Globalisation and Global Poverty Notes

Globalisation and Global Poverty

Learning Objectives

  • F10: Explain reasons globalization causes global inequality.
  • F13: Discuss reasons for using different perspectives to understand global inequality, with examples from various countries.

The Extent to Which Globalization Alleviates Inequality

  • Brandt Reports (1980 & 1983): Introduced the concept of the North/South Divide.
    • Highlights economic and social divisions:
    • Global North: Developed countries with higher living standards, wages, and industrial productivity.
    • Global South: Underdeveloped countries facing poverty, low wages, and structural disadvantages.

Free Trade and Economic Globalization

  • Supporters’ Argument: Free trade liberalism has challenged the North/South perspective by creating jobs in manufacturing worldwide.
    • Growth in Global Production:
    • 2000: US $41.016 trillion
    • 2017: US $80.934 trillion

Decline in Extreme Poverty

  • The global number of people living in extreme poverty has significantly decreased:
    • World Bank Statistics:
    • 1990: 1.2 billion people living on less than US $1.25/day
    • 2021: 689 million people
  • Key factors contributing to this decline:
    • Higher wages
    • Cheaper food and medical equipment

Impacts on Developing Countries

  • Developing nations accessed global markets and utilized cheap labor to lift millions from extreme poverty.
  • Challenges faced:
    • Incidence of child labor in countries like India.

Economic Output in Developing Countries

  • Output per person nearly doubled between 2000 and 2009: 4.5% higher than in wealthier nations.
  • Specialization Examples:
    • Export of cocoa from Ghana and Côte d'Ivoire.
    • Low-cost manufacturing from Vietnam and Thailand.

Case Study: China

  • Extreme Poverty Reduction:
    • 1980: 84% of population in extreme poverty
    • 2021: 0% of population in extreme poverty
    • However, poverty remains prevalent, with rural children disproportionately affected:
    • Rural child poverty rate (2018): 2.2% compared to 1.7% for total rural population.
  • Increased Inequality: Despite poverty eradication, China now exhibits high inequality rates similar to the US.

Case Study: India

  • Extreme Poverty Reduction:
    • 1980: 60% in extreme poverty
    • 2021: 6% in extreme poverty.
  • Challenges with increasing inequality: Professor Himanshu emphasizes the compounded nature of economic inequality alongside existing social fractures (caste, religion, region, gender).

Development Goals

  • Millennium Development Goals: Considered successful in lifting more individuals out of poverty than ever before.
  • Result: Enhanced prosperity in previously underdeveloped nations, questioning the strict dichotomy of Global North vs. Global South.