Globalization on Improving the Lives of the Ordinary Workers and the Poor

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Has Globalization improved the lives of ordinary workers and the poor? A Comparative essay on the works of Stephanie Seguino and the journal of the World Commission on the Social Dimension of Globalization

Prepared by:

Al Felipe P. Bautista
University of the Philippines, Diliman
October 2012

In answering the question of whether globalization has improved the lives of ordinary workers and the poor, I have referenced on the paper of Stephanie Seguino (2010) entitled “Globalization and Inequality”, and the journal of the World Commission on the Social Dimension of Globalization (2004) entitled “A Fair Globalization: Creating Opportunities for All”. As both dealt with the effects of globalization, these details shall be used in examining whether globalization has significantly led to a development which is fair to all.

Seguino (2010) defined globalization as “a set of macro-level policies and regulations that affect cross-border transactions, resulting in increased interdependence among countries and their citizens.” In an attempt to explain it further, she also described the three key facets of globalization namely: trade, investment and financial liberalization. These have also been regarded by the World Commission on the Social Dimension of Globalization or WCSDG (as how it shall be labeled in this essay) as significant aspects in determining whether globalization has, indeed, been beneficial to all countries. Though Seguino specifically recommended a lot of measures such as the PPP, HDI, and the like to gage the effects, both articles revolve on the perspective that globalization should be able to enhance the living standards of people, whether be it of the formal or informal sector, or even the minorities, and it should foster developmental sustainability.

It was in the year 1990 that globalization was pronounced; however, it was striking to know that the global GDP growth has been slower in comparison with what it was on the previous decades. Uneven distribution of growth between 1985 – 2000 has also been noticed where only 16 countries had more than an annual growth of 3% per capita income and 55 grew at less than 2%, 23 of which suffered negative growth. (World Commission on the Social Dimension of Globalization: 2004)

Though of different approach, where WCSDG (2004) focused on inequality among countries while Seguino (2004) stressed on inequality on both among and within each country,

the two clearly presented that greater inequality is existing and it resulted from globalization. Evidences on both studies showed that the gap between the richest and the poorest countries have widened over the years. Both also identified the developing countries as the ones more adversely affected by globalization. It was even pointed out that the rich countries appeared to have benefited more in terms of the policies the World Trade Organization (WTO) implemented relative to liberalization.

With Foreign Direct Investments (FDIs) coming in, it is believed that more jobs shall be generated; thus, reducing unemployment rate, and through the spill-over effects, which both journals stressed out, the domestic firms shall be able to know more about effective strategies and new technology in raising the level of production. However, such perspective has not fully taken place. Realistically, these Multi-national companies (MNC) had brought with them new technology but together with it comes its Patent Rights. As stipulated in the WTO Trade-related Intellectual Property Rights, the patent rights have been extended from 10 years to 20 years. It simply means that not every technology or idea can be easily acquired, defeating one of the goals of FDI. It may even result to higher prices due to the monopoly rights to the owner of the patent. Not all domestic firms can also match with the products or services these MNCs have. The strong crowding-out effects eventually negates the anticipated flourishing of firms and new...
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