Globalization Generates Poverty

Topics: World Bank, Poverty, Infant mortality Pages: 6 (1917 words) Published: April 11, 2005
What can two dollars buy you? A small coffee at Starbucks, a candy bar, bag of chips, and a soda, a slice of pizza. For nearly three billion people, approximately half of the world's population, two dollars a day is all the money that the person has to live on. Moreover, of the 2.2 billion children in the world, 1 billion grow up in poverty; 640 million without adequate shelter, 400 millions with no access to safe water, and 270 million with no access to health services (UNICEF 2005). One proposed reason for this harsh reality of high poverty rates is globalization - the growing integration of economies and societies around the world. The claim that globalization generates poverty has been the focus of many debates for the last twenty years, including the debate between Carlos Caretto, Gillian Crowl, Steve Grossman, and Annie Wong on February 21, 2005. Caretto and Crowl argued that poverty is an indirect result of globalization as is evident by high unemployment rates, wage inequality, and diminishing health and educational programs. Grossman and Wong contended that globalization does not generate poverty, but it in fact helps the world by promoting education, decreasing and shortening the length of wars, and increasing new resources. Close examination of the facts presented in lectures, readings, and the debates shows that each side presents logical evidence, but the facts confirm that globalization does in fact generate poverty. Globalization does have positive effects that are felt throughout the world. If we look at the latter part of the 20th century alone, the evidence that globalization reduces poverty is overwhelming. Looking at a variety of measurements – poverty, life expectancy, health, education – more people have become better off at a faster pace in the past sixty years than ever before. And according to the World Bank, trade enabled the developing countries to grow at a rate of 4.3 percent per year during the 1990s, twice the rate of the developed world. As stated by Kanbur, "there is no question that there is now broad agreement that education and health outcomes are on par with income in assessing poverty and the consequences of economic policy" (2001). Globalization is a vital process toward transferring knowledge and education to the world as people from different regions, cultures, and knowledge bases interact with each other. As pointed out by the debaters in class and by George Russell of the Seattle Initiative "it is clear that without the major reduction of world poverty heralded by continued global expansion, violence and war will continue" (Russell 2004). This point is also endorsed by Stiglitz who stated:

One possible consequence of increases in economic globalization might be decreases in the danger of war. The argument in favor of this proposition begins with the point that as economic interconnections between two countries increase, each achieves greater welfare, and therefore each country develops a progressively a greater stake in the continuation and intensification of interconnections with its partner. The second step in the argument is that because war would lead to a breakage of their mutually profitable and beneficial economic contacts, partners have a progressively stronger incentive not to permit any particular political or diplomatic disagreement to escalate to military conflict. In general, then, as economic interdependence between two countries goes up, each nation's incentives to manage and resolve disputes short of war also go up, with the result being a lower overall danger of war as the world experiences intensified economic globalization (2000).

Grossman and Wong as elaborated on the fact that globalization will lead to new resources which "allows a country to capitalize on resources that would otherwise not be valuable… [and] as a results countries can grow their economies… in ways that were not possible before" (2005). Grossman, Wong, and many others who advocate...

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