Is globalization helping or hurting the world’s poor?
A coffee farmer inspects his crop in Colombia's southwestern Cauca department. | Flickr: Neil Palmer/ CIAT
There’s no doubt about it- we are living in an increasingly globalized world.
I’m not sure when this happened, historians can’t even agree. 2,000 years ago? 20 years ago? I guess it doesn’t really matter. What matters is that we recognize how the world is changing, and the implications behind it.
So what exactly is globalization? Internet go-to Wikipedia defines it as “the process of international integration arising from the interchange of world views, products, ideas and other aspects of culture.” In other words, globalization means we’re all connected.
In 2015, this manifests itself in many ways. The voting patterns of one country will directly affect people living in another. The choices that American consumers make will directly affect the quality of lives of factory workers in South East Asia. The environmental policies created in India will directly affect climate patterns experienced in Africa. And most importantly, those of us living in metropolitan cities can enjoy Ethiopian, Japanese, and Italian food all in the same day...yum.
The implications of globalization are HUGE.
A jade factory in Beijing, China. | Flickr: UbeIT
So what does this mean for people living in extreme poverty? Is globalization helping or hurting the world’s poorest communities?
I looked to the National Bureau of Economic Research, who recently published Globalization and Poverty. The book is edited by Ann Harrison, with contributions from 15 economists. Here’s what I found out:
Globalization produces both winners and losers among the poor.
Some studies show that globalization has been associated with rising inequality, because the poor do not always share in the gains from trade. An example of this is the coffee trade. Coffee is the second most traded commodity in the world, yet most of its growers only make 10% of what it eventually sells for. However, when farmers have access to credit, technical know-how, and social safety nets such as income support, trade can benefit the world’s poor.
The book argues that export growth and incoming foreign investment have proven to reduce poverty. But, at the same time, trade and foreign investment alone are not enough to alleviate poverty. Increasing access to education and credit, as well as improved infrastructure, are necessary in order to see real progress. Echoing that idea, Harrison concludes that globalization can benefit people living in extreme poverty, but only if the appropriate complementary policies and institutions are in place.
Global citizens, that’s where we come in.
I personally will never get involved in foreign investment or trade- I’m not particularly interested in business. But you know what I can do? I can use my voice to help ensure that everyone has access to quality education. I can do a little research and use my power as a consumer to support companies that treat their employees well. And I can stand up against policies that promote inequality. We all can!
In today’s globalized world, we no longer have the luxury of saying “well that’s not our problem.” We’re all responsible, and we’re all culpable. And we’re naive if we think that problems experienced far away from us won’t reach us.
Collectively, all of our actions and inactions, have real consequences that can be felt worldwide. It’s our responsibility as global citizens to hold ourselves and our leaders accountable to make thoughtful choices in consideration of others.