Global Inequality and Poverty

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Global Inequality and Poverty
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• GLOBALIZATION
• A lot of questions and debates
• 3 basic meanings
• 1. Development of a global market economy, in
  which goods, capitals, services move freely,
  driven by the profit motive
• 2. Development of the global civil society
• 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

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• 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

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• 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
  Bretton-Woods 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

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• 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
• 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

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Percentage share of national income
Country Poorest 10 Poorest 20 Richest 20 Richest 10
Brazil 1.0 2.6 63.0 46.7
Russia 1.7 4.4 53.7 38.7
US 1.8 5.2 46.4 30.5
Canada 2.8 7.5 39.3 23.8
Germany 3.3 8.2 38.5 23.7
Human Development Report 2001, UN Development
Program
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• The worlds population 3 classes
• Upper class 11 (real income higher than the
  average income in Italy)
• Middle class 11 (real income between the
  average income in Italy and the poverty line,
  adjusted for purchasing power)
• The poor 78 (real income below the poverty
  line)
• See Branko Milanovic, True World Income
  Distribution, 1988 and 1993 First Calculations
  Based on Household Surveys Alone. Economic
  Journal , Jan.2002
• 2.8 bln. people live on less than 2 a day
• The richest 1 of the worlds people receive as
  much income as the poorest 57 (UN Human
  Development Report 2002, Overview, p.2)
• Worlds 3 richest people have assets greater than
  48 poorest countries combined

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• Inequality on a global scale
• The gap in living standards between the richest
  and poorest nations
• 1820 3 to 1
• 1913 11 to 1
• 1950 35 to 1
• 2002 70 to 1
• See Jeremy Seabrook, The No-Nonsense Guide to
  Class, Caste and Hierarchies. Toronto New
  Internationalist Publications, 2002, p.77

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• Global trends in development
• HDR - Statistics - Get Data - Human development
  in animation

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• 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 

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• UN Millennium Development Goals, adopted in 2000
• 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