Does Globalization Promote Prosperity and Opportunity for All - Case Study Example

Does Globalisation Promote Prosperity and Opportunity for All? Introduction This work deals with an analysis of the effects of globalisation on the elimination of poverty in the world. As such, this work claims that globalisation has not been wholly successful in alleviating poverty in the world. The following discussion proves this contention. In this regard, various controversial arguments have been taken up for discussion. Finally conclusions have been arrived at. The principal claim of this work is that Globalisation has not been entirely successful in reducing world-wide poverty. The modern epoch of globalisation and sustained reduction in the proportion of individuals living in extreme poverty have overlapped. This could lead one to surmise that globalisation has not rendered the poor more impoverished. At the same time, globalisation cannot claim to have been the sole cause for poverty alleviation. The latter phenomenon had predated trade liberalisation in a substantial number of instances. As such, addressing market failures, ensuring political stability, enhancing infrastructure, performing outland reform, and providing social safety measures are much more influential in diminishing poverty than globalisation. The latter is merely one of the factors that can promote poverty alleviation. It would be the height of folly to open up a nation’s market without undertaking the measures enumerated above[Bar06]. In such instances, poverty would be enhanced rather than diminished. Paragraph One International foundations, and governmental and non-governmental organisations focus to a considerable extent upon global poverty. Some of these entities are the United Nations, International Monetary Fund and the World Bank. Furthermore, several scholars have undertaken the study of globalisation and its role in poverty alleviation. Poverty has impacts that are not restricted to the areas where it prevails. The adverse effects of this distressful condition are substantial and are experienced in the developing, as well as developed nations. These adverse effects promote environmental degradation, urban slums, market stagnation and the movement of refugees[Wer09]. As such, the industrialised nations have failed to address poverty, and their aid programmes have proved to be woefully inadequate. Consequently, the need of the hour is for the multinational corporations to form profitable partnerships with the impoverished. Moreover, such associations should prove to be of mutual benefit for them. The traditional interventions, in this regard, have proved to be unequal to this task. The development of new markets for their products, employment generation and the presence of opportunities for economic development, can achieve this salutary effect. To a significant extent, the public-private alliance can attain this beneficial objective. However, it is the multinational profit oriented enterprises that can play a major role in this process[Wer09]. Such entities are crucial for ensuring effective and enduring global poverty alleviation. Paragraph Two There tend to be differing claims regarding the impact of globalisation. For instance, Marber had contended that the multinationals had facilitated the further enrichment of the rich and had improved the economic status of the poor. On the other hand, Isaak had claimed that globalisation had made the rich richer, whilst impoverishing the poor[Haa12]. As of the year 2010, remittances by workers to developing countries was around 365 billion dollars. This information was provided by the World Bank, and constitutes less than one percent of the global GDP. However, these remittances are concentrated in certain areas. An instance is provided by Mexico, whose inward remittances are second to only its oil exports. Consequently, remittances have an economic benefit that could be significant in some countries, and should therefore be taken into account in analyses of the influence of economic globalisation[Haa12]. Thus, according to Isaak, globalisation renders the poor more impoverished and rich the richer. Paragraph Three Akoum has claimed that high growth rates are not invariably accompanied by reduction in poverty rates. As a result, a wide-ranging policy approach could prove to be more beneficial in reducing poverty than a broad-based growth policy approach. Academicians and practitioners have been arguing about the causal association between poverty and growth. However, these debates have failed to provide concrete evidence to establish that growth is sufficient for mitigating poverty. This situation poses a major difficulty for policy makers, with respect to reducing poverty[Ako08]. This argument claims that globalisation, in isolation, cannot reduce poverty rates. Paragraph Four Viewed in its entirety, it can be safely claimed that the poor are not being impoverished to any further extent. However, it has not been possible to prove that the condition of the poor has improved, chiefly due to the outcomes of globalisation. With regard to China, the following facts have been highlighted. Poverty in this nation had been the alleviated due to several internal factors, such as infrastructure expansion, extraordinary land reforms of 1978 that brought about the discarding of the communes established during the Mao era, changes to the grain procurement prices, and imposing lesser restrictions upon the rural to urban migration process[Bar06]. As such, poverty alleviation in china had transpired to a major extent in the 1980s, prior to the gigantic steps taken in foreign trade and investment. Between 1981 and 2001, around 400 million Chinese had risen above the international poverty line, and 75% of these individuals had done so by the year 1987. All the same, the fact remains that globalisation had increased employment in labour intensive manufacturing. This had extricated a large number of Chinese and Indonesians from a state of poverty[Bar06]. On some occasions it had been observed that globalisation had improved the economic condition of the poor. Paragraph Five Kreutzmann had opined that issues relating to poverty, and the polarisation between the poor and the rich were more glaring at the international level than they were in the welfare states. In order to undertake international comparisons, the United Nations employs a Human Poverty Index. This index bases its interpretation upon life expectancy and standard of living in developing and industrialised nations. The purpose of this index is to document poverty trends and the increasing developmental hiatus[Kre08]. As such, the correlation betwixt poverty and globalisation has not been adequately comprehended. In several quarters it has been claimed that globalisation provides the sole means for alleviating global poverty. However, there are several entities who strongly believe that globalisation is one of the cardinal reasons behind such poverty. There are several claims regarding the relationship between globalisation and poverty, which are not entirely factual. Globalisation to be effective in poverty alleviation has to necessarily be accompanied by the appropriate national and international policies[Gol12]. In the absence of such initiatives, globalisation can even aggravate certain aspects of poverty. Paragraph Six In addition, Bergh and Nilsson utilised data from 114 nations for the period 1983 to 2007, in order to analyse the correlation between globalisation and World Bank absolute poverty estimates. These researchers discerned a significant negative correlation between poverty and globalisation, robust to severe economic specification, and pooled ordinary least square (OLS) regression[Ber141]. Moreover, they discovered that information flows and more liberal trade restrictions were strongly associated with lower absolute poverty. In addition to the benefits of low-cost labour and raw materials, the impact of globalisation upon the fundamental features of society has to be evaluated. It is the tendency for the entities with vested interests to bring about policy that ignores such sociological influences. This is undesirable and should be discouraged. Conclusion Globalisation resembles an inexorable economic development. All the same, several problems attendant upon this process have been identified. Every society is characterised by material, social and spiritual features. Globalisation tends to interfere with these aspects. It is indeed a tragedy that globalisation is a commonly conferred but rarely defined occurrence. From a wide perspective, globalisation can be regarded as an enhancement in the influence of biological, cultural, economic, political or technological forces upon human activities. The economic ramifications of globalisation can be categorised as those that pertain to aid, finance, ideas, migration and trade. Some theorists, such as Isaak have claimed that globalisation makes the poor more poverty-stricken and the rich more rich. Akoum has claimed that globalisation cannot reduce poverty, in its entirety. Bardhan argued that on some occassions, such as in labour intensive areas, gloablisation tends to be beneficial. Goldin and Reinert, claimed that globalisation and appropriate national policies can reduce poverty to a significant extent. In addition, it has been contended by Werhane et al., that it is possible to mitigate poverty at the local and international levels. However, this involves a change in perception regarding global free enterprise, and a sea change in policies that deal with poverty issues. The interventions aimed at reducing poverty, of the past hundred years, have proved to be futile. The mere provision of foreign aid to the poverty stricken regions has failed to either reduce or eliminate poverty. Thus, it can be surmised that globalisation cannot reduce poverty, totally. Globalisation depends on several factors, such as national and international policies, trade liberalisation, labour-intense manufacturing, and profitable partnerships. As such, this work has established the contention that globalisation has not been entirely successful in reducing global poverty. References Bar06: , (Bardhan, 2006, p. 85), Wer09: , (Werhane, et al., 2009, p. 1), Haa12: , (Haase, 2012, p. 38), Haa12: , (Haase, 2012, p. 40), Ako08: , (Akoum, 2008, p. 226), Bar06: , (Bardhan, 2006, p. 86), Kre08: , (Kreutzmann, 2008, p. 681), Gol12: , (Goldin & Reinert, 2012, p. 1), Ber141: , (Bergh & Nilsson, 2014, p. 42), Read More