The Impact of Globalization



Globalisation is directly responsible for creating an international economic crisis that has resulted in the suffering of billions. Around fifty years ago underdeveloped lands numbered 2.5 billion inhabitants, of whom 500 million suffer from under nourishment. 1.5 billion suffer from malnutrition. As a direct or indirect consequence, 8 million died of hunger annually. At that time the world president of the United Nation’s Farming and Agricultural Organisation (FAO) observed that: “Today two thirds of the inhabitants of the earth live in constant hunger; and about 1,500 million people live on the subsistence level, suffering constantly from the most horrible of social ills.” Today, however, while the global economic system is dominated by neo-liberal policies of liberalisation and deregulation, the numbers of underprivileged and impoverished have only increased dramatically, while the gap between rich and poor has only widened. This paper attempts to gather some of the most salient facts on the devastating consequences of globalisation, clarifying that the conventional opinion of the beneficial nature of the structure of the world economy is a myth. In fact, the global economy systematically produces conditions of social, economic and political devastation for the majority of the world’s population.

I. An Invisible Holocaust

The numbers of undernourished people in the world have been rising for at least twenty years. According to the Food and Agricultural Organisation (FAO), the hungry within the Third World countries outside the Eastern Bloc and China rose by approximately 15 million during the 1970s and by 37 million during the first few years of the 1980s.[1] In 1960, the income of the 20 per cent of the world’s population living in the richest countries was 30 times greater than that of the 20 per cent in the poorest countries. Now we learn that in 1995 it was 82 times greater. In over 70 countries, per capita income is lower today than it was 20 years ago.[2] Children have invariably faced the brunt of these consequences. For instance, the United Nation’s Children’s Fund (UNICEF) reported that:

“[A]pproximately 40 per cent of all the young children who die in the world each year, 45 per cent of the children who are malnourished, 35 per cent of those who are not in school, and over 50 per cent of those who live in absolute poverty are to be found in just three countries – India, Pakistan and Bangladesh.”[3]

A typical example of the dire levels of Third World destitution that have been exacerbated under the neo-liberal policies institutionalised under globalsation is Bangladesh, the country mentioned last in the UNICEF report cited above. Bangladesh has a population of 116 million. In 1988, the United States had an income per person approximately 28 times that of Bangladesh. Even the poorest 20 per cent of the United States population had an income per person 6 times higher than the Bangladeshi average. Bangladesh’s GDP per person corresponds with the average for all 43 ‘least developed’ countries. About 99 million people – approximately 86 per cent of the population – are estimated to live in poverty. From 1965 to 1988, food intake in calories fell from 91 per cent to 83 per cent, while rising during those years for all industrial countries from 124 per cent to 132 per cent. According to official estimates there are about 13 million malnourished children in Bangladesh, with 63 million people lacking access to health services and 108 million lacking access to sanitation. Bangladesh, however, is by no means the worse on the list: There are countries with even fewer resources than Bangladesh. In 1988, 16 countries were listed in the UN Development Program (UNDP) with fewer resources per person than Bangladesh.[4] 

We should consider a few other equally horrifying examples. In Brazil, 40 per cent of the population go hungry, and seven million children work as slaves or prostitutes. In Guatemala, 87 per cent of the population of nine million live below the poverty line, while a quarter of a million children have been orphaned due to political violence. In Mexico, 60 per cent of households cannot meet their most basic needs. In Venezuela, 33 per cent of the population are unable to meet basic nutritional requirements. 90 per cent of the population in El Salvador live in poverty. It is not as if these countries are intrinsically poor; they possess significant natural economic resources. Yet these resources are being plundered by Western investors, with catastrophic results. The global economic system has not in any significant way lessened these problems, but on the contrary has exacerbated them drastically. The conditions of Bangladesh, Brazil, Guatemala, and so on have worsened under neo-liberal programmes. For instance, the UNDP reports that the gap between rich and poor nations doubled between 1960 and 1989.

In 1992, the United Nations reported that: “Some 1.4 billion of the world’s 5.3 billion people live in poverty. Other estimates suggest that including those living ‘along the subsistence margin’ with only minimal necessities increases the number of poor to nearly two billion.”[5] Out of this huge number of critically impoverished people, about 1-2 billion were in developing countries, while about 200 million were in the industrial countries, including about 30 million in the United States and 100 million in the former USSR and Eastern Europe.[6] Years later these figures have reached unprecedented heights.

Today an estimated 20 per cent of the population in the ‘developed’ world consume 86 per cent of the world’s wealth. This means that 80 per cent of the world population have distributed amongst them a paltry 14 per cent of the world’s wealth.[7] To understand this kind of sheer over-consumption attributable to the ‘developed’ world which thereby contributes substantially to this state of affairs, one should consider the fact that a mere $13 billion would be enough to meet all the world’s sanitation and food requirements – this is hardly as much as what people in the United States and the European Union spend each year on perfume. Even while goods are more abundant than ever before, the number of people without work, shelter or enough to eat, continues to steadily increase. Of the 4 billion people who live in developing countries, now almost a third  – that is about 1.3 billion people – have no access to clean drinking water; this is more than a sixth of the population. A fifth of all children in the world receive an insufficient intake of calories and proteins. Around 2 billion people – a third of the human race – suffer from anaemia. Thirty million people die of hunger every year, half of whom, UNICEF estimates, are children. Over 840 million suffer from chronic malnutrition; this is also almost a sixth of the population. Three billion people – that is half the world population – are forced to survive on less than two dollars a day.[8] Of the 6 billion people in the world, only 500 million live in comfort – that is approximately one-twelfth of the world population. This leaves a massive 5.5 billion people living in need – over five-sixth of the population.[9]

This critical situation has been escalating for many years. In 1960, the countries with the wealthiest fifth of the world population had per capita incomes that were 30 times that of the poorest fifth. By 1990, this had doubled to 60 to one. Five years on (1995), the ratio was at 74 to one. Simultaneously, inequality has also escalated within countries. Russia now has the greatest inequality in the world, despite or more precisely as a direct consequences of becoming integrated into the world market. Income inequalities have similarly rocketed within other alleged beneficiaries of the free market, including China, Indonesia, Thailand, and other East and Southeast Asian countries. The industrialised countries, especially Sweden, Britain and the United States, are no exception to this global norm.[10] The respected French current affairs journal Le Monde diplomatique reported in December 1999:

“Whole industries have been wiped out in every region of the world. The result has been social suffering: mass unemployment, underemployment, precarious employment and exclusion. Fifty million unemployed in Europe, one billion unemployed and underemployed in the world as a whole. We have the over-exploitation of men, women – and even more scandalously – children, 300 million of them, in conditions of unprecedented brutality.”[11]

The last point – child labour – is of course especially appalling. Development specialist Susan George relates that half of these millions of child labourers working in “outrageous conditions” are under 14 years old. The ‘advantage’ for corporations is that they receive “three compliant and defenceless children for the price of one adult.” The results of such repression is to drive down wages and replace adults. For example, “In India, the numbers of working children and jobless adults are roughly the same. The practice [i.e. child labour] perpetuates poverty. Today’s working children, if they aren’t already dead, will be tomorrow’s unemployed grown-ups”, whose “own children” will “work in the same sordid conditions.” The practice is, moreover, deliberate. “Plenty of TNCs are ‘outsourcing’ contracts to companies using children.”[12] In all, there are over 250 million children forced into labour throughout the world, poverty being the immediate reason why families send them into labour. They inevitably miss out on education as a result and are consequently condemned to a life of poverty. With the World Trade Organization legislating for the ‘rights’ of corporations in the name of ‘free trade’, nations are unable to prohibit child labour without violating international trade rules enforced by Western institutions. The response of the Western powers to this state of affairs is instructive. The U.S. government for instance has resorted only to the insignificant public relations stunt of requesting companies to adopt a ‘voluntary’ code of conduct. As Terry Collingsworth of the International Labour Rights Fund comments, “asking companies that have benefited from the use of exploited child labor to suddenly become guardians of higher standards is either naive or cynical.”[13]

Such facts, as appalling as they are, do not take into account other factors of severe social injustice. Throughout the world, human repression is being intensified, resulting from the increasing denial by governments of the most fundamental human rights; increasing numbers of people are unable to develop even a small part of their human potential due to the social, political, and cultural conditions in which they live; millions of people have been killed in a ceaseless string of wars and conflicts throughout the world, constantly fuelling international tensions.[14] In summary, the majority of the world population is living in extremely dire straits, suffering from impoverishment, state repression and war, in various combinations.

II. Elite Indifference and Complicity