How does poverty impact international economic development?

Poverty hampers international economic development by limiting human capital, reducing productivity, and creating economic instability.

Poverty, particularly in developing countries, can significantly impact international economic development. One of the primary ways it does this is by limiting human capital. Human capital refers to the skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organisation or country. In impoverished areas, access to quality education and healthcare is often limited, which can result in a less skilled and less healthy workforce. This, in turn, can limit economic growth and development, as a skilled and healthy workforce is a key driver of productivity and innovation.

Moreover, poverty can reduce productivity. When individuals are living in poverty, they often lack access to the resources necessary to be productive, such as adequate nutrition, safe housing, and reliable transportation. This can lead to a cycle of poverty, where individuals are unable to escape poverty due to their reduced productivity, which in turn further reduces their productivity. This cycle can have a significant impact on economic development, as productivity is a key driver of economic growth.

Poverty can also create economic instability. When a large portion of a country's population is living in poverty, it can lead to social unrest and political instability, which can deter investment and hinder economic development. Additionally, poverty can lead to increased crime rates, which can further destabilize an economy and deter investment.

Furthermore, poverty can exacerbate income inequality, which can also hinder economic development. High levels of income inequality can lead to social tension and political instability, which can deter investment and hinder economic growth. Additionally, high levels of income inequality can limit economic mobility, which can further exacerbate poverty and hinder economic development.

In conclusion, poverty can have a significant impact on international economic development. It can limit human capital, reduce productivity, create economic instability, and exacerbate income inequality, all of which can hinder economic growth and development. Therefore, addressing poverty is not only a moral imperative, but also an economic one.