The Plight of the Poor under Globalization

by Robert Waldrop, originally distributed through the World Bank e-conference, May 2000, "Globalization, Development, and Poverty"

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1. The already thin margins of the poor everywhere are being stretched to the breaking point. A study of the Development Group for Alternative Policies of 43 countries with IMF structural adjustment programs, 1978-95, found that unemployment had increased. A second study of 19 countries found that in 17 of them, the real minimum wage was lower today than in 1980.

The International Institute for Sustainable Development finds that common strategies of the poor in meeting the challenges of globalization have been "to appropriate common property resources, intensify agriculture on marginal lands, increase heads of livestock and shorten fallow periods; migrate seasonally or permanently to cities, towns, agricultural plantations and to more vulnerable and marginal lands."

2. These strategies generally do not offer long term benefits for the poor (or for sustainable development). They are evidence of increasing desperation. Other troubling indicators include: (1) the increasing number of wars in and among the poor countries; (2) religious fanaticism and fundamentalism (e.g. the recent cult

murders in Uganda); (3) spontaneous outbreaks of violence against unjust economic structures (such as the seizure of white-owned farms in Zimbabwe, terrorism against oil company properties in Nigeria, threats to expropriate corporate properties); (4) widespread drug abuse, narco-terrorism and delegitimization of governments (such as Columbia); (5) the millions of displaced persons and refugees now residing in barrios, shanty-towns, and other informal settlements on the margins of urban areas; (6) the growth of outright slavery (in the Sudan, and in the global sex trade), and increasing problems with de facto slavery via bonded labor.

When I think of the effects of globalization on the poor in this new millennium, I am reminded of the connection often made in European history between the vicious Treaty of Versailles (which had the effect of impoverishing Germany) and the rise of Nazism. Making the poor of this world even more miserable and desperate is not a safe road to peace and prosperity.

3. The "West" is offering only marginal relief for debts, and what relief has been offered is slow and loaded with so many conditions that its contributions to bettering the situation is debatable. The maximum debt relief amounts represent only about $33 per person with an income of less than $2/day (the total debt load is more than $350 per capita). A spokesman at the Vatican announced on April 30th that the progress so far is disappointing: "The initial plan called for a reduction of $100 billion dollars, but in fact only $11 billion has been forgiven. 24 countries were supposed to benefit but up to now, only 5 have benefitted from a reduction. If all goes well, there will be 19 by the end of 2000. Moreover, the debt reduction, which was supposed be 80%, in fact is only 35-40%. . . The U.S. Congress has blocked the funds, and the European Union is not prepared to pay until it first sees the US commitment. " Statement of Msgr. Diarmuid Martin, Pontifical Council for Justice and Peace, reported in Zenit News of April 30, 2000. .

4. Structural adjustment policies have required poor countries to enact legislation favoring foreign investment, which has often included lowering the statutory minimum wage, privatizing industries, repealing workplace regulation laws, and favoring production for export over production for local needs. Thus, farm land which could be creating wealth for local distribution and to build local capacities by growing food for local consumption raises cash crops for the international market. The wealth thus created finds its way back to the international economic system via loan payments and transnational corporations. See It's not an exaggeration to say that there are people in poor countries who go hungry so that their food can be exported. Just last year, the international trade system was used to stop European countries from favoring Caribbean bananas (most of which are grown by small independent producers) over bananas produced by transnational corporation plantations in Central America.

5. World Bank projects have forced the displacement of millions of poor people worldwide. All too often, they end up in worse circumstances. "Declines in post relocation incomes are sometimes significant, in certain cases reaching as much as 40 percent for people who were poor even before their displacement." (World Bank Environmental Department, 1994) The World Bank is currently funding the resettlement of poor Chinese subsistence farmers in parts of Tibet. Questions are being raised by the Banks own Inspection Panel about how this loan is being handled. Tibetan exile groups have criticized the program as "cultural genocide." (May 5, 2000, Reuters News Service, "Watchdog slams loan")

6. Structural adjustment and World Bank projects have harmed the already fragile environment of poor countries by encouraging deforestation (which has contributed to flooding in poor countries), exporting pollution, and lowering local environmental standards. "Although the [1991 Bank Forest] policy had dual objectives of conservation of tropical moist forests and tree planting to meet the basic needs of the poor, Bank influence on containing rates of deforestation of tropical moist forests has been negligible in the 20 countries with the most threatened tropical moist forests." (World Bank Operations Evaluation Department, November 1999, quoted in Focus on Corporation column of April 7, 2000).

7. The impact of globalization on health care for the poor has been severe. In parts of Africa, 25% of the adult population is infected with the HIV virus, but because of drug patents held by first world corporations, few of these people are receiving adequate treatment. Lack of resources for health care (in part due to interest payments as well as structural adjustment) is also aggravating the epidemic of tuberculosis in poor countries. According to the WHO, between 2 and 3 million people die each year of tuberculosis, most of the victims are from poor countries. Incomplete and inadequate treatment regimens are contributing to the spread of drug resistant strains of TB. (Environmental News Network, April 30, 2000, "Tuberculosis on the Rampage").

The world's poor are hard workers and creative in meeting the challenges of their lives. But as fast as they can create wealth, it is transferred via politicized marketplaces (in which they have no voice) into the pockets of transnational corporations and the international finance system. This isn't an accident of history, it's the way a system that politically exalts Capital over Labor and imposes "development" from the "top down" is designed to work. Nobel economist Amartya Sen says, "The battle against the unfreedom of bound labor is important in many third world countries today for some of the same reasons the American Civil War was momentous." (Development as Freedom) As long as we are stealing interest payments from the rice bowls of the poorest of the poor, the situation will continue to deteriorate. It's time to declare peace in the "war on the poor" before its too late.

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