Sample Political Science Argumentative Essay Paper on Why Globalization Contributes to the Growing Gap between the Rich and the Poor

Why Globalization Contributes to the Growing Gap between the Rich and the Poor

Globalization and the associated concerns about poverty and inequality between the rich and the poor has become a worldwide focus of discussion, presenting global issues besides the changing climatic conditions and terrorism. Discussions on this topic indicate that many people have an interest in seeing the poor population in the world rise from poverty to riches. Several people hold on to the opinion that global free markets increase the prospects for the poor, while the anti-globalization antagonists hold an opposite belief with equal intensity. Nevertheless, one thing that is common in these arguments is that different people have varied perceptions and, therefore, dissimilar meaning to the same concept. Some people understand globalization to be a global reach of communication technology and capital movement. On the other hand, others believe that globalization is all about local organizations outsourcing from developed nations. The third group of people perceives globalization as a catchphrase for trade capitalism or developed nation economy and economic hegemony. However, despite the several ways in which globalization has enhanced the gap between the rich and the poor, globalization alone does not address the equation of poverty among the poor. This essay focuses on economic globalization, which involves the expansion of foreign trade and investment. It discusses the manner in which the globalization process impacts the wages, incomes and access to resources by poor people in the developing nations since it is one of the most addressed social concerns currently.

Firstly, it is apparent that globalization is neither a problem nor a solution to the poor. Customarily, many people believed that free trade as initiated by globalization depended on the concept of comparative advantage. This implies that nations are well placed when they export their best products at the same time importing what they cannot produce. In as much many economists appreciate this concept, mixed reactions and different opinions are held by individuals regarding the overall benefits and actual costs of this kind of trade in relation to the social protection of the poor in developing nations. The World Bank is one of the proponents of the fact that globalization is reducing poverty through integrated economies (Globalization, 2002). According to supporters of free trade, it is evident that this rising trend of international specialization and investment is beneficial to both the poor and the rich. Nevertheless, this is counter argued that the poor might not have the capability to adjust and retool to the changing face of the market conditions in specialization. Therefore, according to specialists, specialization benefits only materialize in a long term when production and market conditions are the same, which can never be the case. This implies that adjustments in specialization as a result of globalization have no direct implication in enhancing poverty among the poor.

The debate on globalization among different economic researchers regarding its impact on the poor and the rich is an ideal of the consideration in relation to what is taking place among the affected people and the evidence provided (Basu, 2006). The enthusiasts of globalization argue that the debate is significant in helping the poor change their status. Nevertheless, while taking a look at the real evidence, the matter is more intricate. According to a research by the World Bank, which is a basis for the analysis in this point, it estimates that the majority of the population in the developing nations lives below the required mark of dollar per day. This crude level has been accepted internationally as a standard measure. In applying this measure, it is apparent that extreme poverty among these populations is decreasing in cumulative. This trend is particularly evident in the East, South, and Southeast parts of Asia. The rate of poverty has sharply declined in nations, such as China, Indonesia, and India, which have traditionally been associated with rural poverty that made up almost a half of the total developing nations’ population. The rates of people living below a dollar per day have decreased in the three nations over the years. However, despite the fact that the poorest status is improving, it is not evident that these developments are as a result of globalization. For instance, in China, the reduction of poverty levels can be attributed to several other factors like development of infrastructure, transformations in the land reforms that saw communes disbanded and the adjustments to the restricted mass migration from rural to urban centers. In fact, most of the decline in poverty levels started in the 1980s before the huge wave of globalization in terms of foreign trade or investments came into play. This implies that the majority of the population in China raised from poverty was seen before the era of globalization. In the same manner, the declined poverty state in India rural population was as a result of the Green Revolution in agriculture and the government anti-poverty structural programs and not trade liberalization that took place in the 1990s. Similarly, in Indonesia, rural poverty reduction is attributed to the Green Revolution, macroeconomic strategies, balancing of rice prices and a heavy investment in the rural infrastructure. In as much as globalization has played a significant role in employment expansion in the labor intensive manufacturing organizations thus reducing poverty levels among citizens in China and Indonesia, it is only one of the factors that reduced poverty levels in the nations. Globalization in India has not done so much in transforming the nation’s poverty levels.

Furthermore, the antagonist of benefits of globalization in eradicating poverty draws attention to sub-Saharan African nations that have remained poor despite the free movement of trade and investment. The rate of African population that lives below the poverty line continues to grow daily. Globally, approximately 7 billion, which is 80 % of the population, live below $10 a day (Alias, Abidin, Ping, Muhamad & Rahim, 2014). However, the increased rate of poverty levels in these nations is not solely attributed to globalization but to the failed ethical governance of poor leadership marred by struggle for power and corruption. The pro-globalization agents argue that this situation has a negative impact on globalization since most investors and traders are frightened about advancing in these nations. Furthermore, unstable political conditions in these nations lead to geographical isolation, increase of social stress factors like diseases and a limited number of exports, thus, triggering increased poverty (Sachs, 2005).

Nonetheless, globalization is generally beneficial to the persons with skills, information and entrepreneurship, which sidelines the poor and enriches the rich (Bertucci & Alberti, 2003). Normally, the term poor people refers to the handicapped as a result of their lack of access to capital and opportunities to acquire new skills and knowledge. For instance, in nations like Mexico, employees are losing their jobs as a result of the labor intensive manufacturing to citizens from Asia. Foreign investments in most nations have brought about new employment opportunities, which generally is an overall advantage to address the poverty concern. Nevertheless, these benefits tend to improve only the populations that are involved in international economies affairs. At times, most people in developing nations tend to migrate to these regions, thus, enhancing their incomes. This process is a result of globalization. In Asian developing nations like Vietnam, Bangladesh, and Cambodia, numerous women work in the garment export manufacturing organizations. These women are paid less than what is expected as a global standard but for them it is higher that what they would be getting outside the factories. In as much as there needs to be concern about the payments, focus is shifted to the women who feel better. For example, according to a report by Oxfarm in 2002, a lady called Rahanna employed in garment factory in Bangladesh is quoted saying that despite her job being hard and not being treated fairly, she has to persevere working since life outside the organization is worse. She asserts that she would have less money if she were to go back to her village. The people working in other entities outside the organization and doing much heavier work even receive low payment than what they receive in the garment organization. This is because the poor people have less choices to make due to the constrains they have in life. This means that the poor remain to be poor even with the infiltration of globalization.

A research carried out by two students, Nailed Kabeer and Simeed Mahmud of University of Sussex in England and Bangladesh Institute if Development Studies respectively analyzed what takes pace when such opportunities are lost (Bardhan, 2006). They conducted a survey involving several women employees in Dhaka. According to their findings, the average monthly wage income for the women employees in the export industries was 86 % more than that of the same employees doing the same work but living in slum areas. Therefore, depending on the poverty state of individuals, globalization continues to have negative impacts on the poor.

Another demonstration of how globalization has impacted the existing opportunities for the poor is the determination to find out what happens when such chances resulting from globalization are lost. For instance, in 1993, Bangladesh, in expectancy of a United States ban on imports made out of child labor, discharged more than 50,000 minors from its garment industries. This prompted the UNICEF and local aid groups to probe what happened to the sacked children. According to their findings, nearly 10,000 of the children went back to learning institutions (Bardhan, 2006). The remaining group went to work in more strenuous entities, for example, child prostitution and in mining industries to break stones. In spite of the fact that this does not condone with the worse conditions in the garment industries, advocates of globalization need to understand that the present limited opportunities among the poor people resulting from foreign investment and free trade continue to affect the poor.

Despite all these developments, globalization does not address the real causes of poverty but rather worsen the situation. It is also apparent that apart from bringing new opportunities to the poor people, the international economy is also the cause of problems among the poor populations (Ann, 2007). For example, in as much as the new job openings might be better than the existing ones in the poor societies, this transitioning period can be straining. When these poor people lose their new jobs, there are no social frameworks to help them find new jobs, which worsening their situations. Generally, many of these poor population work on their farms and households to meet their daily needs. The major problems they encounter in their lives are domestic; for instance, lack of access to credit facilities, poor infrastructure, corrupt government officials, and aspects such as land injustices. Their opportunities are further shelved by weak government structures, mass corruption by government leaders and unequal mass distribution of wealth. Therefore, opening international markets as a result of globalization without addressing these elements makes these people to work in a difficult environment that does not help their situation. This only worsens their poverty situations. Nevertheless, opening the economy does not necessarily make the poor poorer if there are effective local policies as well as institutions that are focused on capacity building and development. These institutions and policies need to aim at encouraging production at the same time ensuring there are marketable goods to help employees get into the job market. For instance, in the 1980s, the island economy and Jamaica were having an equal per capita income in accordance with their economic performance. Since Mauritius developed a better government institutions and rule of law, their is a big gap between the two economies. Jamaica would not cope the trend since it has been marred by criminal activities and violence. This is the same case with South Korea and Philippines. In the 1960s, the nations had a similar per capita income. Nevertheless, South Korea is currently being ranked among the developed nations in the world due to its choice of better institutions and development agenda. Philippines, on the other side, remains to be a developing nation due to the failed political structure and institutions it chose, particularly through concentrating power on a few individuals. This means that globalization with a poor structure among poor people continues to increase the gap between the poor and the rich. Therefore, globalization is enhancing poverty in poor nations by not addressing the real causes of poverty first but gets into the system that encourages the poor to remain poor and the rich to excel.

Globalization also enhances the gap between the poor and the rich through lack of coordination of the transnational organizations and other entities with the developing nations together with local aid groups to assist the poor. These collaborations can make an impact on reducing poverty that has remained to be a nightmare for many populations, particularly in the developing nations through numerous ways. For instance, globalization has enhanced the gap between the rich and poor through unfavorable competition in the market monopoly. Most developed nations have well established organizations with superior goods and services. When such products are traded on the international free market, local products from the growing developing nations industries are shelved and they end up losing market. Consequently, these industries end up falling. This results in nations relying on foreign goods that they can produce locally because of an imbalanced foreign exchange income. A reduction in a government’s foreign income means that the only source of income will be domestic. This forces the governments to raise tax, thus, affecting the little income the poor people have. The failing industries also mean that more people are rendered jobless, which increases poverty levels.

Through lack of capital controls, globalization has also enhanced the gap between the poor and the rich. The inflow of global investment in a nation involves both long term and short term capital, for instance, machinery and currency respectively. The short-term investment, particularly currency can shift the economy of a nation within days by damaging the delicate economies of the developing nations. This was the case most Asian nations experienced during the Asian financial crisis in 1997 (Chowdhry & Goyal, 2000). For example, as a result of the investors’ run on the Thai currency (bhat), poverty level in the rural regions in the nation rose dramatically. In Indonesia, following a huge withdrawal of short term capital, there was a sharp decline in the real wages of manufacturing. In this regard, many economists and supporters of globalization held on the fact that there was a need to control the rate of short-term capital, particularly in local financial institutions, which were weak, as this would worsen the poverty rates. China is one of the nations that escaped the Asian financial crisis as a consequence of its strict laws on capital investment. Therefore, for globalization to benefit the poor population, there is a need for capital control flow depending on its impact on the cost of capital in poor nations.

Additionally, the poor nations and people are affected by globalization as a result of increased protectionism. This is one of the major problems that developing nations encounter in the international free trade from the rich nations. The rich nations have many restrictions in their imports and subsidize their own producers, primarily farmers and other manufactures (Neutel & Heshmati, 2006). As a result, the poor producers from developing nations encounter losses due to the tariffs and subsidies from the developed nations resulting from trade barriers. Therefore, globalization affects the poor and the rich through these imports and restrictions, which need to be controlled to favor both parties.

Globalization has also enhanced the gap between the poor and the rich through unfavorable trust busting. This is a situation where exporters in poor developing nations do not access the marketing networks or the branded names to penetrate the rich nations’ consumers, which contravenes the spirit of globalization (Hameed & Nazir, 2009). Despite thet fact that multinational organizations can assists these nations in accessing the rich market for their exports, they can levy heavy fees that will not translate into profits for the developing nations. Moreover, the obstructive business by the international middlemen is also a barrier to these nations. For instance, presently, four organizations have monopolized the coffee market. In the early 1990s, coffee earnings from export nations were about 12 billion and retail sales were 30 billion. In the early 2000s, the sales by retailers had almost doubled, while coffee producing nations’ earnings continued to decrease. The major problem here is not the global markets but the restricted access to these markets and the monopoly being enjoyed by the retail organizations. This is another concept on how globalization is making the rich richer at the expense of the poor working producers.

Therefore, the topic of globalization and poverty has numerous dimensions. Despite the fact that globalization has played significant roles in enhancing the gap between the poor and the rich, that is not necessarily the case. Globalization only enhances poverty in situations where there are failed nations with poor structures to cope with its impacts. However, other cases have seen globalization directly enhance this gap like in protectionism and unhealthy competition. On the other hand, there are several instances that nations have grown from poverty to riches without elements of globalization. To ensure the benefits of globalization in reducing poverty, poor nations need to establish social programs that will address any negative effects of globalization. For instance, it is believed that poor nations need to redistribute their wealth and income so that all people can benefit from the expansion of the economy and share the losses and gains. In as much as this may seem hard to some extent, it will be the only way of balancing a society to come up with a uniform strategy of benefiting from globalization. It is apparent that in most developed nations, the gap between the rich and the poor is minimal as compared to the gap between the rich and poor in developing states. This is because the rich are reaping from globalization while the poor are suffering. Unless the government set up reforms to strike a balance between these classes of people, globalization will continue to be a thorn in the flesh of poor people.

One of the ways that will help developing nations to fill the gap between the poor and the rich is through research. If developing nations can come up with other products that are suitable for the poor, such as crops or medicines, they can help in addressing the poverty situation. For instance, the Green Revolution in Asia was a research that significantly played a major role in reducing poverty in the region. Therefore, anti-globalization campaign alone does not solve the poverty equation among the poor and reduce the gap between the poor and the rich.


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