Globalization as it relates to Poverty and Inequality.

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Globalization is integration on the basis of a project pursuing “market rule on a global scale.”(P. McMichael, Development and Social Change, 2000, p. xxiii, 149). In other words, globalization can be simply defined as a social process towards an interconnected and interdependent world in terms of trade, investments, information technology, world views, products and other aspects of culture. The world became global five centuries ago. The rise of the West, the conquest of the Americas, New World slavery, and the Industrial Revolution can be summarized as “a first moment of globality[1].” According to Matt Nesvisky, the link between globalization and poverty is complex as it depends not just on trade or financial globalization but on the interaction of globalization with the rest of the economic environment such as investments in human capital and infrastructure, promotion of credit and technical assistance to farmers and worthy institutions and governance[2]. More so, it should be noted that greater inequality does not mean greater poverty.

There have been many debates on whether or not globalization benefits the poor. For example, in terms of trade, during the mid-1990s Vietnam liberalized its trade which meant that the farmers had no maximum value of rice they could export. This led to a demand for Vietnamese rice which ultimately gained higher profits for these farmers and thus, a higher standard of living. Globalization proved to alleviate the poor conditions these farmers faced and was an avenue for social mobility. In other countries however, globalization was not seen as a benefit due to their lack of economic and political stability. It is noted by many researchers that it is virtually impossible to find cases of poor countries that were able to grow over long periods of time without opening up to trade[3].

The globalists predicted rapid development of Africa, Asia and Latin America, even arguing that divisions between ‘developed’ and ‘developing’ nations, ‘First’ and ‘Third’ worlds, would become less significant and eventually meaningless and additionally, ‘it is the world’s poor who will benefit the most from globalization[4]. It is believed that globalization will result in a better division of labor, allowing developing countries (where labor is abundant) to specialize in labor intensive commodities while permitting developed countries to use their workers in more productive ways (The Economist, 1997a). Globalization is seen to have many positive effects on countries as it assists is curbing their issues of inequality and poverty.

In summation, globalization can be viewed as making both the core and periphery countries more equal although it cannot be the only solution as evidence suggests that relying on trade or foreign investment alone is not enough to lighten the burden of poverty. There is always the need for education, improved infrastructure and trade reforms. Furthermore, a Nobel laureate, Simon Kuznets, argued that growing inequality was inevitable in the early stages of development.  Only with economic development and demands for redistribution would inequality fall. Globalization as it relates to inequality and poverty will always struggle to promote equality within the world’s poorest countries.

-littleusgoneglobal?

-Nandika Ragbir

BIBLIOGRAPHY

Matt Nesvisky, “ Globalization and Poverty,” The National Bureau of Economic Research, accessed 18 February, 2015, http://www.nber.org/digest/mar07/w12347.html.

Nina Pavcnik, “How Has Globalization Benefited the Poor?” (Yale School of management, 2009).

‘The World in 1998’, The Economist, Special Report, December 1997.

Trouillot, Michel-Rolph. 2002. The Perspective of the World: Globalization Then and Now in Beyond dichotomies : histories, identitities, cultures, and the challenge of globalization / edited by Elisabeth Mudimbe-Boyi.

[1] Trouillot, Michel-Rolph. 2002. The Perspective of the World: Globalization Then and Now in Beyond dichotomies : histories, identitities, cultures, and the challenge of globalization / edited by Elisabeth Mudimbe-Boyi.

[2] Matt Nesvisky, “ Globalization and Poverty,” The National Bureau of Economic Research, accessed 18 February, 2015, http://www.nber.org/digest/mar07/w12347.html.

[3] Nina Pavcnik, “How Has Globalization Benefited the Poor?” (Yale School of management, 2009).

[4] ‘The World in 1998’, The Economist, Special Report, December 1997.

Photo Credit:

“Globalization and Poverty.” Youtube video, Posted by “Samatha Linnette.” November 27th, 2014.https://www.youtube.com/watch?v=hnZPP5GGk80

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