Online Custom «World Poverty Can Be Addressed by Pursuing Neoliberal Economic Policies» Essay Sample
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Among many nations participating in the global market, there is a strong belief that neoliberal economic policies can aid while addressing the issue of world poverty. The paper is an argumentative essay against the statement, “World poverty can be addressed by pursuing neoliberal economic policies.”
Neoliberal Economic Policies
In economics, neoliberalism refers to the situation where government moves the factors running the economy from the private sector to the public sector. Liberalism, from an economic perspective, refers to the removal of trade barriers in the economy. Activists often use the term while referring to individual factors promoting free trade in the global economy. Neoliberalism relies on principles of neoclassical economics (Difazio 2006). It relies on the principles suggesting that the government ought to limit subsidies, reduce their spending, broaden the tax base, privatize parastatals and limit protectionism. Over the last decade, while the government is trying to control the level of poverty facing its citizens, application of neoliberalism is continuously gaining momentum. Global large financial institutions such as the World Bank and the international monetary fund (IMF) have the responsibilities of implementing these policies in global trade (Harrison 2010).
Approximately, half the world`s population live on less than 2.5 dollars per day. Statistically, it makes a representation of more than 3 billion people in the world. Poverty refers to a state or condition of deficiency. In other words, it is a condition where citizens never satisfy their daily needs. In the modern society, it is not enough to blame the poor for their conditions. Surprisingly, many people attribute poor people with poor decisions and as well laziness. As a result, in the society, poor people face discrimination. Similarly, in an international context, different nations have their states of identity. Conversely, there are poor (undeveloped nations), developing and as well developed nations (Chandrasekhar 2002).
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Normally, conditions of poverty in a nation attribute to some government policies implemented. On the other hand, poverty attributes to a government`s failure of participating in a collaborative engagement with the others (Sniegocki 2009). Therefore, behind the policies, set by the government, lies the drive of globalization in the form of global decisions, practices and policies. These are primarily set and influenced by the powerful and rich. The governments in poor countries are, therefore, influenced by the rich and powerful in the policies that they make (Mukherjee 2012).
Points supporting the topic
Policies used during neoliberalism not only require internal but also rely on external regulations (Sniegocki 2009). Conversely, it remains as the sole duty of the organization to maintain free market contracts. States have the responsibility of presenting in the market while ensuring and enhancing a uniform system of weights and measures. Similarly, it has the role of providing a common currency used in the free market established. It is a form of poverty solution as it enhances uniformity between nations and as well promotes enhanced international trade cooperation (Mukherjee 2012).
After the Second World War, financial institutions faced challenges while undertaking their tasks. After union of several nations, these institutions had the role of promoting cooperation in the global economy. In addition, they were to ensure that the beggar-thy-neighbor policies, which had contributed to the great depression among global nations, did not proceed. Through the policy, international monetary fund and the World Bank were founded. The liberal approach to international political economy in the ‘free market’ is applied when there is a voluntary exchange in the markets. International organizations emphasize that these policies are effective during the process of fighting against poverty globally.
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Open markets are responsible for controlling the global economy. Similarly, free exchange of currencies promotes an effective growth of economy of individual states. Apparently, it contributes to an equitable distribution of goods and services throughout the world economy. On the other hand, the government has the role of making sure that operations conducted in the free markets are smooth and uninterrupted (Difazio 2006).
Similarly, globalized economy involving both rich and poor nations is an important approach towards eradicating poverty. Global monetary funding institutions have enough capital capable of sustaining investments in the former. Conversely, it is an important aspect in the global economy that enhances cooperation.
Neoliberalism of global markets cannot fight poverty by itself (Difazio 2006). Despite its role in bridging the gap between the developed and developing nations, liberalized markets only encourage a free flow of trade and capital. Nevertheless, citizens’ standards do not raise. However, in an ideal free market, there is an assumption that capital and revenue flow to the developing nations and thus increase investments in these nations thus aiding in increasing the flow of income among the citizens (Pons-Vignon 2011).
Structural adjustment is another major cause of poverty. Adjustments in education and health sectors mostly result from structural adjustment policies prescribed by International Monetary Fund and the World Bank. In most cases, these financial institutions state conditions to nations acquiring loans from them. Apparently, these conditions lead to these structural adjustments.
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In a free market, developing countries also face influences from developed nations. Influences such as opening their markets to the global economy often lead to rising poverty conditions. Opening market to other nations leads to competition with more powerful and more industrialized countries. Similarly, it contributes to unhealthy competition where goods from developing countries are rejected by consumers due to their high pricing. Consumers often substitute these goods with cheap imports from developed nations. In the end, it leads to a stunted growth of the developing countries, as their industries do not have equal chances of growing thus leading to increased poverty levels (Prasad 2006).