Reducing The Number Of People Living In Absolute Poverty

Absolute destitution measures the number of hoi polloi life on a lower floor a certain income threshold or the number of households unable to throw certain basic goods and services. Much of the poverty in developing countries, much(prenominal) as siemens Africa, tends to be positive poverty. Economic growth mess be defined as steady growth in the ample capacity of the economy.Short edge growth is measured by the annual fortune change in current national output, which is affected by crackings in short disembowel aggregate supply curve (SRAS), whilst long term growth is shown by the change magnituded in potential growth quarter is illustrated by an outward shift in a rustics long run aggregate supply curve (LRAS). Whilst a rise in tangible GDP can lift millions of people out of strong poverty, a simplification in the number of people documentation in infinite poverty can help to achieve frugal development. In golf club to reduce the number of people living in ab solute poverty, they would adjudge to get jobs in order to gain a living.This means that people would use up more than disposable income, thus increasing consumption which is a factor of aggregate beg and would in that locationfore shift the aggregate aim curve to the right, causing stinting development. This would in like manner mean that the government would also fork up more m aney which can be used to rate in education and training or other forms of excreteing. A neglect of education and training is what keeps people in absolute poverty as it prevents them from getting jobs and moving up, however, if education and training were to increase, more people would be getting jobs, thus increasing real GDP whilst resulting in economic growth.Furthermore, government spending is also a instalment of the aggregate prerequisite formula and whence an increase in that would result in an increase in aggregate demand, thus causing an outward shift in the SRAS whig would eventuall y result in economic development. Gold and diamond are the major exports from conspiracy Africa although agricultural products are also exported. If the government were to spend their money on training in mining, those who were living in absolute poverty could get jobs as miners and not only wouldthis increase the real GDP of South Africa, but it would also increase exports which is another component on aggregate demand, thus again resulting in economic development. South Africa has debts similar to many other developing countries which are burdened with external debt which they cannot afford to pay and which acts as a chasteness to economic development. However, if there was a reduction in the number of people living in absolute poverty in South Africa, the government would have more money to repay their debts.Poor foundation make it hard for a hoidenish to suck foreign and domesticated authorisement thus providing a control on long term growth potential. The government c ould also invest the money which would have originally gone towards those in absolute poverty in infrastructure and healthcare. Better healthcare would mean that South Africa would have a more reliable workforce and an improvement in infrastructure would mean that workers would be getting to work on time and it would be easier to travel.These are qualities which attract foreign and domestic investment this would result in more jobs available, thus increasing employment as well as the real GDP of South Africa. Corruption and suffering governance is one of the causes of absolute poverty, however, it is also a significant factor for a constraint on economic growth. High levels of deeply embedded corruption and bureaucratic delays can harm growth in many ways for role model inhibiting inward investment and also making it more likely that domestic businesses will invest overseas rather than at home.Governments charter a stable and effective legal framework to collect taxes to pay for ordinary services. However, in order to reduce the number of people living in absolute poverty, corruption would have be to decreased, thus resulting in economic development. Many poor countries have governments which are not democratically elected. Countries much(prenominal) as South Africa tend to spend money raised done taxation unwisely deceaseing to government failure and thus incur it difficult to attract FDI. However, a correction in corruption and poor governance would mean that South Africa may be able attract FDI, thus increasing the real GDP and resulting ineconomic development. South Africa is a primary-sector economy, which produces coin and agricultural goods and is therefore primarily product dependent. Primary product settlement is a constraint on economic development. The dependency makes South Africa genuinely vulnerable in the event of natural disasters. Furthermore, downward price fluctuations caused by exchange rate movements or variable harvests can ha ve a devastating impact due to the low price elasticity of demand for primary products.Moreover, the Prebisch-Singer hypothesis claims that countries that specialise in primary products, such as South Africa, face declining terms of trade within time. This is because prices of primary products have declined over the long term due to increases in productivity in agriculture and less demand for other commodities. In addition, as the boorish gets richer over time dmand for secondary and tertiary products increases whilst demand for primary prices rises by only a little due to its low income elasticity of demand.As a result, prices of manufactured goods and services rise relative to prices of primary products. This means that the country which is specialising in primary products experience declining terms of trade as the income they stick from their exports buys fewer imports over time. However, investment in education and training as well as FDI in South Africa would mean that it wou ld not be such a subsistence economy. Many sub-Saharan economies, such as South Africa, are severely affected by droughts followed by flooding, making it difficult to establish any industry and attract any foreign transport investment.However, if there is a decrease in the number of people who need aid and support, the money raised by charities and the money the government originally used to support those in absolute poverty could instead by used fix any damages caused by bad defy conditions which means that not only would the country come across as more appealing to FDIs, it would be easier to go crops, thus increasing exports and therefore snuff iting to economic development as this results in an outward shift in the aggregate demand curve.To conclude, all the factors above depend on the number of people who are no longer in absolute poverty the less people in absolute poverty in a country, the more economically developed the country is going to be and therefore it depends on t he magnitude. Economic development is an increase in living standards which could be measured by an increase in income per capita, life expectation and access to education and healthcare.Despite it being difficult to say whether a reduction in the number of people in absolute poverty would lead to economic growth because it is unknown whether that means that they would immediately get a job, thus increasing GDP, resulting in economic growth, it is safe to say it would lead to a rise in economic development as their living standards would increase as they are no longer living in absolute poverty and can therefore afford necessities.