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GLOBALIZATION AND IR

GLOBALIZATION AND IR. Globalization, Poverty, and Development. Are less people living in poverty now than they were 10-20 years ago? Are global poverty and inequality best measured in country or class specific terms?

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GLOBALIZATION AND IR

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  1. GLOBALIZATION AND IR Globalization, Poverty, and Development

  2. Are less people living in poverty now than they were 10-20 years ago? • Are global poverty and inequality best measured in country or class specific terms? • What, if any, are the ‘solutions’ to the problem of global poverty and inequality?

  3. Empirical indicators contested • World Bank (only org. that provides global statistics on poverty) • WB estimates (Dollar and Kraay 2002 study) reduction in global poverty and inequality • 1.5 billion in 1980 – less than $1/day (40% of population in developing countries) • 2001 – 21% of population

  4. Others at WB say 1988-1993 – world income inequality is increasing • Of 6 billion, 2.8 billion live on $2/day, (45% of population) 12% live on $1/day. • US, Europe and Japan are 100 times richer on average than Ethiopia, Haiti and Nepal

  5. Contestation over • Measurement/methodology • Conceptualization of poverty • WB income measure ($1/day) lacks conceptual foundation • $1/day – purchasing power parity • Value of goods - $1 in US in early 1990s

  6. Lacks conceptual basis • access to shelter, food, education missing from notion of poverty • Bias in methodology underestimates incidence of global poverty • Economistic notion of poverty • Social element lacking

  7. Amartaya Sen’s Capability approach • Goods not important in themselves • But key question is the ‘doings and beings’ necessary to functioning they enable • Social standards of worthiness/decent life • Working poor outnumber non-working poor in developed world (i.e despite access to income)

  8. Inequality • Measured through surveys of household income • Gini coefficient – number between zero and one (Zero – in which each member received same income, 1.0 for a country in which one member received all the income).

  9. 0.25 for historically egalitarian countries like Bulgaria, Finland, Hungary, Japan, and Sweden • 0.6 for highly skewed distributions – Brazil, Chile, Guatemala, Nicaragua, Sierra Leone, • USA 0.35 in 1970s to 0.40 in 1990s • (see World Income Inequality Database)

  10. REASONS for global poverty and inequality • Max Weber – culture/work ethic • Neo-classical economics • Marx’s critique of capitalism, simultaneous production of wealth and poverty • Dependency theory, development and underdevelopment

  11. Unequal Exchange theory • Terms of Trade (higher prices for manufactured goods, lower prices for agricultural goods in world market) structural asymmetry reproduced

  12. SOLUTIONS? • Foreign Aid, Debt Relief from rich to poor • UN Millennium Summit 2005 NY • Live Aid, Africa • Can the rich countries assist development of poor countries? • Development discourse, IMF and World Bank ostensibly committed to maintaining global economic stability AND development

  13. Nicaragua – Vietnam – foreign aid, agricultrual • Vietnam – reduced poverty, 5% economic growth per capita since 1988 • Despite US embargo until 1994. Nicaragua preferential access to UIS market, billions do $ of debt written off in 1990s • China and India like Vietnam (no aid, preferences in trade • History

  14. Protectionism / outs-sourcing/unemployment • Who benefits? • Who loses? • Impact on prices • Investment • Employment

  15. Domestic Reforms – slow • Land reform • Labor intensive economic growth • Education • Market access • Social safety net /risk management

  16. Development slow process, internal, specific, different, based on specific constellation of factors • No one size fits all model of development • S Korea and Taiwan – export directed, but export subsidies, high tariff • China – market socialism • India, protected until 1990s

  17. Impediments • Rich countries impose costs on poor • TRIPS – WTO’s intellectual property agreement (Trade Related Aspects of Intellectual Property Rights), prices of essential medicines greater - transfer from poor to pharmaceutical companies • (patent protection costs) • MUST ABANDON

  18. Neo-liberal policies/structural adjustment • Big dam construction – displacement of local populations • Narmada Bachao Andolan • 16,000 farmer suicides in India • Naomi Klein No Logo • Vandana Shiva

  19. Structural adjustments policies of IMF • De-regulate, marketize, privatize • Since mid 1980s all Latin American countries follow model, • Asia – domestic investors, including poor • Grameen Bank • Governance/corruption • Labor – immigration (scheme temporary visas - 3% of rich countries’ labor force – 3-5 years) investment, human capital

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