Globalisation effective in reducing poverty? Flashcards
(5 cards)
1- economic growth -
Globalisation has driven global economic growth, reducing poverty. Between 2000–2024, global GDP tripled. Extreme poverty fell from 35% in 1990 to 9% in 2019 (World Bank).
China’s integration into global markets after WTO accession in 2001 lifted 800 million people out of extreme poverty (poverty fell from 88% in 1981 to <1% by 2019), showcasing how globalisation can drive poverty reduction through industrialisation and export-led growth.
Against:
However, this growth has often come at the expense of labour rights. Globalisation has led to a “race to the bottom,” exploiting workers in low-cost economies.
Example: Bangladesh’s garment sector—millions work in dangerous, poorly paid jobs (~$95/month). The 2013 Rana Plaza collapse killed over 1,100 workers, illustrating this exploitation.
Moreover, rich Western countries continue to dominate global supply chains, capturing most value (e.g. MNCs like Apple, Amazon), leaving labouring nations trapped in poverty cycles.
Judgement:
Despite serious labour issues, globalisation has clearly delivered unprecedented poverty reduction, especially in China.
1- economic
2- spread of free market capitalism
Globalisation spreads free market capitalism, fostering development through deregulation, privatisation, and liberalisation. Modernisation theory argues that globalisation has advanced the global economy and reduced poverty by spreading capitalism and free market principles.
As nations integrate into the global economy, they adopt free market economic practices such as deregulation, privatisation, and market liberalisation.
This attracts FDI, promotes innovation, and creates jobs.
India’s 1990s reforms led to 6–7% annual growth, particularly in IT/services. Poverty fell from 45% in 1993 to ~6% in 2024.
Against:
Modernisation theory’s assumptions are flawed; inequality has deepened. Rapid growth in countries like China/South Korea involved significant state intervention, not pure free-market models.
Globally, wealth inequality is stark: the richest 1% control 38% of wealth; the poorest 50% hold <2%.
Rural communities have also been displaced — in India, 50 million people lost land to globalisation-driven projects, often falling deeper into poverty.
Judgement:
Globalisation has reduced poverty, but not through free market capitalism alone — state intervention and careful management were key. Free market globalisation exacerbates inequality within countries.
3-impact political globalisation
For - Political globalisation has fostered global cooperation on poverty reduction through institutions like the UN, IMF, and World Bank.
The UN’s Millennium Development Goals (MDGs), launched in 2000, successfully halved global poverty ahead of 2015, using the Economic and Social Council to promote collaboration. The current Sustainable Development Goals (SDGs) aim to eradicate extreme poverty by 2030, taking a more holistic approach that addresses inequality, climate change, and access to education and healthcare.
IGOs such as the IMF and World Bank also provide financial assistance and advice. For example, in the early 2000s, the IMF helped Cambodia modernise its financial sector, stabilising its banking system, managing inflation, and sustaining economic growth through technical assistance and capacity building.
Against:
However, political globalisation has often worsened poverty, particularly through Structural Adjustment Programmes (SAPs) imposed by the IMF and World Bank in the 1980s–1990s. SAPs required privatisation, deregulation, and cuts to public services as conditions for financial aid.
In line with dependency theory, this locked many Sub-Saharan African countries into exploitative global structures—dependent on exporting raw materials while importing expensive manufactured goods.
In Nigeria (SAP introduced 1986), poverty rose from 28% to 66%, with public services deteriorating and inflation rising.
In Zambia, SAP-led privatisation caused mass layoffs, driving poverty from 49% (1989) to over 80% by the mid-1990s.
Today, ~38% of Sub-Saharan Africans remain in extreme poverty, and 75% of the region’s exports are still unprocessed raw materials, leaving these economies highly vulnerable to global price fluctuations.
