POVERTY

CHAPTER 10

ALLEVIATION
AND
INTERNATIONAL
TRADE
Learning Objectives
● Explain the meaning of poverty alleviation;
● Formulate recommendations and strategies on how the government can
alleviate poverty;
● Analyze the various ways of poverty alleviation through sustainable
development;
● Discuss international trade and compare import, export and tarrifs; and
● Understand the socio-economic impact of business on poverty
alleviation and international trade
Poverty Alleviation
(Poverty Reduction)
- Poverty alleviation is a way to improve the quality of life of
those people currently living in poverty.

In creating and using new and inexpensive mobile technologies…

- there is potential for increased economic growth in developing

countries

- there are positive changes impacting those living in the worst

conditions

United Nations Development Programme

- states that simple economic growth won't reduce or alleviate

poverty, improve quality, or produce joy, unless said growth is
inclusive of all individuals in the economy (Bradley 2016 )
Ways of Poverty Alleviation
through Sustainable
Development
According to Rosenberg (2003), the following 2. Strengthening livelihood strategies and
are ways poverty can be alleviated through increasing options
sustainable development: •Few livelihood options –feel forced to exhaust even
the few resources to which they do have access
1. Alleviating poverty through environmental
protection •Caring for natural resources –an important way of
increasing people's livelihood options
•The poorer we are, the harder environmental issues
hit us. •Care –protection and restoration

•Desperate for employment, poor people •Protect and increase soil fertility, remove alien
invasive plants, and re-establish indigenous
–suffer the unhealthiest work environments vegetation thus help people make a living off the
land.
–more exposed to disasters, toxic dumps, and
polluted air and water

–less able to make a living

–often depend directly on natural resources

3. Providing Basic Incomes. 5. Creating Meaningful
Jobs
•Income –helps improve quality of life •Economic growth meant more jobs –when growth was
built on mining and other labor-intensive industries
•Social grants supplement the trickling down of wealth
through economic growth. •Economic growth –generated by industries either
because they are mechanized or because they require
•Basic income grant
small numbers of highly skilled people to run them
–recommended in order to alleviate hardship
Creating jobs by investing in industry –a capital-
–relieve the over-harvesting of natural resources in some 6. Economic
intensive process Reforms
and industrial jobs grow at a slow rate
area

4. Improving basic services. •Efforts to alleviate poverty won't be successful without

•Providing basic services is a huge task. a complete overhaul of the economic systems.

•Government seeks to hand over the responsibility •Outdated economic models –lead to the redundancy of
through various forms of privatization. people

•Privatization has pushed up costs of services. •Campaigns to alleviate poverty call for international
assistance.
•Become an innovative world leader in sustainable
development, to create new job opportunities. •The track record of donor suggests that it may benefit
governments more than it benefits the poor.
•Facilitate fair trade to foster a more equal
relationship between nations. 8. Acknowledging Rights
•Scrapping the trade barriers have erected against
•Poverty –lack of power
import from poorer countries.
•Poverty alleviation should address situations in which
7. Alleviating Affluence some people have few opportunities to exercise their
rights.
•Poor people need to consume more environmental
resources. •Recognize the basic rights of the poor to common
resources.
•When we multiply the number of poor, we find that a
mere 20% of the population –the wealthy. •Historical inequalities remain largely untouched by
current economic policy.
•The wealthy –responsible for the bulk of the world's
consumption and population •Unemployment figures are higher among women.

•Global environmental resources –finite and unequally •Women-headed households are more likely to suffer
divided from poverty.

•The over-consumption of the affluent must be

reduced for the low consumers.
9. Education & Capacity- building SOCIO-ECONOMIC IMPACT OF BUSINESS
IN POVERTY ALLEVIATION
•Education and training must help the unemployed,
underemployed, and the youth at risk to move from •Studies show that small businesses make important
being redundant in one kind of economy. impacts on livelihood and serve as an eye-opener
•Capacity-building for government departments must for those who view small business as merely a
deliver on poverty reduction and development.
survival strategy. Small businesses have helped
•K-12 education system in the Philippines
improve the standard of living.
–strengthens the basic education system

–helps alleviate poverty through education •According to Akinwale et al (2017), within the
developed and developing countries of the world, it
is now generally accepted by policy makers at local,
regional, and national levels that small to medium-
sized enterprises are becoming increasingly
important in terms of employment, wealth creation,
and development of innovation.
 International Trade
•International trade is the exchange of goods and services between countries. This type of trade
gives rise to a world economy in which prices, or supply and demand affect and are affected by
global events. Trading globally gives consumer and countries opportunities to be exposed to
goods and services not available in their own countries.

•Almost every kind of product can be found in the international market: foods, clothes, spare
parts, oil, jewelry, wines, stocks, currencies, and water. Services area also trades tourism, banking,
consulting, and transportation (Heakal, 2015).

•Global trade allows wealthy countries to use their resource, whether labor, technology, or capital,
more efficiently. If a country cannot efficiently produce an item, it can obtain the item by trading
with another country. International trade arises from voluntarily exchange among buyers and
sellers pursuing their self-interests (McEachern, 2000).
•World trades offer many advantages to the trading countries: the chance to take advantage of
economies of scale, the opportunity to utilize abundant resources, the improvements that come
with competitive pressure, more ready access to information about markets and technology, and
lower prices for consumers.
 Import
and Export
Import is the purchase of
foreign –manufactured goods in
the buyer’s domestic market.

Export, on the other hand, is

the sales of goods to a foreign
country.

Exporting and importing helps grow national

economies and expand the global market.
 IMPACT OF EXPORT AND IMPORT OF
GOODS AND SERVICES ON THE
ECONOMY
•Imports are important for businesses and individual consumers.
•There are other countries who need to import goods since there are circumstances that the goods
needed are not readily available domestically or are available cheaper overseas and provide more
choices to the consumers.
•Countries want to be net exporters (a country that exports more than it imports) rather than net
importers (a country that imports more than it exports).

Advantage of Net Exporters:

–more domestic economic activity occurs then, more production, jobs, and revenues

–the country’s Gross Domestic Product (GDP) increases

–increases the wealth of a country (Grimsley, 2016)

 •These are taxes imposed on imported goods and services.

TARRIFS Importance
•The world price is the process determined by the world supply and
demand for a product.

•The price at which any supplier can sell output on the world
market and at which any demander can purchase the output on the
1.) To protect domestic Jobs
world market (McEachern, 2000).
If consumers buy less-expensive foreign goods, workers who
produce that good domestically might lose their jobs.

2.) To protect infant industries

If a country wants to develop its own industry producing a

particular good, it will use tariffs to make it more expensive for
consumers to purchase the foreign version of the good.

3.) To retaliate against a trading partner

If one country does not play by the trade rules both countries
previously agreed on, the country that feels jilted might impose
tariffs on its partner’s goods as a punishment. The higher price 4.) To protect consumers
caused by the tariff should cause purchases to fall.
If a government thinks a foreign good might be harmful, it might
implement a tariff to discourage consumers from buying it.
 TARRIFS & TRADING
3.) North America Free Trade Agreement (NAFTA)
AGREEMENT –Individual nations have been negotiating expanded
Davis (1997) states that for the past 50 years, tariffs have
been moving downward on a worldwide scale. economic integration. Both Democratic and Republican
presidents have shown their commitment to an expansion
of a free-trade zone for American import and export.
1.) European Economic Community (EEC)

–The EEC or Common Market grew out of the Treaty of

Rome In 1957. The goal was to lower the trade and other 4.) Multinational Firms
barriers among the members while establishing common
–are those headquarters with one nation and a significant
tariffs against non-members.
presence in another.
2.) Council for Mutual Economic Assistance
(COMECON)

–was founded in 1949 by ten communist countries.

COMECON was disbanded in 1991, when independence
came to Eastern Europe and Soviet republics, and replace
by the Organization for the International Economics
Cooperation.
SOCIO-ECONOMIC IMPACT OF
INTERNATIONAL TRADE
•Group of economists who oppose the International Trade

–They stated that the international trade brought about unfavorable changes in the
economic and financial scenarios of the developing countries.

–Liberalization of trade policies, reduction of tariffs and globalization have adversely

affected the industrial setups of the less-developed and developing economics which
resulted to majority of the infant industries in these have closed their operations and
found it very difficult to compete with their global counterparts.

•Groups of economists who are in favor of International Trade

–According to them, developing countries, which have followed trade liberalization

policies, have experienced all the favorable effects of globalization and international
trade.

–China and India are regarded as the trend-setters in this case (Economy Watch 2017).
“Poverty is not an accident.
It is man-made and can be
removed by the actions of
human beings.”
-NELSON
MANDELA-
ANY QUESTIONS?

-NELSON
MANDELA-
Thank You
and
God Bless!