Globalization and World Poverty

GLOBALIZATION AND WORLD POVERTY

When we address the subject of globalization and poverty, there are a lot of wrong assumptions to be made by the general public. Many anti-globalization movements talk about the cruelties caused by international trade. What they really should be talking about is the misbehaviour of corporate industries within the current of globalization.
Globalization itself is a rather ancient phenomenon that we can trace back to the earliest days of trade between nations. And as we look at history, we can see clearly that globalization and international trade have proven to be the foundation of economic development through division of labour. Nevertheless, a lot of events unworthy to humanity have occurred while carrying out the flag of international trade. It is therefore the crucial mission of any humanitarian or trade organization to make sure that no such things as isolation, discrimination or even slavery can occur during an act of corporate irresponsability. We should all point at multinationals to take their role in economic development seriously. What we should not do, however, is pointing them out the door, leaving developing countries behind without even a glimpse of hope for a better future.
Foreign investments are critical for impoverished nations and should be encouraged and backed by official development assistance to cover up for shortcomings in basic infrastructure.This infrastructural shortage is the direct result of an extreme poverty. Generally and in theory, extreme poverty is referred to as having a daily income below 1 USD. In reality this means that households have little to zero savings. Needless to say that in such circumstances, there is absolutely no chance for investments to be made.
The absence of sufficient savings to ensure investments and economic progress is what is called the poverty trap. And it is exactly this trap that should be redressed when we want to talk about development assistance. By injecting sufficient funds it is possible to start the engine that will move a nation allong the path of economic development. Of course, the investment strategy should be based on what Professor Jeffrey Sachs (Columbia University) calls a 'differential diagnosis', meaning that special attention should be given to a country's specific economical, geographical and cultural background. This highly integrated strategy can only be achieved by combining the knowledge of major international institutions such as the IMF, WTO and the various specialized UN agencies.
Exact calculations and even repeated commitments have been made in order to provide the necessary funds to enable the extermination of extreme poverty worldwide. As stated in the UN Millenium Project, an annual 0.7% of the rich countries' GNP should be enough to lift the developing countries out of the poverty trap and push them up the ladder of economic progress. Until today however, only a mere five out of twenty-two countries have enforced their promises through foreign aid budgets. The major culprit given its duties is ironically the country that refers to itself as the greatest power on the surface of the Earth. I am of course pointing at the United States of America. And I hope that they will soon realize that the vast costs of their military power are totally out of proportion compared to their miniature foreign aid budget. With the latter being the genuine threat to their national security.

We can trade the same coin over many a nation, can we do the same with love and respect?


Note: This article is greatly inspired by the book 'The End of Poverty' by Prof. Jeffrey Sachs (Columbia University).