4.4 Economic inequalities and development

Economic globalization has widened the wealth gap between rich and poor nations. The North-South divide highlights disparities between developed and developing countries, with the richest 1% owning over half the world's wealth.

Efforts to reduce poverty include microfinance, cash transfers, and economic empowerment. Sustainable development aims to balance growth, equity, and environmental protection. The UN's Sustainable Development Goals build on earlier Millennium Development Goals to address global challenges.

Global Economic Disparities

Unequal Distribution of Wealth

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• Global wealth disparity refers to the vast differences in wealth and income between individuals, regions, and countries on a global scale
• The richest 1% of the global population owns more than 50% of the world's wealth, while the bottom 50% owns less than 1% (Oxfam)
• Income inequality within countries has been rising, with the gap between the rich and poor widening in many nations
• Factors contributing to global wealth disparity include historical legacies of colonialism, unequal access to resources and opportunities, and differences in economic systems and policies

North-South Divide and Development Classifications

• The North-South divide refers to the economic and social disparities between the wealthy, industrialized countries of the Global North (North America, Europe, Australia, and parts of Asia) and the poorer, less-developed countries of the Global South (Africa, Latin America, and parts of Asia)
• Developed countries are characterized by high levels of industrialization, advanced technology, high per capita income, and high human development indicators (United States, Japan, Germany)
• Developing countries are characterized by lower levels of industrialization, lower per capita income, and lower human development indicators (India, Nigeria, Brazil)
• The classification of countries as developed or developing is based on various economic and social indicators, such as GDP per capita, life expectancy, and literacy rates

Poverty Alleviation Efforts

Strategies for Reducing Poverty

• Poverty reduction strategies aim to alleviate poverty and improve the living conditions of the poor through targeted interventions and policies
• These strategies include providing access to basic needs (healthcare, education, clean water), creating employment opportunities, and promoting inclusive economic growth
• Microfinance programs provide small loans and financial services to the poor, enabling them to start businesses and generate income (Grameen Bank in Bangladesh)
• Conditional cash transfer programs provide financial assistance to poor households in exchange for meeting certain conditions, such as sending children to school or attending health check-ups (Bolsa Família in Brazil)

Economic Empowerment and the Informal Economy

• Economic empowerment involves increasing the economic participation and decision-making power of marginalized groups, particularly women and the poor
• This can be achieved through skills training, access to resources and markets, and promoting entrepreneurship
• The informal economy refers to economic activities that are not regulated or taxed by the government, such as street vending, domestic work, and small-scale manufacturing
• The informal economy provides employment and income for many of the world's poor, particularly in developing countries where formal job opportunities are limited
• However, workers in the informal economy often face precarious working conditions, low wages, and lack of social protection

Development Frameworks

Sustainable Development

• Sustainable development is a development approach that seeks to balance economic growth, social equity, and environmental protection
• It aims to meet the needs of the present generation without compromising the ability of future generations to meet their own needs
• The United Nations' 2030 Agenda for Sustainable Development outlines 17 Sustainable Development Goals (SDGs) that address global challenges such as poverty, inequality, climate change, and environmental degradation
• Sustainable development strategies include promoting renewable energy, sustainable agriculture, and sustainable consumption and production patterns

Millennium Development Goals (MDGs)

• The Millennium Development Goals (MDGs) were a set of eight international development goals established by the United Nations in 2000, with a target date of 2015
• The MDGs focused on reducing extreme poverty, improving health and education, and promoting gender equality and environmental sustainability
• While significant progress was made in achieving the MDGs, such as reducing global poverty rates and increasing access to primary education, many targets were not fully met, particularly in sub-Saharan Africa and South Asia
• The MDGs were succeeded by the Sustainable Development Goals (SDGs) in 2015, which build upon the progress made and set more ambitious targets for 2030