Global Inequality
and Poverty
GLOBALIZATION
A lot of questions and debates
3 basic meanings:
1. 1. Development of a global market economy, in
which goods, capitals, services move freely, driven
by the profit motive
2. 2. Development of the global civil society
3. 3. The growth of international organizations
All three imply the extraordinary growth of
interconnections between societies, economies,
people across state borders
All three imply challenges to the sovereignty of the
nation-state, its ability to act
Robbie Robertson*:
Globalization started 500 years ago, an essential
feature of the development of capitalism
3 waves:
Since 1500s – Geographic discoveries, growth of
international trade
Ended at the end of the 18th century
Since 1800s – Industrialization, British hegemony
Ended with the start of World War I
Since 1945 – Institutionalization, key role of the US,
post-industrialism, the information revolution
*Robbie Robertson, The Three Waves of Globalization. A History of a
Developing Global Consciousness. L.: Zed Books, 2003
Globalization is much more than the growth of global
markets or power strategies pursued by some
forces which have a global reach
It is a process of development of the human
civilization leading to the rise of global society
“Anti-globalization” is a misnomer
Because these protesters are part of globalization
themselves
At issue is the struggle over the terms of
globalization, over the shape of the world order
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The Third Wave:
US-led efforts to create an international order
Politically: democracy, rule of law, peaceful
resolution of disputes (The United Nations)
Economically, a set of institutions to rebuild a
growing world economy in which mutual economic
interests would make wars less likely (the BrettonWoods System)
Late 1960s-early 1970: the notion of
interdependence of nations – growth of interests
and concerns shared on a global scale
“The global village”
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After the end of the Cold War,
globalization was presented as a progressive,
positive force binding humanity together, opening
up great opportunities for progress everywhere,
etc.
Peace, cooperation, and prosperity instead of war,
impoverishment, and radical revolutions
The real record is a far cry from this utopia
Institutions of economic globalization
 The IFIs – they make and maintain the rules
 Parallel development: the rise of the TNCs, the
institutional core of the global market economy
 Many states pursued socialist-type reforms
 Success in saving and reviving capitalism
 1950s-early 1970s: “The Golden Age”
 Late 1970s:
 the shift to the neoliberal model (The Washington
Consensus)
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Neoliberal economic reforms (“Structural
adjustment policies”, “Shock therapy”)
Implemented first in the less developed countries of
the Global South,
-then in post-communist states of Eastern Europe
and Eurasia,
-then in Western countries
3 main components designed to reduce the role of
the state and free up market forces:
Liberalization
 Stabilization
 Privatization
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Average annual growth rate of world GDP:
 4.9 percent between 1950 and 1973
 3.0 percent between 1973 and 1992
 2.7 percent between 1990 and 2001
 THE GLOBAL ECONOMY IS SLOWING DOWN
Average ratio of real interest rate to GDP growth rate in the
seven leading capitalist economies:
 0.97 between 1881 and 1913
 2.40 between 1919 and 1939
 0.36 between 1946 and 1958
 0.55 between 1959 and 1971
 0.47 between 1972 and 1984
 2.34 between 1985 and 1997
 THE BURDEN OF DEBT IS GROWING
Growth of global inequality
Income gap between rich and poor countries:
1820 – 3:1
1950 – 35:1
1997 – 74:1
2002 – 82:1
(Brodie/Rein, p.318)
UN Human Development Report 2002 :
“Economically, politically and technologically, the
world has never seemed more free – or more
unjust” (p.1)
“Advancing human development requires
governance that is democratic both in form and in
substance”
Why democracy is key to development (UNHDR – 2002):
1/ Participating in decision-making is a fundamental human
right
2/ Democracy protects people from political and economic
catastrophes – famines, wars (governments are more
circumspect, attentive to public needs)
-Since 1995, 10% of population of North Korea died of
famine
-In 1958-61, 30 mln. died of famine in China
-In India, there has not been a single famine since 1947,
despite crop failures
3/”Democratic governance can trigger a virtuous cycle of
development – as political freedom empowers people to
press for policies that expand social and economic
opportunities, and as open debates help communities
shape their priorities”
BUT:
“The links between democracy and human
development are not automatic: when a small elite
dominates economic and political decisions, the
link between democracy and equity can be broken”
(p.4)
At issue:
WHO CONTROLS THE STATE?
WHOSE INTERESTS DOES THE STATE SERVE?
Can an egalitarian political system coexist long
with massive and growing socioeconomic inequality?
Can concentration of economic power in the hands of a few be
reconciled with political pluralism?
The lesson from the 20th century
Democracy is essential
But democracy can be misused – it can become a
cover for economic imperialism under the flag of
market freedom
Democracy has to be effective in protecting people
from economic imperialism and enabling them to
develop their societies
UN Millennium Development Goals, adopted in 2000
1.
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8.
1. Eradicate extreme poverty and hunger
2. Achieve universal primary education
3. Promote gender equality and empower women
4. Reduce child mortality
5. Improve maternal health
6. Combat HIV/AIDS, malaria, and other diseases
7. Ensure environmental sustainability
8. Develop a global partnership for development
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UN Human Development Reports
http://hdr.undp.org/en/reports/global/hdr2002/