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A Key Factor in the Globalization Debate, Research Paper Example

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Research Paper

Scholars and policy-makers examine changes in the global economy since World War II to determine if they are positive for the world’s developing economies or developed economies. The outcome of this discussion in Development Studies could affect how developing countries pursue economic and social policies. One research question that this debate raises is: Are development and globalization a form of imperialism? In answering this question this paper will first review the literature on both sides of this debate, then poverty alleviation will be examined in relation to the globalization debate since a key purpose of development is poverty reduction and a key aspect of globalization is increasing wealth and lowering poverty and inequality. If both development and globalization are imperialist, there should not be a drastic change in the poverty numbers since the benefits should accrue to the developed states. The paper argues that while there has been a reduction in poverty, the numbers are so questionable that the best conclusion to draw is that poverty alleviation is not definitive in determining whether development and globalization is imperialist, or not.

The Literature

Both sides of the imperialism debate oftentimes speak past each other because of the shifting ground over the meaning of globalization. The argument for imperialism focuses heavily on the negative outcomes of global economic policies designed by the rich developed countries. The argument against imperialism raises many cautions about the negative outcome of global economic policies, but avoids labeling it imperialist because of positive non-economic outcomes for the developing world in particular.

The Case for Imperialism

The proponents of imperialism argue that economic development itself was an imperialist invention meant to dominate the people from the newly decolonizing countries right from the start (Veltmeyer 6). Overseas development assistance (ODA), was less about helping other countries and never intended to be altruistic; rather it was meant to stop the advance of communism without affecting America’s economic interests (Veltmeyer 6). Thus, development became a form of empire building for what Veltmeyer calls “Euroamerican empire” in the twentieth century (10).

In the 1980s and structural adjustment, more international financial institutions were used to force developing countries to pursue policy reforms towards capitalism and democracy (Veltmeyer 8). The World Bank economists came to determine development aims for developing countries (Veltmeyer 8). And in the 1980s structural adjustment policies caused over one trillion in capital flows out of the developing world to the developed (Veltmeyer 10). In the last 25 years, neoliberalism or globalization was supposed to be a partnership between target poverty (Veltmeyer 11). However, the neoliberal model became the only path to economic growth and thus globalization was no longer a process but a project with economic outcomes that benefited the rich over the poor, countries and people.

The Case Against Imperialism

The case against imperialism picks up where the case for leaves off: globalization is not an inevitable process and critics fail to appreciate the diverse responses of political leaders and governments in developing countries to globalization (ECLAC 18). They argue that globalization’s non-economic outcomes show the benefits.

Arguments against imperialism do not deny rising inequalities that are the result of development policies and globalization. For example, communications media are now concentrated in a few companies all concentrated in developed countries (ECLAC 27).

Yet the positives are largely in human rights. Globalization can foster and undermine cultural diversity at the same time, however, the good appears to outweigh the bad as more changes in developing countries in the area of democracy and human rights have protected citizens. The Millennium Declaration along with commitments to women’s rights, the environment, and others are gains. ECLAC argues that in environmental sustainability for example, globalization has resulted in protections for the environment because it promotes comparative advantage that punishes those countries that do not follow, ecotourism being one such example (ECLAC 26).

Both proponents and opponents of the idea that development and globalization are forms of imperialism point to poverty alleviation as a symbol of economic development. Imperialism proponents suggest that poverty eradication is mere subterfuge masking the real intentions of further enriching developed nations. Those against hold that one of the benefits of globalization is poverty eradication, enshrined in the Millennium Declaration. Poverty alleviation, then, should shed some light on the debate.

Poverty Alleviation, Development and Globalization

To date there is little agreement on how many people are truly rising above poverty or if the numbers reflect merely changes into how poverty is defined. Part of the neoliberal argument has been that income equality since the 1980s has become more equal (Wade 567). Proponents of globalization also suggest that economic integration “has made for rising efficiency of resource use worldwide as countries and regions specialize in line with their comparative advantage” (Wade 567). How they arrive at the numbers is in dispute. There are three billion people living on less than $2 per day, and 1.3 billion on one dollar per day or less (Gates 4). In 2001 half of the developing world was living on less than two dollars day (Harrison and McMillan 124). But the poorest of the poor are at the center of the globalization debate because the global poverty lines are measured by the number of people living on one or two dollars per day (Wade 571).

But the World Bank, which is one international organization that keeps track of the numbers, has produced different analysis of the numbers, which makes determining poverty numbers difficult. Former president of the WB Jim Wolfensohn noted that unless there was a serious effort to make inclusion part of global considerations, there could be five billion people living on less than two dollars per day by 2030. The United Nations asserted that spending, or what proponents of the imperialist thesis would argue is foreign aid for selfish economic aims, was not spending enough to meet the minimum requirements for the increasing population in the area of basic needs like health care or potable water (Gates 4). Yet Wolfensohn also stated that since 1980 the number of people living on less than one dollar fell by 200 million (571). Fortunately for Wolfensohn, both appear to be true. There has been a reduction in poverty numbers but it appears to be because of changes in how poverty is counted.

One example of the count problem is seen in the WB report that argues that in 1980 1.4 billion people were living in absolute poverty but by 1998 the number was 1.2 billion. The WB attributes the decrease to greater economic integration because of globalization (Kiely 896). Meaning that this decrease means that imperialist aims are not so selfish. Absolute poverty is not really measured by those living on an income of one or two dollars per day, but on “purchasing power parity (PPP) exchange rates” for the dollar, which adjusts for cost of living that is lower in poorer countries (Kiely 896).

The PPP measurement can be easily be manipulated to make it consistent with the WB’s arguments in favor of globalization, namely that it lowers poverty numbers. A 10 percent increase in the poverty line for the Chinese, for example, will lead to a 20 percent increase in the numbers in poverty, showing its sensitivity on the low end. Also, the numbers change according to household income and what is included and excluded in the baskets, which is also easy to change. And the PPP basket the WB sued excluded both India and China, two countries crucial to this discussion who did not take part in PPP surveys so there is no way to conclude that their numbers are reliable (Wade 572).

Two other problems arise. First, the comparison between 1980 and 1998 is invalid because different measures were used for each one (Wade 572). Second, Wade notes that during the 1960 to 1999 period world GDP grew just above population rates (568) with growth at 80 million more people per year (Gates 4). However, even the regions that did grow, like Asia, China’s per capita income rose significantly but from an extremely low rate and the East Asian countries, the universal success stories, grew only by 13 percent (568). Moreover, the world’s wealthiest 200 people hold $1 trillion in assets. And it doubled between 1995 and 2000 so the richest few equaled the assets of the world’s 2.5 billion poorest people (Gates 4). Thus, it is difficult to measure poverty numbers and the betterment of all that proponents of globalization argue demonstrate that it is not imperialist. But it is equally problematic for opponents to use poverty numbers to advance their arguments either.

To date studies do confirm what the poverty numbers do: globalization has mixed results on poverty alleviation. When a country has a significant number of people in poverty, trade reform does not benefit them as much as other countries. Second, the poor benefit more from globalization when other policies like that support workers are in place (Harrison and McMillan 125). For example, in Ethiopia the effects of globalization would not have been felt at all without food aid. Third, there is evidence that “export growth and incoming foreign investment can reduce poverty” (Harrison and McMillan 126). Countries like Mexico and India show that increases in foreign direct investment have lowered poverty rates.

Globalization produces both winners and losers among the poor and the variability is striking (Harrison and McMillan 126). Two farmers producing the same crops in one region could be affected in opposite ways. Any trade reform in one country can produce income losses for rural farmers and income gains for urban workers. Finally Harrison and McMillan note that different poverty outcomes can be derived from different poverty measures (127). They note: “Measures of export activity and foreign investment are generally associated with poverty reduction, while removal of protection [is] frequently associated with rising poverty” (127). What is clear is that the poorest of the poor are untouched by globalization yet they are ones that are caught in the crossfire of the globalization debate.

In the globalization debate perhaps nothing makes the importance of the debate more clear than with children. ECLAC advances globalization’s strength in alleviating human rights abuses and children’s rights. Yet one critical issue linked to poverty that is still a significant problem is child labor laws. They matter because “child labour condemns participants to adult poverty by depriving them of education and skills” (Jones 339). Estimates are that over 180 million children are working in horrible conditions of child labor. And out of an estimated 351 million working children 8.4 million are in prostitution and the drug trade and 171 million in dangerous conditions (Jones 340).

Consequently, the numbers, the mixed results and the poverty of children all highlight that neither side can comfortably show that poverty alleviation is trending in a direction to defend or deny that development and globalization are a form of imperialism.

Conclusion

This paper has argued that poverty alleviation outcomes are so mixed that neither side of the development and globalization as a form of imperialism debate can claim victory. In assessing each side, it was shown that both see poverty alleviation as central to their claims that globalization has positive or negative outcomes. Poverty numbers however are unclear and confusing. Reduction in poverty is linked to certain types of globalization policies but the exact numbers are in dispute and the positive numbers have questionable methodologies. Poverty reduction has mixed outcomes, which give both sides some fuel for their fire but ultimately the mixed results mean that neither side can use poverty reduction to show definitely that globalization and development are or are not forms of imperialism.

This research shows that discussions of globalization and development as forms of imperialism must have an empirical basis that can be agreed upon in order to measure the results on the ground. The world economy might increase in overall output, but it matters where that increase comes. This is especially important for policies, like child labor that tie into poverty in direct and important ways. Thus agreeing on the methods used to measure poverty is one area of research that can help to shed more light on the debate.

Bibliography

Economic Commission of Latin American and the Caribbean. “No. Globalization and Development.” In course reader, pp. 18-28.

Gates, Jeff. “With Globalization, Poverty is Optional.” The Humanist 61.6 (Sep/Oct 2001): 4, 45.

Harrison, Ann, and Margret McMillan. “On the Links Between Globalization and Poverty.” Journal of Economic Inequality 5 (2007): 123-134.

Jones, Gareth A. “Children and Development: Rights, Globalization and Poverty.” Progress in Development Studies 5.4 (2005): 336-342.

Kiely, Ray. “Globalization and Poverty, and the Poverty of Globalization Theory.” Current Sociology 53.6 (November 2005): 895-914.

Veltmeyer, Henry. “Yes. Development and Globalization as Imperialism.” In course reader, pp. 5-16.

Wade, Robert Hunter. “Is Globalization Reducing Poverty and Inequality?” World Development 32.4 (2004): 1-23.

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