Globalisation is Not Always a Solution to Poverty And Inequality - Essay Example

Globalization is not Poverty’s Panacea: Analyzing the Complexities of Brazil’s Poverty and Inequality The onset of globalization marks an important turning point in world history. It has shaped the histories and destinies of countries swept in its current, and continues to define and determine the fortunes of these countries in the future. Globalization has been defined as “accelerated international liberalization combined with improved technologies increased the scope of international economic activity” by Spero and Hart (2010, page 8), but it is more than that. It is a powerful paradigm and vision with effects reaching far beyond the economy and impacting culture, tradition and even people’s sense of identity. Because of its sheer force and power, many people are wont to think that it can automatically eradicate poverty. Economic, political and social factors within the domestic arena play a big part in ensuring that inequality and poverty are addressed with sustainable solutions. This paper argues that without internal governance and social stability in the domestic arena, globalization can exacerbate rather than mitigate the problem. It will argue this point by examining the case of Brazil, and why, despite its large land size and the investments in bioethanol, the economic benefits have yet to trickle down to the poor and inequality and poverty remain to be pervasive. This paper will proceed as follows: first, it will give a brief background of globalization, second, it will give a brief overview on Brazil, third it will provide an analysis of the internal political and social conditions in the country that explain why the benefits of the globalization are not spread equally across the population. Globalization: A Brief Background Globalization did not take place by happenstance. It was the culmination of a long process that began after the end of World War 2 in what was called the Bretton Woods Agreements. The Bretton Woods Agreements resulted in the creation of three organizations: the International Monetary Fund or IMF, the World Bank, and the General Agreement on Tariffs and Trade or GATT. (ibid, page 2) Powerful countries converging around a specific set of economic interests came together to hammer out the specifics and details of these institutions that they believed could shepherd the world out of the wreckage of the Second World War and out of the specter of Communism, and create a new world order based on the Capitalist framework. The United States played a lead role in making this all come together. The period of interdependence which followed the Bretton Woods period saw a diminished role of the United States and more multilateral cooperation. At the same time, the period of interdependence surfaced tensions and frictions between those who saw the new international economic regime as promising and jumped into the free trade bandwagon, and those who saw it as a threat and erected more barriers. But liberalization plodded on and increased economic interaction brought about sweeping new changes, such as the Uruguay rounds. It paved the way for globalization, which Spero and Hart describe as leading to: more open markets for goods and services, to global firms producing and distributing products in multiple markets, and to global financial markets in which currency, debt, and equities were traded twenty-four hours a day around the globe. The technological revolution of the Internet created further changes in the nature of the international trade, investment, and finance (ibid, page 8) However, the benefits of globalization were not showered equally to all countries participating in it. The developed countries, such as the United States and member countries of the European Union, benefited greatly from globalization, while the developing countries became more and more poor. For example, financial assistance is given to developing countries like those in Latin America, but this aid comes with conditionalities to comply with the requirements of globalization and liberalization. This includes the privatization of basic services, the removal of tariffs on certain commodities, etc. and this all resulted in massive unemployment and even deeper poverty. Also, the social and environmental costs were massive, because globalization led to the unsustainable pillage (usually in the developing world) for resources, resulting in deforestation in the Amazon, water pollution in Africa, land scarcity in Southeast Asia. Explaining Poverty and Exploring Alternative Perspectives on Globalization Before we look at and analyze whether or not it is globalization or internal governance that is causing poverty, it is necessary to understand the debates concerning poverty and its roots. In Latin America, where Brazil is situated, critics of capitalism and globalization argue that it is the uneven distribution of the benefits of globalization that is creating unfortunate outcomes for the peoples of the developing world. The problem of uneven distribution, whilst originally a problem of globalization, is mediated by state actors and public policy. Hence, it is difficult to view one as independent of the other. Latin American social scientists started using marginality as concept in the early 1960s to describe certain social consequences generated by the rapid and massive urbanization process1 that followed a ‘population explosion’, and a high rate of rural-urban migration. (Kay, 2006: 455) First, marginality was used to refer to the physical location of the shantytowns on the periphery of the cities; then to the absence (or very low quality) of housing and social services in these areas; later the concept was broader used to describe the social conditions experienced by shantytowns residents (unemployment, poor working conditions, low living standards, and so on); and finally its use was extended to include rural groups with similar problems and broader, “any group suffering from poverty and located on the lowest rung of social hierarchy” (Kay 1989: 90). Two approaches to marginality can be identified amongst Latin American social scientists. One group working with modernization paradigm conceived marginality as lack of integration of certain social group in society; the other group worked from a Marxist standpoint and understood marginality as embedded in the country’s integration into the world capitalist system. In the group of scholars that work marginality from a Marxist perspective, and close to dependency theory ideas, we highlight the work of Anibal Quijano and José Num2 and some critiques coming from Brazilian scholars (Saad-Filho, 2005: 128). Both Nun and Quijano frame the discussion using Marxist concepts such as ‘relative surplus population’ and ‘industrial reserve army’. They argue that the penetration and dominance of transnational corporations into Latin America has created such a large relative surplus population that is not anymore functional, but non-functional to capitalism. Nun and Quijano argue that part of the relative surplus population is not absorbed into this monopolistic capitalist sector, and does not work anymore as an industrial reserve army. (Ibid) Num, for instance, using insights from dependency theory explain the inability of the industrial sector to absorb this labour, and coined the concept ‘marginal mass’ to refer to it. Although Quijano and Nun share many ideas, the former goes a little further identifying various sources of urban and rural marginality: unemployment due to the bankruptcy of competitive industries generated by the development of monopoly sector; partial destruction of small handicraft, workshop and commerce sector; and the penetration of capitalism in agriculture, thus expelling labour. In this context, Quijano coined the term ‘marginal pole’ to describe the mechanism by which the ‘marginals’ make a living. He describes this ‘pole’ as not directly linked to any production function; out of the reproduction of capital; a place where the marginal population is exploited as consumers by the capitalist monopoly sector; but still a part of the economy that does not constitute a separate sector (Quijano in this way rejects dualism). Brazil: Of Landlessness and Failed Social Policies Brazil is a country of amazing wealth and dramatic inequalities. The World Bank ranks the Brazilian economy the ten richest in the world, with a GDP of $1.7 trillion PPP. Income concentration is extremely high: 1% of the population, that is less than 2 million over a population of 187 million, have 13% of all household income. According to data provided by the Institute for Applied Economic Research (IPEA), 30.3 % of Brazilians are considered poor and, within this group, 11.5 % of them are ranked extremely poor. This poverty level is three times higher than of other countries with a per capita similar to that of Brazil [$9,000 PPP](Oxfam, 2008). Poverty and inequality are not due to scarcity of resources, but rather to their unfair distribution. Brazil has kept a conservative approach to modernization: economic development was not followed by a change in the socio-economic order. For what is concerning the primary sector, the structural problem lay in the predominance of a latifundio system3 : 45% of agricultural land is controlled by the 1% of large landowners (Sauer: 2009). This amazing concentration of land has deep roots in Brazilian colonial history. The Portuguese divided the land in large farms in order to maintain control over the territory and, at the same time, to produce for the external market using African slaves. When Brazil gained its independence these conditions of landowner power and prevalence of export-oriented production did not change (De Medeiros: 2007). In 1850, the Imperial government enacted a major piece of land legislation: the Land law (Lei de Terra) consolidated a property-regime that blocked the access to land to those who could not afford to buy it; it recognized only two forms of land use: possession and right of usufruct. As a result, at the end of the nineteenth century, the new poor born with the end of slavery and massive impoverished immigration could only claim users' rights to land, which were granted by landlords. Land became a synonym for accumulation of power and privilege. This power included the ability to control the legal and political apparatus of the state in their region (Pereira: 2003). Then, during the following military dictatorship and even after the re-democratization of the country, this land oligarchy was reinforced through a conservative modernization process. Thanks to a market-driven approach promoted by the World Bank, the prevailing model became industrialized agribusiness oriented towards exportations. While the power of large landowners was strengthened, there was also a massive privatization of the previously unused lands. So, on one level, government policy were successful in increasing agricultural productivity; however, even though redistribution of land was on the political agenda, they failed to address the issue in a proper way: this orientation neglected the landless and the poor. In 2008, the percentage of the total area occupied by the 10 % largest properties was approximately 78 % (Beghin: 2008). Why domestic governance is central to the poverty and inequality question This paper now proceeds to discussing how domestic policy has a bigger influence over the extent to which a country experiences poverty and inequality. Despite many poverty alleviation programs being implemented and despite the efforts of the institutions of globalization to pour money into Brazil because of its potential in providing resources, inequality and poverty remained grave problems of the day. To quote Pero and Szerman (2005: 5), The increase in public social spending and the new poverty-alleviation programs were not accompanied, however, by reductions in poverty and inequality throughout the 1980s. The Gini coefficient climbed from 0.58 in 1980 to 0.64 in 1989, and the poverty headcount ratio followed its historical counter-cyclical behavior: at the lowest point of the early 1980s recession, in 1983, the percentage of the poor reached 49%, whereas in 1987, after two years and a 10% GDP growth, this number dropped to 26%. These figures reflect a historical feature of social spending in Brazil – its inability to reduce poverty and inequality, or even to act counter-cyclically, as a safety net, preventing their increase during macroeconomic shocks. This observation soon led to concerns about the effectiveness of social policy in Brazil. For instance, the World Bank published in 1988 a report showing that despite spending around 8.8% of its GDP on the social sector – one of the highest levels among middle-income developing countries – Brazil had a poor performance on social welfare indicators such as infant mortality and illiteracy. We look at one of the core policies of the Brazilian government: the Conditional Cash Transfers (CCT). Brazil was the first country in Latin America to implement CCT’s and it was meant as a poverty alleviation measure to complement the measures being taken by the World Bank and the IMF so that Brazil can reap the benefits of globalization. Advocates have repeatedly claimed that apart from creating impact on extreme poverty, children’s well-being and women empowerment, the CCTs have also been advantageous to implementing governments. For one, the scheme is market neutral, boosting local economy without compromising producer’s prices, unlike food subsidies. Two, its computerised data systems have ensured accurate information on prospective and actual beneficiaries, minimizing targeting errors as well as clientelism and corruption. Three, its implementation cost is relatively low, with Latin American CCTs pegged at less than 1% of the Gross Domestic Product. Critics of CCT in Brazil view it a part of the neoliberal project of rolling back the State and depoliticising the issues of poverty and inequality. The targeting and conditionality components that are undertaken in the name of efficiency and expediency are often “an outcome of the deliberate attempt to delimit the state” (Mkandawire 2005: 2). On one hand depolitisation refers to the palliative poverty reduction programmes in the near-obsessive target of meeting the MDGs which only distract governments and societies from confronting the structural roots of poverty and inequality (Adesina 2011, Fischer 2010). “Depolitisation then serves to veil underlying agenda and allows paradigmatic shifts... to be hidden behind principles of charity and altruism.” (Fischer, 2010: 40). That the Brazilian government has chosen cash transfers instead of redistributive land reform, job creation, moratorium on debt payments or challenging neo-liberal policies It is said that Brazil’s CCT program, the Bolsa Familia program, because of its selective nature as a result of targeting and conditionalities, only reinforces segmentation in society, and consequently exclusion of thousands, even millions of people. Kerstenetzky (2009: 71), for example, asserts that through a universal access to basic social services such as education and health, as well as the inclusion of those who are unjustly excluded – those who cannot pay or are not able to comply with the conditionalities and the middle class who are paying for the social transfers – could gather the political and financial support it needs. Brazil’s Social Movements: An Indictment both of Globalization and Bad Governance Brazil’s social movements are testaments to the inability of its government to provide for the needs of its population and for failing to ameliorate massive poverty. An interesting facet though of the social movements in Brazil, dominated primarily by the Landless Workers’ Movement or MST, is that it makes both the structures of governance and the forces of globalization complicit in the widespread landlessness that attend the lives of small farmers in the rural countryside. The MST was officially founded in 1984 to demand the radical deconcentration of land ownership via widespread distribution of unproductive land to the dispossessed (Pereira:2009). In the movement's view, access to land represented the realization of justice because it had the capacity to improve levels of wealth distribution, reduce poverty and empower working families. Today, the MST is considered one of the largest and most successful social movements in Latin America. It is organized in 23 of 27 Brazilian states. It counts more than 2 million people involved and it claims to speak for the estimated 4.8 million landless families in the country (Garmany: 2008). It has a grassroots constituency that has evolved over time. At the beginning, it was limited to the de-capitalized and displaced landowners that have lost their land; then, it grew to incorporate complex and heterogeneous social groups, such as rural families who have been forced to enter into urban society. In fact, today, as the MST still continues to push for agrarian reform, the movement has also chosen to carry the broader discourse of social justice, which involves all the victims of economic globalization. Political and social debates are shifted against neoliberal economic policies, large-scale agro industrial practices and the consolidating networks of global capitalism. Structural problems such as poverty and social inequality are considered into a broader picture. Quoting Joao Pedro Stedile, one of the most publicly-recognized figures in MST: "On one side is the campones model, and on the other, the model of agribusiness that is an alliance here in Brazil between the large capitalist farmers and the transnationals. There is a permanent clash between these two visions of agriculture, and this clash is generating a consciousness in the campones movement that disputing the territory is needed; that it’s needed to dispute biodiversity and that it’s needed to have control over these resources that should be at everyone’s disposal"(Stedile in Garmany & Maya : 2008 p.189). So, in this case deeper causes of rights violations, poverty and injustice are conceived through a Marxist frame as the result of the clash between two different visions of agriculture. The MST started his struggle by challenging the very idea of space. The land becomes more than just a territory. It is a place where the campones can have autonomy not only to survive, but also to reproduce their culture, to construct their own values. And these values embrace a broader socio-economic vision that clashes with the prevalent neoliberal model. A model that has turned poverty, social inequality and unemployment into systemic issues of Brazilian society. The final aim then is to substitute this economic and cultural system based on exploitation with a new one able to address the true problem of society, such as work, education and housing (Garmany:2008). The MST has adopted a wide range of tactics in order to pressure the government for agrarian reform. The main strategy, which has characterized the movement in his autonomy and identity, consists in direct land occupation. This is a form of mass mobilisation that entails the appropriation and occupation of unused land: several families, with the help of MST organizers, move together onto a preselected plot of land and build an illegal encampment. This is a tactic of direct action that is proving to be difficult to ignore. This strategy, although lengthy and dangerous, has showed to be quite successful: since 1985, there have been legalized 2,000 settlements that give an house to 350,000 families (Starr, Martines-Torres and Rosset: 2010). Violence and various difficulties are a concrete risk for the preservation of the movement. For this reason, the MST is deeply engaged in creating a sense of identity and commitment between its members. This goal is achieved thorough a deep engagement and empowerment of all the members. The structure of participatory democracy has at its core the involvement of everyone in the process of building community and trust. Moreover, all the members have to participate in the governance of the settlement: every adult is made responsible for a certain "sector" -- for example education, health or production. The idea is to empower all the people by putting emphasis on equal participation and sharing all the duties and burdens. This effort become more challenging once the land has been permanently acquired. In truth, what Brazil critically needs now is universal access to health. 362,364 cases of AIDS infection were identified in 2004 in Brazil. 49% of the cases are individuals with an age range of 20 and 34 years old. (Borges, et. al., 2006). Taking into account the incubation period, which may range from 10 to 15 years, it means that these people were infected during adolescence. Even though there are campaigns and interventions aiming to spread awareness and knowledge about HIV among youth, this group is still considered vulnerable. Some of the factors cited are poverty and prejudice. MST has managed to portray itself as a relevant political actor by demonstrating its ability to aggregate a wide set of social demands beyond its particular demand for agrarian reform. Conclusion This paper has first provided a brief overview of globalization and what its proponents say is its benefits and effects, particularly for the developing world. After which, it gave a view of alternative lens of analysis in perceiving poverty. It then made two concrete points. The first is the inability of globalization alone to respond to massive problems of inequality and poverty, as signified by the case of Brazil’s conditional cash transfers which many perceive as a failure of governance. The second point is that the existence of social movements are often revelatory of the degree to which the State can meet the needs of its citizens and Brazil’s especially daring social movement is proof of failure of the State to deliver basic services. Moreover, there is an interesting phenomenon which emerges: that of the complicity of the forces of globalization with the forces of the State in creating more chasms between the rich and the poor, the landed and the landless. 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