Thursday, March 25, 2010

Global Poverty Rates: Slumdog Declines On Deepening Globalization

The Economist gives us a good news: poverty rates (in %), as signified by slum dwelling, has been declining around the world, since 1990.


According to the Economist,

``THE proportion of the world’s urban population living in slums
has fallen from nearly 40% a decade ago to less than a third today. China and India have together lifted 125m people out of slum conditions in recent years. North Africa’s slum population has shrunk by a fifth. But the absolute number of slum dwellers around the world, estimated to be some 830m, is still rising. And in a few countries the share of the urban population in slums has also grown. In Zimbabwe, economic collapse and the forced relocation of urban dwellers have lifted the urban slum population. In Iraq, as a result of conflict, the number of people living in slums tripled in ten years." (emphasis added)

True, the absolute numbers have been rising but the % rates have materially declined.


However, since trade and the GDP has been highly correlated, the principal cause of such decline is most likely due to economic freedom or greater trade (globalization).

According to
the WTO, ``Data in real terms show that world gross domestic product (GDP) and world merchandise exports not only move in tandem, but that export growth exceeds GDP growth. Growth of world GDP is associated with an even higher growth in international trade."

Here are some WTO charts...


Merchandise exports and GDP in % annual change (line chart)


Merchandise Exports and GDP (same data but in bar charts)


The distribution or ratio of exports and goods and commercial services to GDP 2007 as seen in via map
Finally, from Heritage Foundation the relationship of economic freedom (freer trade) to GDP.

This is what the protectionists want to reverse, yet sanctimoniously claim the moral high grounds!

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