Critical Evaluation of Globalization & Economic Inequalities is Spreading
Uploaded by Appleman on Feb 02, 2012
Critically evaluate the perspective that the current phase of globalization is deepening the economic inequalities between developed and developing countries
Globalization is a term that relates to many different political, economical, cultural and ideological processes. In economic terms, it is roughly defined as the free movement of capital, services and goods across international borders. It has enabled western market economies to spread across the globe, which in turn has helped large corporations from those western countries to extend their reach of impact further across the globe than before.
It has seen these market economies and corporations increase revenue dramatically, but has the liberalisation of markets and economies benefitted everyone equally?
The short answer is no. The UN, in their 2010 Human Development Report, states that “over the past 20 years, the gap between developed and developing countries has continued to widen.” Their evidence to support this claim is as follows: “In 1970 the average income of a country in the top quarter of the world income distribution was 23 times that of a country in the bottom quarter. By 2010 it approached 29 times.” But how much of this is down to globalisation?
Pranab Bardhan, in his article “Does globalisation help or hurt the poor” states that “globalization can cause many hardships for the poor in these [developing] countries but it also opens up opportunities which some countries can utilize and others do not, largely depending on their domestic political and economic institutions”. Between 1981 and 2001, the percentage of people living below the international poverty line in sub-Saharan Africa rose from 42% to 46%, but of the 43 countries in that region, 29 experienced civil conflicts during that time. Civil conflicts such as the one in Sudan drive millions of people out of their homes and out of their jobs, forcing them to live in refugee camps and subsequently below the poverty line, and this is not as a result of globalisation. Bardhan suggests that if anything, this has had a negative effect on globalisation “as it scared off many foreign investors and traders”.
When TNCs open up factories and manufacturing facilities in developing countries, the perception in the more developed countries is that these factories exploit cheap, local workforces and the working conditions in these “sweatshop” factories are poor. But this perception is only partly true. An Oxfam Report from 2002 contains an interview with Rahana Chaudhuri, a 23 year old mother...