The persistent problem of poverty in the developing world has put a question mark on the relation between economic growth and poverty. Some individuals are of the opinion that when economy develops, because of industrial growth, poverty comes down. Others believe that economic growth leads to poverty. This essay intends to analyse both perspectives. l, however, agree with the former view.
To begin with, industrial growth benefits nearly all citizens of a country, even if not equally, and therefore reduces poverty. For example, in rural areas, most of the poor are engaged in agriculture. When such a country grows through agricultural exports, it benefits both poor farmers and the even poorer labourers they employ. Similarly, rapid growth in manufacturing sector because of increase in demand creates a lot
of new jobs, and eventually causes a rise in wages that further reduces poverty.
My second argument comes from historical records. Western countries began discovering the positive relation between economic growth and poverty reduction around 1820 and as a result the living standards in Europe and the United States improved many fold in the next years. Economic growth thus eliminated mass poverty in what is today considered the developed world. Even a short-term view confirms that the recent acceleration of groMh in many developing countries has reduced poverty, measured the same way. The opponents of this view claim that economic progress leads to inequality between the rich and the poor. They opine that a handful of rich are getting richer while the poor are being driven to the wall.
However, results have proved that such inequality is only short lived and everyone has benefited in the long run. lt is because of the high initial inequality that it appears as if economic groMh is leading to poverty.
Summing up, industrial progress definitely reduces povefi. Sometimes, there is unequal distribution of wealth in the initial stages of economic development. Nonetheless, everyone benefits eventually.
The persistent problem of
poverty
in the developing world has put a question mark on the relation between
economic
growth
and
poverty
.
Some
individuals are of the opinion that when economy develops,
because
of industrial
growth
,
poverty
comes
down. Others believe that
economic
growth
leads to
poverty
. This essay intends to
analyse
both perspectives.
l
,
however
,
agree
with the former view.
To
begin
with, industrial
growth
benefits
nearly
all citizens of a
country
, even if not
equally
, and
therefore
reduces
poverty
.
For example
, in rural areas, most of the
poor
are engaged
in agriculture. When such a
country
grows through agricultural exports, it benefits both
poor
farmers and the even poorer
labourers
they employ.
Similarly
, rapid
growth
in manufacturing sector
because
of increase in demand creates a lot
of new jobs, and
eventually
causes a rise in wages that
further
reduces
poverty.
My second argument
comes
from historical records. Western
countries
began discovering the
positive
relation between
economic
growth
and
poverty
reduction around 1820 and
as a result
the living standards in Europe and the United States
improved
many fold
in the
next
years.
Economic
growth
thus
eliminated mass
poverty
in what is
today
considered the developed world. Even a short-term view confirms that the recent acceleration of
groMh
in
many
developing
countries
has
reduced
poverty
, measured the same way. The opponents of this view claim that
economic
progress leads to inequality between the rich and the
poor
. They opine that a handful of rich are getting richer while the
poor
are
being driven
to the wall.
However
, results have proved that such inequality is
only
short
lived
and everyone has benefited in the long run.
lt
is
because
of the high initial inequality that it appears as if
economic
groMh
is leading to poverty.
Summing up, industrial progress definitely
reduces
povefi
.
Sometimes
, there is unequal distribution of wealth in the initial stages of
economic
development. Nonetheless, everyone benefits
eventually
.