on why globalization helps the poor... foreignaffairs.org;
While I support the notion of more trade and the prospect of a world with a distribution of resources that alleviates more hardship, I'm not buying much of these globalist's arguments.
The aggregate annual per capita growth rate of the globalizing group accelerated steadily from one percent in the 1960s to five percent in the 1990s. During that latter decade, in contrast, rich countries grew at two percent and nonglobalizers at only one percent.
Using per capita income as a quantifier is a no-go. If the top twenty percent of globalizers are making out like bandits, it gets reflected in the per capita rates as well. A clearer test is simply: how many hours/minutes did the folks at the bottom have to work to afford a pair of shoes, 10 years ago vs. now?
Even with its increased inequality, for example, China has seen the most spectacular reduction of poverty in world history -- which was supported by opening its economy to foreign trade and investment.
Spectacular what? What are they referring to? Or is it just an accepted article of faith? And was it globalization per se or simply the rise of the technology era that fuelled the (supposed) change?
trade dramatically expanded among industrialized countries between 1960 and 1980. Most developing countries remained largely isolated from this trade because of their own inward-focused policies
Like lack of resources, drought, disease, etc. has nothing to do with anything.
The change in the nature of capital flows is clearly related to concurrent advances in economic integration, such as cheaper and faster transportation and revolutionary changes in telecommunications.
Agreed.
. The world economy grew strongly between 1960 and 1980, but the number of poor rose because growth did not occur in the places where the worst-off live. But since then, the most rapid growth has occurred in poor locations. Consequently the number of poor has declined by 200 million since 1980. Again, this trend is explained primarily by the rapid income growth in China and India, which together in 1980 accounted for about one-third of the world's population and more than 60 percent of the world's extreme poor.
Again, where are the statistics to quantify this alleged decline?
Of course, China and other globalizing developing countries have pursued a wide range of reforms, not just economic openness. Beijing has strengthened property rights through land reform and moved from a planned economy toward a market-oriented one, and these measures have contributed to its integration as well as to its growth.
At least an admission that other factors were at work, and hard to tell how to distinguish the percentage of causality of A vs. B.
When they start using statistics more heavily towards the end, discussing trade relative to income and import tariff cutting, the percentages fly fast and furious, with nary a source to be cited. Percentages can be distorted to mean anything and this omission makes it harder to see what's up their sleeves.
And the conclusions seem to be admittedly based on the alleged advances in India and China.... the two largest populations in the world with First World government capabilities (militarily, educationally & technology-wise). Extrapolating that and saying it will work for Haiti or Burkina Faso also seems simplistic. Consider such factors as proximity to the equator or anti-democratization: lib.utexas.edu
As well, consider countries with little or no coastlines.
In some countries, income distribution has shifted in favor of the poor; in others, against them. But these shifts cannot be explained by any globalization-related variable. So it simply cannot be said that inequality necessarily rises with more trade, more foreign investment, and lower tariffs.
Nor the converse. Equality does not necessarily rise either.
But the Chinese case is not typical; inequality has not increased in most of the developing countries that have opened up to foreign trade and investment. Furthermore, income distribution in China may have become more unequal, but the income of the poor in China has still risen rapidly. In fact, the country's progress in reducing poverty has been one of the most dramatic successes in history.
Yet it becomes typical when needed to support an argument. The use of Vietnam is better, though again, without citing sources to sustain their claims.....
In addition, industrialized countries still raise protectionist measures against agricultural and labor-intensive products. Reducing those barriers would help developing countries significantly.
Just click your heels together three times and it'll happen.
If globalization proceeds, its potential to be an equalizing force will depend on whether poor countries manage to integrate themselves into the global economic system. True integration requires not just trade liberalization but wide-ranging institutional reform. Many of the nonglobalizing developing countries, such as Myanmar, Nigeria, Ukraine, and Pakistan, offer an unattractive investment climate. Even if they decide to open themselves up to trade, not much is likely to happen unless other reforms are also pursued. It is not easy to predict the reform paths of these countries; some of the relative successes in recent years, such as China, India, Uganda, and Vietnam, have come as quite a surprise. But as long as a location has weak institutions and policies, people living there are going to fall further behind the rest of the world.
BINGO! This is not an aside; this is the essence, imo. Globalization is merely one wheel on a roller skate. Important but not very reliable without other wheels. Add personal liberty, a due-process judiciary, education, at least, for a more stable skate.
Any sort of regulation of labor and environmental standards made under the threat of WTO sanctions would take this requirement for harmonization much further. Such measures would be neoprotectionist in effect, because they would thwart the integration of developing countries into the world economy and discourage trade between poor countries and rich ones.
A major sticking point of anti-globalizers. Sweat shops and toxic dumps are not progress to any but the wealthiest & their accountants.
Towards the end, they finally covers geography and climate and propose the solution of 'just' moving. However, the opening of trade has been accompanied by a closing of immigration. Countries permitting the greatest immigration tend to be very selective, permitting only the highest skilled in, effectively leaving 'the dumbest' behind to further marginalize the poorer regions.
I think most of the pro and anti-globalization arguments I've read are weak. I have no doubt that increased trade grants economic potential. I'm just not sure that NAFTA/GATT create the right avenues or merely a new potholed road offering fresh opportunities for broken axles.
This argument is based largely on changes the authors see in India and China. They do not share the evidence for their 'givens', and it seems the desire to prove globalization works provides us with more opinion than demonstrable fact. |
