Is globalization widening or narrowing the

Related Stories Asia's Economic Strength at New High inDespite Jitters at Year's End Despite a sudden plunge in stock prices in December, Asian economies, led by China and India, were among the most dynamic in the world - with many expanding by well over six percent in By contrast, unskilled workers, or poor ones in rural areas, tend not to have such opportunities.

why is the gap between rich and poor countries widening?

Overall, technological progress and FDI are associated with higher growth, and their disequalizing effect reflects an increase in the returns from acquiring higher skills.

Whereas trade globalization has helped reduce inequality, financial globalization—and foreign direct investment FDI in particular—has tended to increase it.

Usually, economists say no. But within many developing economies, the story is less rosy: inequality has worsened.

how has globalization increased the gap between rich and poor countries

Thailand is a big rice exporter, for example, while America is the world's largest exporter of financial services. In developing countries, however, technology has been the main driving factor of the increase in the Gini, with globalization actually providing a small counterweight.

Globalisation favours the rich

The paper points out that, according to World Bank researchers, Indonesia, Bangladesh, Uganda and Vietnam have all succeeded in sharply reducing poverty over the last decade. For the most part, the rich countries are rich because they had a particular history of industrial development. Key points The issue: Is there a link between the increase in inequality seen in most countries and regions over the past two decades and the unprecedented integration of the world economy through the globalization of trade and finance? Richard Jolly, a British economist and the report's main author, said the report is neither anti-American nor anti-free market. Those that have been marginalized as a result of war or bad government are invariably the ones that have been left behind. Share via Email Globalisation has reduced the bargaining power of unskilled workers and pushed up inequality in many western countries, the OECD said yesterday, urging governments to improve their social safety nets. Nonetheless, many economists concede that regardless of a country's savings rate, the poorest families need all of their income just to meet basic needs and are unlikely to save. Only in a few places has it fallen. The figures run only to , though, since when inequality in the UK has increased on the government's own measures. Higher FDI inflows have increased the demand for skilled labor in developing countries, whereas outward FDI in advanced economies has reduced the demand for relatively lower- skilled workers in these countries. Services cost much less in developing countries. And it says that the United States has more computers than the rest of the world combined. For advanced economies, rising imports from developing countries are associated with declining income inequality, presumably through the substitution of lower paying, low-end manufacturing jobs in advanced economies with higher-paying service sector jobs such as retailing and consumer finance.
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Gap between rich and poor widens