Why globalisation may not reduce inequality in poor countries - See more at: http://www.economist.com/blogs/economist-explains/2014/09/economist-explains-0#sthash.jkAt7WR5.dpuf

There is no question that as more and more countries experience globalization the economic gap between countries is closing. However, this is not necessarily the case within these developing nations. In fact, they are experiencing greater economic inequality, which is visible in their increasing Gini index numbers. The Gini index is a measurement of inequality that ranges from zero (total equality) to one (all the wealth in a nation is in the hands of one individual). Countries in sub- Saharan Africa and China experienced increased Gini index numbers over the past two decades while simultaneously becoming more equal with other countries in the global market. The main question this phenomenon poses is whether it is the fault of globalization; most economists say it is not.

Usually, as countries develop, their economic inequality falls due to comparative advantage. Because inequality is actually increasing in these poor nations, economists are reevaluating the situation. One explanation for this phenomenon, economists think, is outsourcing. Unlike popular belief, workers in countries such as Vietnam who work in subcontracting factories are actually among the top 20% of the nation. This is because outsourcing nations actually hire skilled workers instead of the stereotypical poor, uneducated worker. Furthermore, people in these positions are able to work and come in contact with managers and business executives, furthering their productivity. These are opportunities that local employees simply don’t get.

            Economists continue to develop theories as to why this phenomenon is occurring but one thing is for sure, globalization isn’t helping to improve economic inequality within developing nations