Of the more than million Chinese lifted above the international poverty line between and , three fourths got there by Similarly, rural poverty reduction in India may be attributable to the spread of the Green Revolution in agriculture, government antipoverty programs and social movements--not the trade liberalization of the s. In Indonesia the Green Revolution, macroeconomic policies, stabilization of rice prices and massive investment in rural infrastructure played a substantial role in the large reduction of rural poverty.
Of course, globalization, by expanding employment in labor-intensive manufacturing, has helped to pull many Chinese and Indonesians out of poverty since the mids though not yet as much in India, for various domestic institutional and policy reasons. But it is only one factor among many accounting for the economic advances of the past 25 years.
Those who are dubious of the benefits of globalization point out that poverty has remained stubbornly high in sub-Saharan Africa. Between and the fraction of Africans living below the international poverty line increased from 42 to 47 percent.
But this deterioration appears to have less to do with globalization than with unstable or failed political regimes. If anything, such instability reduced their extent of globalization, as it scared off many foreign investors and traders. Volatile politics amplifies longer-term factors such as geographic isolation, disease, overdependence on a small number of export products, and the slow spread of the Green Revolution [see Can Extreme Poverty Be Eliminated?
Poor people everywhere are handicapped by their lack of access to capital and opportunities to learn new skills. Workers in some developing countries--say, Mexico--are losing their jobs in labor-intensive manufacturing to their counterparts in Asia. At the same time, foreign investment has also brought new jobs. Overall, the effect appears to be a net improvement.
In Mexico, low-wage poverty is declining in the regions that are more involved in the international economy than others--even controlling for the fact that skilled and enterprising people migrate to those regions, improving incomes there independently of what globalization accomplishes. A recent study by Gordon H. Hanson of the University of California, San Diego, which took into account only people born in a particular region thus leaving out migrants , found that during the s average incomes in the Mexican states most affected by globalization increased 10 percent more than those least affected.
In poor Asian economies, such as Bangladesh, Vietnam and Cambodia, large numbers of women now have work in garment export factories. Their wages are low by world standards but much higher than they would earn in alternative occupations. Advocates who worry about exploitative sweatshops have to appreciate the relative improvement in these women's conditions and status. An Oxfam report in quoted Rahana Chaudhuri, a year-old mother working in the garment industry in Bangladesh:. This job is hard--and we are not treated fairly. The managers do not respect us women.
But life is much harder for those working outside. Back in my village, I would have less money. Outside of the factories, people selling things in the street or carrying bricks on building sites earn less than we do. There are few other options.
Of course, I want better conditions. But for me this job means that my children will have enough to eat and that their lives can improve. They discovered that the average monthly income of workers in garment-export factories was 86 percent above that of other wage workers living in the same slum neighborhoods. Another indication of this relative improvement can be gauged by what happens when such opportunities disappear.
In , anticipating a U. About 10, children went back to school, but the rest ended up in much inferior occupations, including stone breaking and child prostitution. That does not excuse the appalling working conditions in the sweatshops, let alone the cases of forced or unsafe labor, but advocates must recognize the severely limited existing opportunities for the poor and the possible unintended consequences of fair trade policies.
Globalization of Poverty and Inequality
Even when new jobs are better than the old ones, the transition can be wrenching. Most poor countries provide very little effective social protection to help people who have lost their jobs and not yet found new ones. Moreover, vast numbers of the poor work on their own small farms or for household enterprises. The major constraints they usually face are domestic, such as lack of access to credit, poor infrastructure, venal government officials and insecure land rights. Weak states, unaccountable regimes, lopsided wealth distribution, and inept or corrupt politicians and bureaucrats often combine to block out the opportunities for the poor.
Opening markets without relieving these domestic constraints forces people to compete with one hand tied behind their back. The result can be deepened poverty.
Globalization and Poverty | Growth and Crisis
Conversely, opening the economy to trade and long-term capital flows need not make the poor worse off if appropriate domestic policies and institutions are in place--particularly to help shift production to more marketable goods and help workers enter new jobs. Contrasting case studies of countries make this quite apparent. Although the island economies of Mauritius and Jamaica had similar per capita incomes in the early s, their economic performance since then has diverged dramatically, with the former having better participatory institutions and rule of law and the latter mired in crime and violence.
South Korea and the Philippines had similar per capita incomes in the early s, but the Philippines languished in terms of political and economic institutions especially because power and wealth were concentrated in a few hands , so it remains a developing country, while South Korea has joined the ranks of the developed. Botswana and Angola are two diamond-exporting countries in southern Africa, the former democratic and fast-growing, the latter ravaged by civil war and plunder.
The experiences of these and other countries demonstrate that antipoverty programs need not be blocked by the forces of globalization. There is no race to the bottom in which countries must abandon social programs to keep up economically; in fact, social and economic goals can be mutually supportive.
Land reform, expansion of credit and services for small producers, retraining and income support for displaced workers, public-works programs for the unemployed, and provision of basic education and health can enhance the productivity of workers and farmersand therebycontribute toa country's global competitiveness.
Such programs may require a rethinking of budget priorities in those nations and a more accountable political and administrative framework, but the obstacles are largely domestic. Conversely, closing the economy to international trade does not reduce the power of the relevant vested interests: landlords, politicians and bureaucrats, and the rich who enjoy government subsidies. Thus, globalization is not the main cause of developing countries' problems, contrary to the claim of critics of globalization--just as globalization is often not the main solution to these problems, contrary to the claim of overenthusiastic free traders.
What about the environment? Many conservationists argue that international integration encourages the overexploitation of fragile natural resources, such as forests and fisheries, damaging the livelihoods of the poor. A common charge against transnational companies is that they flock to poor countries with lax environmental standards. Anecdotes abound, but researchers have done very few statistical studies.
It found very little evidence that companies chose to invest in these countries to shirk pollution-abatement costs in rich countries; the single most important factor in determining the amount of investment was the size of the local market. Within a given industry, foreign plants tended to pollute less than their local peers. Like persistent poverty, lax environmental standards are ultimately a domestic policy or institutional failure. A lack of well-defined or well-enforced property rights or regulation of common property resources often leads to their overuse.
Responding to pressure from powerful political lobbies, governments have deliberately kept down the prices of precious environmental resources: irrigation water in India, energy in Russia, timber concessions in Indonesia and the Philippines. The result, unsurprisingly, is resource depletion.
To be sure, if a country opens its markets without dealing with these distortions, it can worsen the environmental problems. In many areas, advocates in both camps see the potential for coordination among transnational companies, multilateral organizations, developing country governments and local aid groups on programs to help the poor.
Going beyond the contentious debates and building on the areas of emerging consensus and cooperation, international partnerships may be able to make a dent in the poverty that continues to oppress the lives of billions of people in the world. Here are some measures under discussion.
Capital controls. The flow of international investment consists both of long-term capital such as equipment and of speculative short-term capital such as shares, bonds and currency. The latter, shifted at the click of a mouse, can stampede around the globe in herdlike movements, causing massive damage to fragile economies.
The Asian financial crisis of was an example. Following speculators' run on the Thai currency, the baht, the poverty rate in rural Thailand jumped 50 percent in just one year. In Indonesia, a mass withdrawal of short-term capital caused real wages in manufacturing to drop 44 percent. Many economists including those who otherwise support free trade now see a need for some form of control over short-term capital flows, particularly if domestic financial institutions and banking standards are weak.
Globalization and pollution essay pdf
It is widely believed that China, India and Malaysia escaped the brunt of the Asian financial crisis because of their stringent controls on capital flight. Economists still disagree, though, on what form such control should take and what effect it has on the cost of capital. I first present evidence suggesting that globalization benefits the developing countries and the poor. A second opinion argues against globalization, linking it to financial crises and negative effects on the agricultural sector.
Finally, some authors find both positive and negative outcomes of globalizing. Overall, I conclude that globalization unambiguously benefits the poor only together with complementary pro-poor policies. This extended essay examines the impacts of identity theft surveying previous studies focusing on the social harm caused and suggests possible ways to protect personal information and prevent identity theft. The majority of the articles show that policy changes have a positive influence on identity theft, although sometimes not as significant as the policy makers expect.
The proposal is that legislation that would treat consumer protection as a public good would be beneficial. Simon Fraser University.