Resolved: On balance, economic globalization benefits worldwide poverty reduction 3

Globalization Bad

Poverty

Global neoliberalism exacerbates poverty and reifies massive inequalities. Privatization and free trade claim to bolster the economy, but benefits only go to neoliberal corporations and institutions. The poor always end up at the bottom.

Neoliberalism and Economic Globalization

The thrust of international policy behind the phenomenon of economic globalization is neoliberal in nature. Being hugely profitable to corporations and the wealthy elite, neoliberal polices are propagated through the IMF, World Bank and WTO. Neoliberalism favours the free-market as the most efficient method of global resource allocation. Consequently it favours large-scale, corporate commerce and the privatization of resources.

There has been much international attention recently on neoliberalism. Its ideologies have been rejected by influential countries in Latin America and its moral basis is now widely questioned. Recent protests against the WTO, IMF and World Bank were essentially protests against the neoliberal policies that these organizations implement, particularly in low-income countries.

The neoliberal experiment has failed to combat extreme poverty, has exacerbated global inequality, and is hampering international aid and development efforts. This article presents an overview of neoliberalism and its effect on low income countries.

Introduction

Neoliberal policies advocate market forces and commercial activity as the most efficient methods for producing and supplying goods and services. At the same time they shun the role of the state and discourage government intervention into economic, financial and even social affairs. The process of economic globalization is driven by this ideology; removing borders and barriers between nations so that market forces can drive the global economy. The policies were readily taken up by governments and still continue to pervade classical economic thought, allowing corporations and affluent countries to secure their financial advantage within the world economy.

The policies were most ardently enforced in the US and Europe in the1980s during the Regan–Thatcher–Kohl era. These leaders believed that expanding the free-market and private ownership would create greater economic efficiency and social well-being. The resulting deregulation, privatization and the removal of border restrictions provided fertile ground for corporate activity, and over the next 25 years corporations grew rapidly in size and influence. Corporations are now the most productive economic units in the world, more so than most countries. With their huge financial, economic and political leverage, they continue to further their neoliberal objectives.

There is a consensus between the financial elite, neoclassical economists and the political classes in most countries that neoliberal policies will create global prosperity. So entrenched is their position that this view determines the policies of the international agencies (IMF, World Bank and WTO), and through them dictates the functioning of the global economy. Despite reservations from within many UN agencies, neoliberal policies are accepted by most development agencies as the most likely means of reducing poverty and inequality in the poorest regions.

There is a huge discrepancy between the measurable result of economic globalization and its proposed benefits. Neoliberal policies have unarguably generated massive wealth for some people, but most crucially, they have been unable to benefit those living in extreme poverty who are most in need of financial aid. Excluding China, annual economic growth in developing countries between 1960 and 1980 was 3.2%. This dropped drastically between 1980 and 2000 to a mere 0.7 %. This second period is when neoliberalism was most prevalent in global economic policy. (Interestingly, China was not following the neoliberal model during these periods, and its economic growth per capita grew to over 8% between 1980 and 2000.)

The shortcomings of neoliberal policy are also apparent in the well documented economic disasters suffered by countries in Latin America and South Asia in the 1990s. These countries were left with no choice but to follow the neoliberal model of privatization and deregulation, due to their financial problems and pressure from the IMF. Countries such as Venezuela, Cuba, Argentina and Bolivia have since rejected foreign corporate control and the advice of the IMF and World Bank. Instead they have favoured a redistribution of wealth, the re-nationalization of industry and have prioritized the provision of healthcare and education. They are also sharing resources such as oil and medical expertise throughout the region and with other countries around the world.

According to Maria Páez Victor:

“Since 1846 the United States has carried out no fewer than 50 military invasions and destabilizing operations involving 12 different Latin American countries. Yet, none of these countries has ever had the capacity to threaten US security in any significant way. The US intervened because of perceived threats to its economic control and expansion. For this reason it has also supported some of the region’s most vicious dictators such as Batista, Somoza, Trujillo, and Pinochet.”

As a result of corporate and US influence, the key international bodies that developing countries are forced to turn to for assistance, such as the World Bank and IMF, are major exponents of the neoliberal agenda. The WTO openly asserts its intention to improve global business opportunities; the IMF is heavily influenced by the Wall Street and private financiers, and the World Bank ensures corporations benefit from development project contracts. They all gain considerably from the neo-liberal model.

So influential are corporations at this time that many of the worst violators of human rights have even entered a Global Compact with the United Nations, the world’s foremost humanitarian body. Due to this international convergence of economic ideology, it is no coincidence that the assumptions that are key to increasing corporate welfare and growth are the same assumptions that form the thrust of mainstream global economic policy.

However, there are huge differences between the neoliberal dogma that the US and EU dictate to the world and the policies that they themselves adopt. Whilst fiercely advocating the removal of barriers to trade, investment and employment, The US economy remains one of the most protected in the world. Industrialized nations only reached their state of economic development by fiercely protecting their industries from foreign markets and investment. For economic growth to benefit developing countries, the international community must be allowed to nurture their infant industries. Instead economically dominant countries are ‘kicking away the ladder’ to achieving development by imposing an ideology that suits their own economic needs.

The US and EU also provide huge subsidies to many sectors of industry. These devastate small industries in developing countries, particularly farmers who cannot compete with the price of subsidized goods in international markets. Despite their neoliberal rhetoric, most ‘capitalist’ countries have increased their levels of state intervention over the past 25 years, and the size of their government has increased. The requirement is to ‘do as I say, not as I do’.

Given the tiny proportion of individuals that benefit from neoliberal policies, the chasm between what is good for the economy and what serves the public good is growing fast. Decisions to follow these policies are out of the hands of the public, and the national sovereignty of many developing countries continues to be violated, preventing them from prioritizing urgent national needs. Below we examine the false assumptions of neoliberal policies and their effect on the global economy.

Economic Growth

Economic growth, as measured in GDP, is the yardstick of economic globalization which is fiercely pursued by multinationals and countries alike. It is the commercial activity of the tiny portion of multinational corporations that drives economic growth in industrialized nations. Two hundred corporations account for a third of global economic growth. Corporate trade currently accounts for over 50% of global economic growth and as much as 75% of GDP in the EU. The proportion of trade to GDP continues to grow, highlighting the belief that economic growth is the only way to prosper a country and reduce poverty.

Logically, however, a model for continual financial growth is unsustainable. Corporations have to go to extraordinary lengths in order to reflect endless growth in their accounting books. As a result, finite resources are wasted and the environment is dangerously neglected. The equivalent of two football fields of natural forest is cleared each second by profit hungry corporations.

Economic growth is also used by the World Bank and government economists to measure progress in developing countries. But, whilst economic growth clearly does have benefits, the evidence strongly suggests that these benefits do not trickle down to the 986 million people living in extreme poverty, representing 18 percent of the world population (World Bank, 2007). Nor has economic growth addressed inequality and income distribution. In addition, accurate assessments of both poverty levels and the overall benefits of economic growth have proved impossible due to the inadequacy of the statistical measures employed.

The mandate for economic growth is the perfect platform for corporations which, as a result, have grown rapidly in their economic activity, profitability and political influence. Yet this very model is also the cause of the growing inequalities seen across the globe. The privatization of resources and profits by the few at the expense of the many, and the inability of the poorest people to afford market prices, are both likely causes.

Free Trade

With this self interest driving globalization, economically powerful nations have created a global trading regime with which they can determine the terms of trade.

The North American Free Trade Agreement (NAFTA) between the US, Canada, and Mexico is an example of free-market fundamentalism that gives corporations legal rights at the expense of national sovereignty. Since its implementation it has caused job loss, undermined labour rights, privatized essential services, increased inequality and caused environmental destruction.

In Europe only 5% of EU citizens work in agriculture, generating just 1.6% of EU GDP compared to more than 50% of citizens in developing countries. However, the European Common Agricultural Policy (CAP) provides subsidies to EU farmers to the tune of £30 billion, 80% of which goes to only 20% of farmers to guarantee their viability, however inefficient this may be.

The General Agreement on Trade and Services (GATS) was agreed at the World Trade Organization (WTO) in 1994. Its aim is to remove any restrictions and internal government regulations that are considered to be "barriers to trade". The agreement effectively abolishes a government’s sovereign right to regulate subsidies and provide essential national services on behalf of its citizens. The Trade Related agreement on International Property Rights (TRIPS) forces developing countries to extend property rights to seeds and plant varieties. Control over these resources and services are instead granted to corporate interests through the GATS and TRIPS framework.

These examples represent modern free trade which is clearly biased in its approach. It fosters corporate globalization at the expense of local economies, the environment, democracy and human rights. The primary beneficiaries of international trade are large, multinational corporations who fiercely lobby at all levels of national and global governance to further the free trade agenda.

Liberalization

The World Bank, IMF and WTO have been the main portals for implementing the neoliberal agenda on a global scale. Unlike the United Nations, these institutions are over-funded, continuously lobbied by corporations, and are politically and financially dominated by Washington, Wall Street, corporations and their agencies. As a result, the key governance structures of the global economy have been primed to serve the interests of this group, and market liberalization has been another of their key policies.

Global capitalism causes savage inequalities – their examples are historical anomalies and mathematically false

Their statistics are biased reject them

5) Poverty. One of the most common arguments for global capitalism is that it helps alleviate poverty. Problem is, global poverty statistics are generated by the World Bank, an institution explicitly designed to promote globalization. Critics argue that (1) the numbers are usually skewed by one or two rapidly developing countries, (2) the definition of deep poverty as a wage of $1.25/day is set arbitrarily low in order to yield the desired stats, and (3) daily wages say nothing about access to potable water, adequate nutrition, healthcare, education, community, and other things that determine quality of life. Moreover, poverty rates mean little when economic disparity has increased so dramatically in recent decades. Actually, a compelling argument can be made that global capitalism doesn’t alleviate poverty but causes poverty. After all, the aim of globalization is to expand markets by infiltrating “undeveloped” (read: self-sufficient) communities and dragging them into the money economy, thus creating new laborers and consumers. Could members of a gift-based, indigenous tribe really be called “poor”? Only by the logic of capitalism, which defines poverty as the inability to purchase one’s basic necessities (which might include designer clothing) from an outside party using fiat currency.

Their argument is misleading – even if poverty is being reduced social inequality is sky-rocketing

Harvey Distinguished Professor at the Graduate Center of the City University of New York 2006 David A Conversation with David Harvey Logos 5.1 http://www.logosjournal.com/issue_5.1/harvey.htm

I’ll respond in two ways, there is a lot of controversy over the kind of data you look at and how you prove that. For instance if you ask the question of how many people were in poverty in 1980 and how many people there are in poverty today, you might say, there are fewer people in poverty now than there was back then. But when you look at the economic performance, of say China and India, and you look at the aggregate data, it looks like the world is better off. If you start to look at social inequality however, you start to see in many instances, that neo-liberalization has increased social inequality, even at the same time that it has lifted some of the people at the bottom out of poverty. If you look at the concentration of wealth, at the very top bracket of society, you will see immense concentrations of wealth at the very top 0.1% of the population.

At this point the question is: who is neo-liberalization really benefiting? And if you look at concentrations of political and economic power, it has largely benefited a very very small elite. And we have to start looking at that. For instance, the New York Times had this interesting data a couple of months ago. How rich, on average, are the richest 200 (or 400) families in the United States? I think the data showed that back in 1980, they had something like $680 million. In constant dollars it is something like $2.8 billion. They have quadrupled their wealth in the last twenty years and this is a familiar story not just in the U.S but also globally. In Mexico, after neo-liberalization, you see the same thing. You see the same think happening in China and in India. When Thomas Friedman talks about a flat world, he is saying you do not have to come to America to be a billionaire; you can be a billionaire in Bangalore now. You do not have to migrate to America, but the social inequality in India is increasing dramatically.
Global capitalism makes social inequality inevitable

Wise et al. (Director of Doctoral Program in Migration Studies & Prof of Development Studies; Universidad Autónoma de Zacatecas, Mexico) 10

(Raúl Delgado Wise, Humberto Márquez Covarrubias, Rubén Puentes, Reframing the debate on migration, development and human rights: fundamental elements, October, 2010, www.migracionydesarrollo.org)

At the end of the first decade of the 21st century, a general crisis centered in the United States affected the global capitalist system on several levels (Márquez, 2009 and 2010). The consequences have been varied: Financial. The overflowing of financial capital leads to speculative bubbles that affect the socioeconomic framework and result in global economic depressions. Speculative bubbles involve the bidding up of market prices of such commodities as real estate or electronic innovations far beyond their real value, leading inevitable to a subsequent slump (Foster and Magdof, 2009; Bello, 2006). Overproduction. Overproduction crises emerge when the surplus capital in the global economy is not channeled into production processes due to a fall in profit margins and a slump in effective demand, the latter mainly a consequence of wage containment across all sectors of the population (Bello, 2006). Environmental. Environmental degradation, climate change and a predatory approach to natural resources contribute to the destruction of the latter, along with a fundamental undermining of the material bases for production and human reproduction (Fola- dori and Pierri, 2005; Hinkelammert and Mora, 2008). Social. Growing social inequalities, the dismantling of the welfare state and dwindling means of subsistence accentuate problems such as poverty, unemployment, violence, insecurity and labor precariousness, increasing the pressure to emigrate (Harvey, 2007; Schierup, Hansen and Castles, 2006).

The crisis raises questions about the prevailing model of globalization and, in a deeper sense, the systemic global order, which currently undermines our main sources of wealth—labor and nature—and overexploits them to the extent that civilization itself is at risk. The responses to the crisis by the governments of developed countries and international agencies promoting globalization have been short-sighted and exclusivist. Instead of addressing the root causes of the crisis, they have implemented limited strategies that seek to rescue financial and manufacturing corporations facing bankruptcy. In addition, government policies of labor flexibilization and fiscal adjustment have affected the living and working conditions of most of the population. These measures are desperate attempts to prolong the privileges of ruling elites at the risk of imminent and increasingly severe crises. In these conditions, migrants have been made into scapegoats, leading to repressive anti- immigrant legislation and policies (Massey and Sánchez, 2006). A significant number of jobs have been lost while the conditions of remaining jobs deteriorate and deportations increase. Migrants’ living standards have drastically deteriorated but, contrary to expectations, there have been neither massive return flows nor a collapse in remittances, though there is evidence that migrant worker flows have indeed diminished.

Globalization correlated with rising poverty in Mexico

F. Wu, economist, Cardiff University, 2012, International Encyclopedia of Housing and Home, “Globalisation,” pp. 292-7

Most of the existing empirical literature on the effect of trade liberalization on inequality in Mexico focuses on the wage earners and shows a rise in income inequality on account of an increase in the relative demand for, and the relative returns to, skilled labor. As the self-employed, accounting for one-third of the labor force, are one of the vulnerable groups in the economy, operating almost entirely in the informal sector, Popli examines the trend in income inequality and poverty among the self-employed workers in Mexico for the two decades (1984–02), during which Mexico opened its economy to the global market through trade and investment liberalization. Under the impetus of increased competition furthered by the liberalization process, the informal sector is seen to expand in the need to absorb negative income shocks as workers in the formal sectors are laid off, giving rise to the fear of “social exclusion” of the self-employed.

Popli finds that inequality and poverty increased among the self-employed during the first decade following trade liberalization; however, during the second decade, she observes that as the economy stabilized while experiencing economic growth, inequality started to go down, but poverty kept increasing, recording a doubling of the headcount ratio from 21% in 1984 to 40% in 2002. Most of the increase took place after the 1995 peso crisis. More generally, the poverty incidence among the self-employed follows closely the economic cycles. To understand these changes in inequality and poverty in relation to the self-employed workers, she decomposes the inequality and poverty indices into within and between group effects—employing well-established decomposition methods.

Trade reduces the demand for skilled labor and worsens wage distribution

Anish Bharadwaj, 2014, International Max Planck Research School for Competition and Innovation, Munich Centre for Innovation and Entrepreneurship Research, Advances in Economics and Business

2(1): 42, p. 42-57
Trade liberalization may also lead to higher poverty by reducing the demand for unskilled labor (not only in import-substitution industries but also in other sectors as well) and a worsening of wage income distribution. In a number of countries in Latin America and Asia, openness to trade during the 1980s and 1990s has coincided with an increase in the demand of, and the return to, skilled labor relative to unskilled labor, and a worsening of wage inequality (Robbins, 1996 and Harrison & Hanson, 1999).
A possible explanation of this phenomenon is that trade liberalization has been associated with the introduction of higher-level technology, the use of which requires skilled labor.
The reason is that the cost of (imported) capital depends not only on the relative price of capital goods but also on tariffs that are incurred in purchasing a unit of capital goods abroad. To the extent that a fall in tariffs translates into a fall in the cost of capital, a high degree of complementarity between skilled labor and capital, and a high degree of substitutability between unskilled labor and capital, would indeed entail an increase in the demand for skilled workers – thereby leading to a widening of the wage gap between skilled and unskilled labor4.
The reduction in the demand for unskilled labor may translate into higher unemployment for that category of labor and increased poverty

Trade reduces human capital investment

Anish Bharadwaj, 2014, International Max Planck Research School for Competition and Innovation, Munich Centre for Innovation and Entrepreneurship Research, Advances in Economics and Business

2(1): 42, p. 42-57
The link between trade openness and the accumulation of human capital is important to understand the long-run effects of globalization on poverty. Do open trade regimes lead to high investment in human capital in developing countries? Some theoretical models actually predict that free trade may lead to a decrease in the accumulation of human capital in countries that are initially skills-scarce. Findlay and Kierzkowski (1983), for instance, using a model in which capital markets are perfect, showed that the accumulation of human capital (and thus the supply of skilled labor) in countries that are initially skills-scarce falls when the rewards to education are reduced by the availability of cheaper, skills-intensive import goods. If human capital formation has spillover effects on growth (as in endogenous growth models of the Lucas-Romer variety), trade liberalization may thus lead to higher poverty rates.

Financial integration subjects the poor to economic shocks and is driven by inequality

Anish Bharadwaj, 2014, International Max Planck Research School for Competition and Innovation, Munich Centre for Innovation and Entrepreneurship Research, Advances in Economics and Business

2(1): 42, p. 42-57
A key problem associated with financial openness, as Agenor (2004) points out, is that access to world capital markets tends to be asymmetric. Many developing countries (including some of the richer ones) are able to borrow on world capital markets only in “good” times, whereas in “bad” times they tend to face credit constraints. Access is thus pro-cyclical. Clearly, in such conditions, one of the alleged benefits of accessing world capital markets (the ability to borrow to smooth consumption in the face of temporary adverse shocks), is nothing but a fiction (Agenor, 2003). Pro-cyclacality may, in fact, have a perverse effect and increase macroeconomic instability (Dadus et al, 2000). This can be understood in the following manner. Favorable shocks may attract large capital inflows and encourage consumption and spending at levels that are unsustainable in the longer term, forcing countries to over-adjust to adverse shocks as a result of abrupt capital reversals. The impact on poverty may thus be magnified
In recent years, financial globalization in many transition and developing economies has taken the form of greater penetration of the domestic financial system by foreign banks.. Agenor (2003) explains this lucidly: “Unlike trade liberalization, which has often resulted from unilateral decisions by governments to lower tarrifs, this form of financial integration has often been less a matter of choice than a decision imposed by the country’s situation – in several cases, the need to recapitaslize domestic banks in the aftermath of a banking crisis.” Although there are potentially large benefits associated with greater foreign penetration (such as enhanced quality of financial services, better techniques for credit analysis, and reduced risks of domestic financial instability), which may translate into higher growth rates and lower poverty, there are potentially adverse effects as well.

Globalized credit market hurts the poor

Anish Bharadwaj, 2014, International Max Planck Research School for Competition and Innovation, Munich Centre for Innovation and Entrepreneurship Research, Advances in Economics and Business

2(1): 42, p. 42-57
Another channel through which financial openness may have an adverse effect on the poor (at least in the short run) is the credit market. As argued by Agénor and Aizenman (1998, 1999),6 the increased exposure to volatile shocks that is associated with financial openness may translate into higher domestic interest rates (because of the increased risk of default), lower domestic output, and thus possibly higher poverty rates. The key reason is that increased volatility (of world interest rates, in particular) raises expected intermediation costs and lead domestic financial institutions (whose ability to enforce loan contracts is limited) to either increase domestic interest rates or to ration credit to maintain expected profits. Of course, what this argument implies is not that financial openness per se is undesirable, but rather that financial integration should be accompanied by adequate reforms of the domestic financial system to minimize the adverse effects of volatility on output, employment, and poverty

Globalization causes capital flight

Anish Bharadwaj, 2014, International Max Planck Research School for Competition and Innovation, Munich Centre for Innovation and Entrepreneurship Research, Advances in Economics and Business

2(1): 42, p. 42-57
In addition to level effects associated with greater exposure to volatility, financial openness may also have adverse effects on growth and, through that channel, on poverty. If financial openness is accompanied by capital flight, the lower rate of accumulation of domestic capital that may result could be associated with a persistent, adverse effect on growth in the presence of increasing returns driven by externalities in knowledge and capital formation (Song, 1993).

Financial crises threaten the poor

Anish Bharadwaj, 2014, International Max Planck Research School for Competition and Innovation, Munich Centre for Innovation and Entrepreneurship Research, Advances in Economics and Business

2(1): 42, p. 42-57
Another significant result of Harrison (2006) is that financial crises turn out to be very costly to the poor. Poverty rates in Indonesia increased by at least 50 percent after the currency crisis in 1997. Cross-country evidence also suggests that financial globalization leads to higher.consumption and output volatility in low income countries. One implication is that low income countries are more likely to benefit from financial integration if they also create reliable institutions and pursue macroeconomic stabilization policies (including the use of flexible exchange rate regimes). Unrestricted foreign capital flows are generally associated with high poverty rates among less developed countries

Foreign investment undermines local profits

Anish Bharadwaj, 2014, International Max Planck Research School for Competition and Innovation, Munich Centre for Innovation and Entrepreneurship Research, Advances in Economics and Business

2(1): 42, p. 42-57
A major challenge of foreign direct investment (FDI) for an emerging economy is the retention of some of the profits earned by the investing firm. If none of the benefits of FDI is reinvested in the local economy, then the investment is not worthwhile for the emerging economy. FDI may also slowdown growth and lower the real income of the country, if the FDI worsens the terms of trade of the country.

Shocks make transitory poverty permanent

Anish Bharadwaj, 2014, International Max Planck Research School for Competition and Innovation, Munich Centre for Innovation and Entrepreneurship Research, Advances in Economics and Business

2(1): 42, p. 42-57
More importantly, severe shocks can turn transitory poverty into a permanent phenomenon. Even a transitory loss of income can cause the poor to lose opportunities to acquire human capital through education, health care, and nutrition and thus affect their ability to get out of poverty in the future. Third, the poor may not be tightly linked to the formal economy and generally subsist in the urban informal sector or in rural subsistence agriculture. Thus, trade policy reform that seeks to be sensitive to its effect on the poor will not be able to ignore these sectors.

African exports mean inequality and poverty

Oxfam Briefing Paper, 2014, Working for The Few, http://www.oxfam.org/sites/www.oxfam.org/files/file_attachments/bp-working-for-few-political-capture-economic-inequality-200114-en_3.pdf

Economic inequality is rapidly increasing in the majority of countries. The wealth of the world is divided in two: almost half going to the richest one percent; the other half to the remaining 99 percent. The World Economic Forum has identified this as a major risk to human progress. Extreme economic inequality and political capture are too often interdependent. Left unchecked, political institutions become undermined and governments overwhelmingly serve the interests of economic elites to the detriment of ordinary people. Extreme inequality is not inevitable, and it can and must be reversed quickly.
New natural resource discoveries are driving an explosion of economic growth in sub-Saharan Africa. GDP in oil-rich countries like Equatorial Guinea and Angola has grown at average annual rates of more than 10 percent since 2000. Exports of oil, natural gas, metals, and minerals are also behind strong growth in Tanzania, Zambia, the Democratic Republic of Congo, Mali, and Namibia.43 However, though several African countries are among the faster growing economies in the world, inequality remains rampant, hindering the rate of poverty reduction.44 In fact, there is a positive correlation between the level of resources African countries export and their levels of inequality (as measured by the Gini coefficient).45

In countries with weak regulatory institutions, some companies undervalue the assets on which they pay royalties and taxes. As the individuals and companies involved in these extractive corporations and their political allies become rich, less and less attention is paid to efforts to reduce poverty and inequality.

Globalization means resource exploitation and waste dumping in Africa

Derrick Owusu-Kodu, April 7, 2014, Poverty and the Impacts of Globalization on the African Economy,

http://www.africandynamo.com/2014/04/poverty-and-impacts-of-globalization-on.html#mM4cowGoocBOQhUe.99 DOA: 1-2-15
After centuries of colonization, slavery, exploitation, marginalization and excruciating poverty, African politicians have yet to grasp the nature of manipulable globalization. Years of relative economic retrogression have taken a horrendous toll on all parts of the African economy. To add insult to injury, the African continent inadvertently welcomes with open arms a colossal dose of the negative impacts of globalization. The nature of the African economy itself continues to limit gains from the enormous opportunities in the liberal globalization. Clearly, globalization by all odds has enabled the African continent to be used as a tolerating and warm-welcoming place for natural resource exploitation and industrial waste dumping. Economies lacking innovation and value creation are largely to blame for these huge miscalculations, and the lopsided relationships.

Globalization leads to the feminization of poverty and human trafficking

Dana Ragorski, law professor, University of Washington, Indiana International &Comparative Law Review, Vol. 25, Forthcoming , University of Washington School of Law Research Paper No. 2014-24, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2473738 DOA: 1-2-15

Millions of people are trafficked all over the world and enslaved in forced labor in a broad range of industries. Yet, the global community’s efforts to mitigate trafficking have fallen short. This Article argues that the lack of success in fighting human trafficking is to a large extent the result of framing the existing discourse of human trafficking as a matter of criminal law and human rights of women and children, rather than addressing the economic and global market conditions within which human trafficking thrives. Human trafficking is a multi-dimensional issue exacerbated by poverty and disparities in economic opportunities vis-a-vis unmet labor demands and strict migration laws in wealthier countries. It thrives on the vulnerability of certain individuals and populations to exploitation, and particularly those who may desire to migrate in hope of better economic opportunities. Human trafficking is also very much a manifestation of the feminization of both poverty and migration. The dominant gendered narrative, however, continues to marginalize both the impact on and the role of women, children and migrant workers in the global economy, and ignores the complex structural, social and economic aspects of women’s labor migration.
The Article specifically highlights vulnerabilities to trafficking and exploitation brought upon by globalization, the feminization of labor migration, and the links between irregular migration and human trafficking. Migrant workers, particularly migrant women, are playing an increasingly critical role in sustaining the global economy. Poor women (of color) in developing countries comprise most of those emigrating for survival, and relatedly, the overwhelming majority among those who are exploited in the process and subject to trafficking. Nonetheless, the international community has been reluctant to fully investigate and act upon the linkage between trafficking and migrant labor. Even more importantly, the current discourse on trafficking fails to admit that human trafficking is the "underside of globalization." There is no commitment to reframe trafficking as a global migratory response to a global market that seeks out cheap, unregulated, and exploitable labor and the goods and services that such labor can produce. Instead, this Article argues, we need to develop an economic analysis of human trafficking–one which primarily looks at globalization, trade liberalization and labor migration as the core areas that need to be explored to advance the prevention of human trafficking.

Globalization threatens women in the global South

Dana Ragorski, law professor, University of Washington, Indiana International &Comparative Law Review, Vol. 25, Forthcoming , University of Washington School of Law Research Paper No. 2014-24, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2473738 DOA: 1-2-15

Globalization has had a particularly harsh impact on women in the “global south,” and it is critical that we recognize the “systemic link between the growing presence of women from developing countries in a variety of global migration and trafficking circuits on one hand and the rise in unemployment and debt in those same economies on the other.”113 Women in developing countries who may have been able to participate in the formal economy through small locally owned businesses and farms may no longer have those opportunities and lose out to cheaper imported goods. They are consequently pushed into the informal sector or into low-skilled manufacturing and service jobs generated by the entrance of transnational corporations into developing economies.114 Quite often those corporations are allowed to get away with adverse working conditions and low wages in their “global assembly line.” Such employers may even prefer female workers from disadvantaged background as they take advantage of deeply imbedded gender subordination in traditional societies and assume that these workers are likely to be more submissive and less likely to resist exploitive work conditions.115

Globalization increased poverty in many developing countries

Okungbowa, Florence. O. Ewere, Eburajolo, Ose Courage, Benson Idahosa University

Department of Economics, Banking and Finance Benin-City, Nigeria, September 2014, International Journal of Humanities and Social Science, Globalization and Poverty Rate in Nigeria; An Empirical Analysis, http://www.ijhssnet.com/journals/Vol_4_No_11_September_2014/13.pdf DOA: 1-2-15
The relationship between globalization and poverty level has been a subject of prolonged and unresolved debate both in the developed and developing nations. Many scholars are of the opinion that globalization has actually reduced poverty in the developed countries, but one may not be categorical in the case of the less developed countries. Oyewale and Amusat (2013) viewed globalization as a borderless world with greater economic integration that is meant to enhance the living standards of people across the globe, but most developing countries

in Africa, Asia and Latin America have been victims rather than beneficiaries of the globalization process especially as poverty and income inequality increased in the last two decades.

A curious look at the Nigerian economy shows that despite the high rate of openness, poverty is still highly visible.

Globalization raises unemployment, which drives people into poverty

Okungbowa, Florence. O. Ewere, Eburajolo, Ose Courage, Benson Idahosa University

Department of Economics, Banking and Finance Benin-City, Nigeria, September 2014, International Journal of Humanities and Social Science, Globalization and Poverty Rate in Nigeria; An Empirical Analysis, http://www.ijhssnet.com/journals/Vol_4_No_11_September_2014/13.pdf DOA: 1-2-15
In the same vein, Ghimire (2006), in his work on the effect of globalization on poverty stated vehemently that globalization creates tensions especially within nations and companies between those who have the skills and resources to compete in the global market and those who do not. He stressed further that this disparity is capable of creating high unemployment rate which therefore drives the people further into poverty.

Globalization means many producers lose, increasing poverty

Raphael Kaplinsky, Professor of International Development, 2005, Globalization, Poverty, and Inequality: Between a Rock and a Hard Place, page number at end of card

In considering these issues, we begin with a brief excursion into the theory of the terms of trade (section 7.1), since this provides an important backdrop for assessing the overall outcome of global specialization. This will be followed by a review of some of the major factors which might lead to a win– win outcome from deepened globalization in the production and exchange of manufactures (section 7.2). It begins with a discussion of the theoretical explanation for such mutual gains and considers some of the evidence to back these assumptions. In section 7.3 we question this win– win outcome by focusing on the realism of these abstract theoretical assumptions in the context of the real world of the early twenty-first century. We conclude with a pessimistic view that, while the workings of the global economy may be positive for some producers, they are unlikely to work to the benefit of many other producers. In these circumstances, a significant degree of poverty and inequality are relational outcomes of globalization. They arise as a direct consequence of excess global capacity and constrained global consumption, and lead to a race to the bottom in real incomes. Kaplinsky, Raphael (2013-04-29). Globalization, Poverty and Inequality: Between a Rock and a Hard Place (Kindle Locations 3370-3372). Wiley. Kindle Edition.

Increased trade contributes to the growth of slums

Raphael Kaplinsky, Professor of International Development, 2005, Globalization, Poverty, and Inequality: Between a Rock and a Hard Place, page number at end of card

More importantly for our analysis, they are an outcome of the very success of globalization in two important respects. First, as we saw in chapter 7, the displacement of labour which results from reducing impediments to trade has contributed to the growth of slums. And, second, the extension of global product markets has depended on the development of global brands. These brands are backed by advertising, not just the explicit ‘in-your-face’ hoardings which increasingly dominate the cityscape, but also the more subtle subliminal offerings such as ‘product placements’ of key global brands in films. Much of this branding is culturally specific, with an emphasis on sexuality which is anathema to many religious groups. Kaplinsky, Raphael (2013-04-29). Globalization, Poverty and Inequality: Between a Rock and a Hard Place (Kindle Locations 4374-4380). Wiley. Kindle Edition.

Capitalism puts hundreds of millions of people in poverty

John Hillary, 2013, Journalist, The Poverty of Capitalism, page number at end of card

Of the many consequences of the global economic meltdown that swept the world from 2008 onwards, perhaps the most important for the long term was that it exposed to public attention the true nature of the capitalist world system in the modern age. The immediate trigger for the Great Recession may have been a liquidity crisis brought on by mass panic at the bursting of the US housing bubble, once it was realised that no one could predict to what extent the world's banking system was contaminated with toxic debt. Yet it soon became clear that there was something rotten in the state of the global economy far beyond the greed and grasping of a few creative financiers. Most obviously, the crisis served to reveal the economic, social and ecological imbalances that had developed over the previous three decades of neoliberal globalisation, a period during which states had granted unprecedented powers to capital while steadily undermining the privatisation, liberalisation and deregulation had aimed at nothing less than a second ‘great transformation’ to rival the free market fundamentalism of the nineteenth century, directing state intervention away from social redistribution towards an unambiguous role as enforcer of the enduring freedoms of capital. 1 Any suggestion that these freedoms would be to the greater benefit of society was finally laid to rest in 2008, as unimaginable sums of public money were commandeered to rescue the system from itself. Yet in addition to exploding once again the myth of the self-regulating market, the global economic meltdown also stimulated recognition of a more profound truth: that independently of the excesses of neoliberalism, the massive accumulation of capital at the core of the system offers only crisis and poverty to hundreds of millions of people across the world. Hilary, John (2013-10-09). The Poverty of Capitalism: Economic Meltdown and the Struggle for What Comes Next (Kindle Locations 191-198). Pluto Press. Kindle Edition.

Globalization increases poverty in the South in order to increase poverty

John Hillary, 2013, Journalist, The Poverty of Capitalism, page number at end of card

This book seeks to challenge the notion that transnational capital is a benign force in the service of humanity, and to set against that orthodoxy the evidence of its actual operations around the world. The international focus of the book is deliberate and necessary, as the most extreme injustices of the system are manifest in its relations with the peoples of the majority world, forced to survive their integration into the global economy in situations of incomparable stress and insecurity. impoverishment of the peoples of the global South, incorporated into the bottom of global value chains so as to generate ever greater profits for those at the top, is a lasting reminder that the programme of corporate globalisation was developed not for public benefit but to further the interests of the few. Years of low inflation and cheap credit allowed the champions of neoliberalism to conceal this reality from people in the rich world, and to sustain the central myth of globalisation as a ‘win-win’ or positive sum equation. This book seeks to restore the experience of the peoples of the majority world to a debate from which they are invariably excluded. 9 Hilary, John (2013-10-09). The Poverty of Capitalism: Economic Meltdown and the Struggle for What Comes Next (Kindle Locations 261-266). Pluto Press. Kindle Edition.

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