Tuesday, May 3

Globalisation and Poverty

I seriously doubt if the benefits of "Globalisation" will ever directly affect the poor in any 3rd world country. Globalisation in my opinion serves as a catalyst in many ways - it opens up markets, trading opportunities, sharing of technologies, etc. however it halts at the local government level. Those who understand the benefits of globalization get into the game early but those who are handicapped by their own lack of education, infrastructure and responsible leadership can only but wait for someone more privileged to uplift them. This can happen only at the local level not at the global level. When Vinoba Bhave (even before Gandhi) worked for the upliftment of the Harijans in the Hindu society, there was no globalization; today when thousands of social workers dedicate their own time, effort and money in to help bring electricity or education or freedom of speech/religion/etc. to the poor in various quarters of the third world, there is no globalisation effect that drives it. It is (1) the desire of those who want to move up combined with (2) good willed and benevolent volunteers. Tying it all back together, I think Globalization plays a role in the sense of raising awareness of the poor to a larger audience, thereby theoretically increasing the possibility that more volunteers may come forward to help them. But thats about it.

A more current example is China. There is little argument that China is fiercely and aggressively becoming a dominant economic force in the world as a direct result of their open-ness to globalization. And yet at the same time it is also well reported that China's poor, rural population still waits to benefit from the massive inflow of capital, job creation and outflow of manufactured goods. The proponents always make it a point to point out that there is job creation which directly affects the poor - but blindly discount the displacement of workforce and skill-sets at such a grand scale. A farmer who now has to weave wicker baskets because thats where the money is does not equate to a new job. A school teacher in a village school who now transcribes medical records is not a new job. It is, in my opinion, a zero sum game. Yet another argument is that Globalization helps the new members who enter the workforce. While this argument holds some ground, it stears away from the topic of addressing poverty.

An argument can even be made that it is raising the gap between rich and poor in the world.


Blogger chompi said...

From Rajesh -

Rajesh said...
We maybe digressing a bit from the main purpose of the blog but I think in the bigger picture they're all related. I liked what you wrote and I agree till we can have more people committing themselves to the social cause the gap between poor and rich will continue to widen.

But globalization can play some role in making it happen. China's poverty level has gone down after they opened up their economy as this article in Economist argues(unfortunaltely most of the articles from this survey are only available to the subscribers):
"Some of the main reasons for China's better performance have nothing to do with the political system. When China started its reforms, in 1978, it was poorer than India. Part of the gap now is due simply to that earlier start. But also, unreformed China seems to have done a more impressive job than India did in educating and providing health care for its poor. Reforms benefited from what economists call “good human capital”, and from a bulge in the working-age population that India itself is now experiencing."

In one of the articles in this survey, they make a point that globalization is affecting both coutries but in different ways. In China, it started with manufacturing which is providing employment to poor and unskilled labor but India bypassed the steps and jumped directly into the service sector which is mainly benefitting the educated middle class. India has a lot of catching up to do to compete with China in manufacturing at the same time to continue to grow in the service sector.

3/5/05 9:38 PM

10:43 AM  

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