A Study on the Economic Benefits of Globalization: Focusing on the Poverty and Inequality between the Rich and the Poor

Abstract

Globalization is now well recognized by many as an inescapable feature of the world today. In particular, in the middle of global economic crisis globalization is one of the hot issues drawing much attention from countries around the world. There are contradictory perspectives on globalization. There are many sweeping statements that assert that economic globalization is increasing global poverty and inequality between the rich and the poor in the world. There are also many others who insist that the poverty and inequality issues have been resolved in some sense through globalization. In order to find the answer to the question, firstly the meaning of globalization was fully explained. Based on the understanding of globalization, the questions such as how globalization has contributed to reduce the economic gap between the developed and the developing countries, and to reduce the poverty by analyzing the economic growth, the number of people living below the absolute poverty line and so on were analyzed. The reasons why globalization is a good opportunity for some countries while some other countries get not something from the globalization was also discussed in this research. We found that globalization has contributed to reduce global poverty and to increase the welfare of both the developed and developing countries. However globalization has impacted different groups differently. Some have benefited enormously, while others have borne more of the costs. The developed countries could get more economic benefits from the less developed countries through globalization. This means, inequality between the rich and the poor countries still remained as a serious threat in the global economy. And even among the developing countries globalization has impacted differently. The trends toward faster growth and poverty reduction are strongest in developing economies that have integrated with the global economy most rapidly, which supports the view that integration has been a positive force for improving the lives of people in developing countries There are two main reasons for the inequality existing between the developed and developing countries. The fist one is the difference of economic size and power between the developed countries and the developing countries started to exist from the late 18th century. The second one is the differences in the management skill in taking advantage of the globalization.