Do we now live in a more equal world - Essay Example

Do we now live in a more equal world? Describe the current pattern of global inequalities today, how it has evolved over the last 200 years, and why these global inequalities have occurred In any country, economic growth would mean the production of goods and services (GDP) on one hand and increasing the total income of the country (GNP) on the other hand. But these are not immune to the problems of inequality and poverty (Peet & Hartwick, 1999, p.2). Global inequality has grown increasingly and very dramatically since the past 200 years. The era after the cold war is regarded to be the true period of globalization (Milanovic, 2005, p.3). By the end of the twentieth century, the phenomenon of global income inequality was seen to be greater than it was ever before. Global inequality has two distinct dimensions. These are the inequalities that exist between countries and the inequalities that exist within the countries. Not everyone in the developed nations, like the United States, is known to be rich and similarly not everybody in a poor country is poor. It is necessary to take these two measures together. The world was divided into three categories by the World Bank going by their income levels - low income country, middle income country and high income country (Peet & Hartwick, 1999, p.6). Global inequality affects the living condition of the poor countries. Economic growth can affect not only the GDP and GNP of a nation but its overall heath and living conditions too (Wermuth, 2003, p.22). But before framing any conclusion, it is important for the analysts to differentiate between inequality and poverty in these countries. To measure poverty, it is essential to have a poverty line which is usually set at a higher level in richer countries. As for the poorer nations, there is little income gradient in the poverty line (Ravallion, 2003, p.745). Similarly, to measure the economic indicators like GDP and GNP that help to estimate global inequality, we also need some measurement tools. GDP is measured by the production output units like bushels of wheat etc. The exchange rate mechanism is used to measure the national income or GNP (Firebaugh, 2006, pp.34-35). One of the many reasons why global inequality or world inequality is so prevalent today is the extent up to which the income and the wealth of the countries is distributed in a very uneven manner among the worlds population. There is little doubt among the researchers that this income inequality that is seen both within and between the nations has been on a rise since the mid-twentieth century. It has been reported by the World Bank that the increasing gap between the rich and the poor countries over the past forty years has accounted for much of the increase in the worldwide income inequality amongst individuals and other households. Inequality patterns and consequences Globalization is divided into three patterns. These are unweighted global inequality, weighted global inequality and global inequality (Held & Kaya, 2004, p.3). In the first pattern, the mean of the country GDP across several countries are considered and population size is not taken here. The second pattern is also the same except that it takes population size into consideration. Global inequality measures difference between individuals of the world. These include intra country and inter country inequality. In 1960, the per capita GDP in the most of the richest twenty countries was found to be eighteen times than that in the poorest twenty countries. By 1995, the same gap had widened to almost thirty-seven times (World Development Report 2001). This shows that there has been a huge increase in polarization between the nations overtime (Bata,Bergesen, 2010, p.9). According to a survey, the top richest countries in the world in 2007 were Qatar, UAE, the USA, Hong Kong, Switzerland etc and the poorest countries were Democratic Republic of Congo, Liberia, Central African Republic, Mozambique etc (The UNICEF social and economic paper, 2011, p.19). There have been many sociological changes too in terms of global inequality. These inequalities bring in disparities in how a person grows and is brought up in his society and country. These disparities lead to frustration which compels a person to even end his life in death. It was found that China, which contains 22% of the world’s population, had 40% reported cases of suicides. The choice to end one’s life is totally a personal choice but the factors that compel him to do so solely cannot be his own personal choice (Macionis and Plummer, 2008, p.7). Also, there is disparity in the equality patterns when seen in international organizations like IMF between the rich and the poor nations. It is now known that the richest nations control 43% of the voting rights in IMF with a population level of only 10% of the total population where as China has only 3% voting right. This means that the country enjoying more power have more control over the global income (Milanovic, 2005, p.150). Inequality between individuals in the same region There are many reports that speak about the inequalities that can be between a rich American versus a poor American, for instance. But at this juncture, we also need to address the inequality that exists between the citizens of the world. There are scholarly articles that can establish how to measure the presence of global inequality in individuals within a country, and show that inequality is actually shaped by many complex forces. Inequality has increased between countries over the past half century which means the richer countries have generally become richer than the poorer countries. There has been increase in the growth of the developing nations too like China and India. But still during the previous twenty years, inequality within countries has grown. At the beginning of the twenty-first century, the wealthiest 5 percent of the people earned one-third of the total global income, which was as much as the poorest 80 percent. While it is true that a few poor countries are picking up pace with the rich world, the gaps that exist between the richest and the poorest individuals around the globe are vast and likely increasing (Milanovic, 2007, p.20). Reasons for the inequality at the global level One of the primary reasons that come into effect is the disparity in the income levels between the developed and under developed countries that initiated the problem of global inequality. Inequality in income levels gives rise to many other forms of inequalities in society. There are examples of countries like Malawi and Ethiopia which were always at the bottom of the pyramid (Collier, 2008, p.x). These countries are poor not only in terms of income levels but have also failed to grow in economic terms. The problems that these countries have are to be addressed very differently from those of the developing nations (Collier, 2008, xi). GLOBAL DISTRIBUTION PERCENTAGE GLOBAL DISTRIBUTION PERCENTAGE GLOBAL DISTRIBUTION PERCENTAGE 1990 2000 2007 Q5 87 86.8 82.8 Q4 8.1 7.5 9.9 Q3 2.8 3.2 4.2 Q2 1.4 1.6 2.1 Q1 0.8 0.8 1 No. of observations 100 126 135 % of global population 86.3 91.1 92.4 % of global GDB 79 81.4 82.6 Summary Results of Global Income Distribution by Countries, 1990-2007 (The UNICEF social and economic paper, 2011, p.12) A graphical representation of the above table Apart from the income levels, global inequality also arises from features like the health systems like mortality rates. Considerable inequalities in terms of life expectancy and healthcare can be made clearer when seen across countries when grouped by their health outcome levels (Pearce and Dorling, 2008, p 3). It was found that majority of the world health spending was done on developed nations like the USA whereas countries from the African continents where life expectancies was found to be the lowest did not receive such medical arrangements. In terms of livelihood, there are global inequalities too. The data available on contemporary human inequality are widely known. If we consider the relative income shares between the richest and the poorest 20% people of the world, it will be found that between 1960 and 1991 the share of the richest people had gone up by 20% which mean from 70% of global income to 85%, while the same situation in the poorest countries will show that the income level had declined from 2.3% to 1.4%. So, it can be understood that the ratio of the shares between the richest countries and the poorest nations increased from 30:1 to 61:1. By 1991, it was observed that higher than 85% of the world’s population would receive only 15% of its income. Today almost one third of the total world population which means 1.3 billion people has to survive on income which is less than one dollar per day. If we take two dollars per day to be the poverty line, it will again be found that 2.8 billion people out of six billion people in the early 1990s had survived in poverty (Pieterse, 2002, p.1). Studies that used long time series calculations have concluded that the income inequality has been growing constantly increasing since the beginning of the 19th century. Milanovic, for example, had calculated Gini indices over time. Gini index is used to measure global inequality. He found that the global income inequality had risen progressively from 1820 onwards to 2002, with a noteworthy increase since 1980. Estimated Global Gini Indices, 1820-2002 Year Gini 1820 43 1850 53.2 1870 56 1913 61 1929 61.6 1950 64 63.5 1960 1980 65.7 2002 70.7 (The UNICEF social and economic paper, 2011, p.20) To further confirm it, Cornia in 2003 concluded that inequality had increased worldwide between the early 1980s to the early 1990s (The UNICEF social and economic paper, 2011). Global inequality affecting youth, women and children Globally, it has been found that most of the children live in the poorest income quintiles. It was observed that almost half which is 48.5 percent of the world’s young people were confined to the bottom two, i.e. poorest income quintiles. This meant that of the three billion people in the world who were under the age of 24 as in 2007, approximately 1.5 billion people, were living in conditions in which they together with their families found access to only nine percent of global income. These findings will not prove to be shocking as it is known that poorer families generally tend to possess higher fertility rates. On going up the distribution pyramid, it will be further seen that children and youth were not in any better condition either. Greater than two-thirds of the world’s total youth had access to less than 20 percent of the global wealth, with 86 percent of most of the young people surviving on about one-third of world income. For the handful 400 million youth and a little above who enjoy the privilege to rank among the families or situations atop the distribution pyramid opportunities are set for them to have more than 60 percent of global income within their reach (The UNICEF social and economic paper, 2011, p.21). The numbers of adult women and girls surviving in poverty are alarming. As in 2007, almost 20 percent of women lived below the $1.25/day international poverty line, and 40 percent were found to live below the $2/day mark. Girls and younger women also suffered disproportionately from poverty, as greater than one-quarter of the females under the age of 25 were living below the marked $1.25/day international poverty line, and almost half on less than $2/day (The UNICEF social and economic paper, 2011, p.23).Besides income level and mortality rates, there are other aspects of global inequality. It had been suggested by UNICEF to use a multidimensional approach for addressing inequalities beyond income, which can be education, health, information etc. The multi dimensional approach The well-being of an individual is a multidimensional approach. An individual can care about many variant aspects of his life, which can include the material standard of his living, health and education as well. These intangible dimensions are neither tradable, nor are perfectly correlated with his income level. Yet, it has been seen that most analyses on inequality have based themselves on the analysis of single dimension only. If the multidimensionality of individual well-being is to be done seriously, we would have to incorporate the different dimensions explicitly for the analysis of inequality (Decancq and Schokkaert, 2009, p.2). The multidimensional social evaluation function based on the inequality indices uses a combination of two distinct aggregations in an explicit manner. One aggregation is used across dimensions and the other one across individuals. The aggregation across the dimensions of well-being would lead to an index for well-being and is dependent on the preferences of the society or an ethical observer over the relative importance of the different dimensions. An important feature of the aggregation across its individuals is its rank-dependence. The sequencing of both these aggregations leads to two alternative procedures. In the first procedure, all information across the different individuals is first aggregated. This results in a vector of summary statistics that are dimension-specific. These are then aggregated in the second stage. The second stage is the mirror-image of the first and collates across the different dimensions to arrive at the well-being index of every single individual, which are in the second step aggregated for all individuals (Decancq and Schokkaert, 2009, p.3). Conclusion The spread of extreme poverty and inequality coincides with an explosion of wealth over the same time period. Global inequality which is a late-modern notion refers to an economic turn and brings us into a world where the rich seem to control over the poor. Despite of so much report on increasing global inequalities, there are some reports too which say that global inequality level is decreasing. There are reports which suggest that the global inequality level has decreased in the last parts of the twentieth century (Firebaugh, 2006, p.18). There are certain myths that have been circulated about global inequality. The reports that the rich nations are growing at the cost of the poorer nations is a myth that has been spread due to some wrongly cited information (Firebaugh, 2006, p. 19). Global inequality affects the overall harmony and peace in the world. International organizations like IMF need to consider the fact that growing and poorer countries too need to survive and grow and this would call for more voting power in IMF. Similarly, the richer countries need to understand that the world cannot grow leaving the poorer countries behind. They need to grow for the betterment of the world as a whole. References List Bata, M. & Bergesen, A., J. (2010). Global Inequality: An Introduction. [Online] Available at http://jwsr.ucr.edu/archive/vol8/number1/pdf/jwsr-v8n1-introduction.pdf [Accessed on 13 August, 2012] Collier, P. (2008). The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It. Oxford University Press Inc. Day, P., Pearce, J., & Dorling, D. (2008). Twelve worlds: a geo-demographic comparison of global inequalities in mortality. Journal of Epidemiology & Community Health 62 (11): 1002-1007. Decancq, K., Decoster, A. & Schokkaert, E. (2009). The Evolution of World Inequality in Well-being, World Development, 37(1): 11-25. Firebaugh, G. (2006). The New Geography of Global Income Inequality. Harvard University Press. Held, D. & Kaya, A. (2004). Global Inequality. Cambridge: Polity. Milanovic, B. (2007). Globalization and Inequality. Aldrine Publishers. Macionis, J.J. & Plummer, K. (2008). Sociology: A Global Introduction, 4th edition. London: Pearson Prentice Hall. Milanovic, B. (2005). Worlds Apart. Measuring International and Global Inequality. Oxford, New Jersey: Princeton University Press. Pieterse, J. N. (2002). Global inequality: Bringing politics back in. Third World Quarterly, 23(6). Peet, R. & Hartwick, E. (1999). Theories of Development. New York: Guildford Press. Ravallion, M. (2003). The Debate on Globalization, Poverty and Inequality Why Measurement Matters. World Bank Policy Research Working Paper, 3038. Wermuth, L. A. (2003). Global inequality and human needs: health and illness in an increasingly unequal world. Allyn And Bacon. The UNICEF social and economic paper. (2011). [Online] Available at http://www.unicef.org/socialpolicy/files/Global_Inequality_REVISED_-_5_July.pdf [Accessed on 13 August, 2012] Read More