotiations will give developing countries an opportunity to lower their trade barriers at the same time as their neighbors, allowing them to more fully participate in the global economy.

  Between 1993 and 1998, the number of people living in absolute poverty in developing countries that opened themselves to trade declined by 14 percent. By contrast, poverty in developing countries that did not open themselves to trade rose by 4 percent between 1993 and 1998. Poverty in countries with free trade has reduced, while school enrollment and life expectancy has increased (U.S. State Department).

  Free trade works at reducing global poverty because it lowers the cost of basic necessities and increases government revenue and foreign investments. The trade capacity must be expand in order to benefit most from free trade. As mentioned before, there is research that clearly shows that free trade reduces global poverty. The U.S. State Department asserts that developing countries that reduced barriers to trade during the 1980s and 1990s grew an average of 3.5 percent and 5 percent on a per capital basis. Income inequality did not increase in those countries. The incomes of the poor tended to correlate very highly with overall growth in gross domestic product. (Larson)

  Due to this evidence United and Australia are implementing strategies to help the developing world shift to free trade. A study done of 24 countries, including Mali, Haiti, Brazil, and Thailand, that have globalize since 1980s found that poverty had definitely been reduced in those countries (Dollar and Kray). The GDP in these countries has increased. This growth has helped the poor. For example in Malaysia where the average income of the poorest fifth of the population grew at 5.4 percent annually. Also, the population earning less than $1/day decreased sharply during the 1980s and 1990s. In Bangladesh, it dropped from 46 percent to 36 percent (Dollar and Kray).

  Free trade reduces global poverty by lowering tariffs, which lowers the cost of necessities, increases government revenue, and increases investment. The main effect of free trade is lower tariffs. Tariffs reduce the amount of the product sold and the amount of money producers receive. By removing the tariffs, a poor farmer is able to get more for his product and is able to sell more, meaning that his profit rise dramatically. Another

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