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Poverty cycles - Coggle Diagram

- - - - Progressive taxation
      - Universal Basic Income (UBI) / Minimum wage- When government imposes a universal basic income, it provides a guaranteed income to all citizens -wages receives is sufficient to meet needs and wants his increases income of unemployed or low-income consumers more incomes,increases purchasing power,increase consumper spending,higher AD,Higher real gdp,increase economic growth
      - Investment in human capital
  - - - Gov charge users for infrastructure services with low prices as part of their policy
      - -Price is not enough to cover the cost
      - -Can't expand infrastructure
      - Low economic growth
      - -lack of revenue
      - -inadequate maintenance and poor quality of infrastructure
      - -low quality services
    - - infrastructure provided may be inappropriate for the needs of population
      - -investment may be overspend
      - -Opportunity cost for other infrastructure
      - -Neglect of the environment(at urban areas)
      - -infrastructure can have negative effect on environment
      - -uncontrolled emission
      - -low water quality
    - - Market based policies-contracting out to private company
      - Foreign aid (ODA)
      - Huminitarian
  - - - developing countries
        
        Large quantities of labour (unemployed or underemployed), while physical capital is relatively scarce and costly to acquire.
        
        Therefore, to operate and maintain technologically advanced equipment in developing countries is limited.
        
        Developing countries need capital goods and technologies that make use of their abundant labour supplies and that are relatively simple to produce, maintain and operate.
      - developed countries
        Labour is relatively scarce if compared with the abundant amount of physical capitals, and there is a large capacity for producing and maintaining technologically advanced equipment and machines.
    - - Interventionist policy-investment in new technology
      - subsidy -lower the cost of production/per unit
        
        When government give grant / tax allowance (kurangkan cukai) for business taxes / tax exemption to firms that do RND,
        
        Firms can improve productivity and efficiency,
        
        Increase AS curve
        
        Shift AS curve to the right
        
        Real GDP increases
  - - - Insufficient funding for education
      - Insufficient teachers or untrained teachers
      - Lack of teaching materials
      - Gender discrimination
      - Hunger and malnutrition
    - - Interventionist policy -Investment in human capital
        
        training and education
        
        women empowerment
        
        multilateral development assisstance
        
        foreign aid
  - - - overspecialise tend to make the country t export primary commodities -primary good PED is inelastic-when exporrted price decrease-revenue for the country decrease-cause exported revenue to fall-economic growth decrease
    - - overspecialise-accumulation on low skill labour worker-income growth slow
  - - - As developing country tend to export primary commodities
        
        When tariff for agriculture good is higher (importing countries want to protect domestic farmers)
        
        Producer of developing country suffer as COP increase
        
        exported good and service decrease
        
        Developing country become less competitive in international market
        
        GDP fall
        
        Economic growth fall
      - Tariff barriers discourage development manufacture and diversification
        
        When developing country would like to change from primary sector to secondary sector to improve economic growth
        
        Developing country would undergo vertical diversification in effort to increase export
        
        This signal developed country to impose higher tariff on manufacturing goods(tariff escalation)
        
        This would cause dilemma for developing countries (x diversification economic growth stagnant,if diversify higher tariff cause exported good more expensive in foreign market )
        
        Developing country would loss competitiveness in developed countries market
    - - Agricultural trade and rich country subsidies
      - When developed countries imposed subsidies in agricultural
      - Price offer by developed countries is less than the world price
      - Price of developed countries is more appealing
      - Most countries would go for developed countries good as it is much cheaper
      - Developing country loss competitiveness in international market as they cannot beat price offer developed countries
    - - economic integration
      - trade liberalisation
  - - - Political Power
        
        When political power is controlled by a few elites, they make policies that benefit only their interests.
        
        These policies often give tax breaks or special regulations to specific industries.
        
        This reduces competition and limits opportunities for smaller businesses to succeed.
        
        As a result, economic growth slows because fewer businesses can thrive.
        
        When power is held by a small group, the majority’s needs are often ignored.
      - Social Class and Status
        
        Social class and status often determine access to resources.
        
        This widens the gap between the rich and the poor, leading to more inequality.
        
        Lower-income individuals have less purchasing power, reducing overall consumer demand.
        
        Less demand slows down economic growth.
        
        When lower-income individuals lack access to education and jobs, they are trapped in poverty.
        
        This limits innovation and productivity, weakening the economy’s growth potentia
      - Racial and ethnic issues
        
        Racial and ethnic discrimination can block certain groups from getting jobs. (gender)
        
        This reduces the overall pool of talent in the economy.
        
        With fewer people contributing, productivity and innovation slow down, hurting economic growth.
        
        Ethnic minorities often face difficulties in accessing education, healthcare, and financial services
    - - Political Power-Interventionist Policies-Redistribution Policies (Progressive tax)
      - Social Class and Status-Institutional Changes-Microfinance
      - Racial and Ethnic-Institutional Change-Women Empowerment-Foreign Aid
      - Political Stability -Foreign Direct Investment -Property Right and land rights