Making Globalization Work For The Poor

By M. Isi Eromosele

One in five of the world’s population, two thirds of them women live in abject poverty, in a world of growing material plenty. The new millennium offers a real opportunity to eliminate world poverty. This is the greatest moral challenge facing our generation.

Globalization creates unprecedented new opportunities and risks. If the poorest countries can be drawn into the global economy and get increasing access to modern knowledge and technology, it could lead to a rapid reduction in global poverty as well as bringing new trade and investment opportunities for all.

If this is not done, the poorest countries will become more marginalized and suffering and division will grow. And we will all be affected by the consequences.

In order to make globalization work for the poor, there is need for not just strong and vibrant private sectors, but also effective governments and strong and reformed international institutions.

We all need to work collectively to tackle the problems of conflict and corruption, boost investment in education and health, spread the benefits of technology and research, strengthen the international financial system, reduce barriers to trade, tackle environmental problems and make development assistance more effective.

The Challenges Of Globalization

The central challenge we face today is to ensure that globalization becomes a positive force for the entire world’s people, instead of leaving billions of them behind in squalor. Inclusive globalization must be built on the great enabling force of the global market, but market forces alone will not achieve it.

It requires a broader effort to create a shared future, based upon a common humanity in all its diversity

Making globalization work more effectively for the world’s poor is a moral imperative. It is also in the world’s common interest. Many of the world’s contemporary challenges -war and conflict; refugee movements; the violation of human rights; international crime, terrorism and the illicit drugs trade; the spread of health pandemics like HIV/AIDS and environmental degradation are caused or exacerbated by poverty and inequality.

This mutual dependence is particularly clear in the case of population growth and environmental degradation. In the next 25 years around 2 billion people will be added to the world’s population, 97 per cent of them in developing countries.

There will be a further shift of population from the rural areas to the towns, with an estimated 61 per cent of the world’s population living in urban areas by 2025.

These demographic changes will create huge new demands. Managed badly, this could lead to growing conflicts over scarce resources, particularly water and new social tensions that could easily spill over national borders.

There can be no secure future for any of us wherever we live unless we promote greater global social justice worldwide.

Progress is dependent on developing country leadership. But some of the resources needed will have to be provided by the international community. A sustainable global environment and effective vaccines against communicable diseases are just two examples of the global public goods that can and should be financed internationally.

Opportunities Of Globalization

Globalization means the growing interdependence and inter-connectedness of the modern world. This trend has been accelerated since the end of the Cold War. The increased ease of movement of goods, services, capital, people and information across national borders is rapidly creating a single global economy.

The process is driven by technological advance and reductions in the costs of international transactions, which spread technology and ideas, raise the share of trade in world production and increase the mobility of capital.

It is also reflected in the diffusion of global norms and values, the spread of democracy and the proliferation of global agreements and treaties, including international environmental and human rights agreements.

Globalization is also characterized by the growth of transnational companies, which now account for about a third of world output and two-thirds of world trade. Around a third of world trade takes place within transnational companies, between subsidiaries of the same corporation based in different countries.

Managed wisely, the new wealth being created by globalization creates the opportunity to lift millions of the world’s poorest people out of their poverty. Managed badly and it could lead to their further marginalization and impoverishment.

Neither outcome is predetermined; it depends on the policy choices adopted by governments, international institutions, the private sector and civil society.

Globalization brings with it rapid change. And this has generated uncertainty and anxiety amongst millions of people across the world. It has also raised legitimate public concerns, for example about the impact of globalization on people’s culture, the environment, inequality within and between countries and the effect on the world’s poorest people.

However, throughout human history, exposure to outside influence has tended to enrich, rather than impoverish individuals and societies. Globalization has accelerated this process and produced elements of a global culture. But it has also encouraged a re-assertion of local cultural identity and, in many cases, greater respect for diversity and pluralism.

The risk of a global monoculture of values and aspirations is vastly greater if the developing world remains poor and marginalized rather than an equal and respected part of a rich international diversity of culture and language.

Stronger international institutions and a much stronger commitment to sustainable development at the national and the international level are needed to help the world shift to more sustainable patterns of production and consumption.

But if the world remains deeply divided and the poorest countries believe that improved environmental standards will prevent or hinder their development, international agreement to protect global environmental resources will become impossible. A world commitment to sustainable development is dependent on the guarantee of

development for the poor.

Through expanding access to ideas, technology, goods, services and capital, globalization can certainly create the conditions for faster economic growth.

And the progress which has been made over the last few decades in reducing the proportion of people living in poverty has been largely the result of economic growth: raising incomes generally including those of poor people. Economic growth is an indispensable requirement for poverty reduction.

The reality is that all profound economic and social change produces winners and losers. The role of government in these circumstances is to help manage the process of change to maximize economic opportunities for all and to equip people through education and active labor market policies, to take advantage of these opportunities.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

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