Poverty Paper

When asked to do a "Poverty Paper" you must first select two countries with enough data to discuss, but also two differing countries that way there is some sort of conflict between the two poverty levels. With 195 different countries to choose from we chose Mexico and South Africa. I realize that these two countries are very diverse geographically, economically, and socially. But that is the reason we chose them, they will have many differences to compare and contrast. Because poverty is such a relative topic it is really difficult to find a good comparison, with that being said a background of each country must me laid out first. But before that happens we need to understand what poverty is. Poverty is the state of not having enough money to take care of basic needs such as food, clothing, and housing. Poverty is not just that basic definition, it is much more than that, and there are many different levels of poverty. To get started we first need to have a little background to each of our countries.

South Africa is located on the very southern tip of Africa and the nation's capital is Pretoria. South Africa is 25th ranked nation it terms of population, with the population of roughly 49 million. South Africa is a very diverse country, its diverse in its races but also in its languages and religions. The population of South Africa is broken down by race in the following percentages: Black 88%, White 9%, Indian/Asian 3%. The religion breakdown is as follows: Zion Christian 11.1%, Pentecostal 8.2, Catholic 7.1, Methodist 6.8%, Dutch Reformed 6.7%, Anglican 3.8%, Muslim 1.5%, other Christian 36%, undefined 3.7%, and None 15.1%. It's hard to believe but the official language of South Africa is English even though only 8.2% of the population speak it, the most common language is IsiZulu which is spoken by 23.8% of the population. South Africa was first discovered in 1652 when Dutch traders landed in what is now called Cape Town. They used this area as a stopping point for the spice route between the Netherlands and the Far East. From 1652 to present there have been activities and problems in the country of South Africa. Over the years there have been many wars, many of the wars happened in the 1800's when the British were present. Most problems that happened in South Africa were due to racial tensions, the country is primarily white and black, with the white being the wealthy side of the economy. South Africa still has problems with racial tension now because of such a large income and poverty gap. On the economical side of South Africa is ranked 26th in the world when it comes to GDP, their GDP is $527.5 billion. Their GDP per capita is ranked 105th in the world at $10,500. When we talk about poverty in South Africa it's a whole different story, 57 percent of population is below the poverty line. Another ridiculous statistic is that South Africa's unemployment rate is ranked 174th in the world, its rate is 23.3%. The GINI Index for South Africa is 57.8, which is second worse in the world only to be behind Namibia which is at a roaring 70.7. Overall South Africa has an extremely large population below the poverty line and a large upper class. Basically in South Africa there is no middle class, you are either wealthy or struggling to survive.

Mexico is located in the southern part of North America and the nation's capital is Mexico City. Mexico is ranked 11th in population, with its population right around 113 million. Mexico is not a really diverse country race wise like South Africa is. Mexico's race percentages are as follows: Mestizo (American Spanish) 60%, Amerindian 30%, White 9%, other 1%. Mexico is also not as near diverse in the religion aspect as South Africa is. Mexico's religious breakdown is as follows: Roman Catholic 76.5%, Protestant 6.3%, unspecified 13.8%, and none 3.1%. The official language of Mexico is obviously Spanish; it is spoken by 92.7% of the nation. The other 7.3% is made up by several different indigenous languages which most don't even have a name. Mexico's history started in the 1600's when the Spanish moved in the territory, they held rule for around three full centuries, and it wasn't until the early 1900's when Mexico actually gained its independence from the Spanish. Over the years Mexico has been threw many ups and downs economically. A lot of that has been to do with the very unstable government and the inconsistency in the government. But in 2010 Mexico was ranked 12th in the world with its 1.56 trillion dollar GDP. This has a lot to do with not only the size of the country but also the size of the free market that they deal with. Even though Mexico has a much larger economy then South Africa does they still have a poverty problem, not quite as bad as South Africa's but it is still a pretty severe problem. The unemployment as we know is large statistic when it comes to poverty, and Mexico's unemployment rate is 5.5%. Even though this is not a large number it is still ranked 55th in the world. Mexico like we said earlier is not near as bad as South Africa in terms of poverty is still fighting the problem with their 18.2% of the population being under the poverty line. The leading statistic for signs of poverty in a country is the GINI Index and the GINI in Mexico as of 2008 is ranked 27th in the world with the index of 48.2. As you can see the poverty problem in Mexico is nowhere near as bad as the problem in South Africa but it still is a problem that needs to be dealt with.

In the overview of South Africa and Mexico the GINI index was mentioned multiple times. What is the GINI index? The GINI index or the GINI coefficient was named after Corrado Gini, who published it in 1912. It is taken from a statistical formula based off the Lorenz curve that shows the degree of evenness and unevenness of a set a numbers between 0 and 1 or 0 and 100 depending on the scale. In terms of poverty or income in a country a GINI index of 0 would signify perfect equality of everyone, basically everyone would make the same amount and there would be no poverty problems. A GINI index of 1 or 100 would symbolize that one person held all the money and that everyone had absolutely no money. Essentially what this is saying is that the lower the GINI index is the more equal the distribution of the funds is throughout the country. And the opposite applies the higher the index, so if it's higher the funds of the country are more if a few individuals' hands and a lot of people have nothing. Economists typically consider a good GINI index to be somewhere between 25 and for 40. To put the GINI index into perspective the United States GINI index is 47. The GINI index of the United States has been on the steady rise for the last 40 years, if the trend continues the GINI index for the United States will raise to 55 within in the next 40 years this will

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