Economic Factors of poverty

Many developing countries face tremendous external debt that creates or exacerbates hunger crises. This debt is largely the result of international trade imbalances and mainly affects developing countries in Latin American, Africa, and Asia. Governments must often decide between feeding people and paying off external debt; pressure and threats from lenders often results in persistent hunger and poverty. The disproportionate competition between small family farmers and powerful agribusinesses is an increasingly common cause of hunger and poverty.

Many farmers in developing countries produce cash crops like coffee, cocoa, sugar and cotton for export in order to support their families. However, big agribusinesses are able to shut out any competition from small farmers by buying up the best land, cutting deals with other corporations and governments, and driving prices down so low that small farmers cannot make a living. This is best exemplified by the current coffee crises in Latin America, Asia and Africa, where 25 million farmers are facing economic disaster due to falling coffee prices.


The influence of multinational corporations and other special interests is connected to poverty and hunger in many venues beyond military construction and agriculture. As a result of policies like the North American Free Trade Agreements (NAFTA) and the General Agreement on Tariffs and Trade (GATT), multinational corporations now have more leeway than ever to hire workers at slave wages and pressure foreign governments for favorable treatment at the expense of the public.


In addition, the influence of special interests over foreign aid from countries like the United States negatively affects poor communities; for example, a large amount of U.S. aid goes to fund large infrastructure projects that are often built by U.S. companies and whose profits benefit U.S. shareholders rather than local communities.