Poverty gains in the welfare of mankind. On

Poverty is generally explained as the situation in which a person lacks a certain amount of material possessions or money.

It is a condition in which a group of people or a single person lacks the essential needs to have a minimum standard of living in the society (Lister,2004). The United Nations defines poverty as the inability of getting choices and opportunities. The United Nations sees this a violation of human rights as the lack of basic capacity to participate effectively in society results in insecurity, powerlessness and exclusion of individuals, households and communities into the societies’ mainstream (Hardy Loh Rahim, 2014). Debates on globalization and poverty makes different views. Many people view globalization as an engine of growth that lead to unprecedented gains in the welfare of mankind. On the other hand, many have a different view which consider globalization made a negative impact on the poverty fighting by preventing many poor people from sharing the benefits of globalization and trade.

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Greater openness tends to be associated with greater volatility and economic shocks, which affect the vulnerable and the poor households harder and deepens poverty and income inequality. There is some evidence that the poor are hurt more during contractionary periods than they benefit from expansionary periods. For example, the asian financial crisis hit hardest the poor households in the urban areas in 1997. The poor are often not well positioned to take advantage of new opportunities opened up by the increase in the flow of information world-wide. Wage gap is another aspect which was affected negatively by globalization. Globalization worsen income inequality more as production process is divided and some part is transferred to foreign countries by outsourcing (Feenstra, 1999).In Saudi Arabia, many corporations started to outsource call center operations to other countries which made a lot of local workers jobless. This was obvious in the years 2000-2010 as a way to reduce cost and increase profits.

This lead to many unemployed people to work for less wages. At the same time when Saudi Arabia government signed the free trade agreement, many multinational companies started their offices in Saudi Arabia, but it was difficult to hire local people because of the language barrier and missing skills. I have to mention that poverty rates in Saudi Arabia is consider among the ten lowest poverty rates in the world (Saudi Gazette, 2013).I suggest careful analysis and deep study to every case before shaking off things. It is wise to invest more time and effort in the information gathering and local market before introducing any changes in the economic strategy of the state.


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