The Truth about Globalization and Inequality

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According to P. Sainath;

“India is a classic example of engineered inequality. On 20 October, The New York Times had a front page lead celebrating the birth of a class of people in India who spend their weekends at malls. It failed to mention that this year, India slipped three places in the human development ranking of the United Nations. We now stand at rank 127. This year’s UN Human Development Report had found that for the bulk of the Indian population, living standards are lower than those of Botswana – or even the occupied territories of Palestine. So while some of the richest people in the world live in India, so do the largest number of the world’s poor.

The euphoria over one good monsoon (actually, we’ve had several these past 15 years) seems to have erased any debate in the media on what’s happening in Indian agriculture. Small farms are dying. Investment in agriculture is down. Rural credit has collapsed and debt has exploded. Many are losing their lands as a few celebrate at the malls. In March this year, as Professor Utsa Patnaik points out, the per person availability of foodgrain was lower than it had been during the notorious Bengal Famine of 1942-43.

Thousands of farmers have committed suicide since the late 1990s. In a single district of Andhra Pradesh, Anantapur, more than 2400 farmers have taken their own lives since 1997. Elsewhere in India, like in Gujarat or Mumbai, the loss of countless jobs in industry is boosting religious fundamentalism. In the 2002 violence in Gujarat in which over 1500 lives were lost, many of the rioters were workers from shut-down textile mills.
The huge new inequalities are feeding into existing ones: For instance, in a society where they are already disadvantaged, hunger hits women much harder. Millions of families are making do with less food. In the Indian family women eat last. After they have fed their husbands and children. With smaller amounts of food being left over now, poor Indian women are eating even less that they did earlier. The strain on their bodies and health becomes greater. Yet, health care is ever more expensive.”

According to Phillipe Legrain;

"Wade points out that absolute income gaps are widening and argues that this is a matter for concern. Really? Consider again his example of economy A, where the average income is $10,000, and economy B, where it is $1,000. Their relative income is 10:1 and the absolute gap between them is $9,000. Suppose B grows at a racy 10 per cent a year. Its income will rise by $100 to $1,100. If the absolute gap between A and B is not to widen, A can add at most $100 to its income of $10,000, which means growth cannot exceed 1 per cent. In short, because A starts off so much richer than B, even if B booms the absolute gap between them will initially widen unless A stagnates—and if A stagnates, B is unlikely to boom, since A’s demand for its exports will also stagnate. Perhaps Wade wants the gap between rich and poor to shrink through economic stagnation in rich countries—if so, he should say so explicitly. But surely what is happening now is preferable: rich countries are growing steadily, but poor countries are growing faster, and thus catching up in relative terms. If this continues, they will eventually narrow the absolute gap too. For example, if B grows at 10 per cent a year for 30 years, its income will rise to $17,449; while if A grows at 2 per cent a year over the same period, its income will rise to $18,114.”

What to Read: Inequality and Development in a Globalizing World- A Syllabus
Inequality Does Cause Underdevelopment
Globalisation, Inequality and Poverty Relationships: A Cross Country Evidence
The global redistribution of income
New Economist blog's posts on Inequality.
Everybody Loves a Good Drought: Stories from India’s Poorest Districts- Book Review

Why Inequality Matters in a Globalizing World- Nancy Birdsall
How Unequal Can America Get Before it Snaps- Robert Reich
Economic Growth, Inequality and Poverty: Findings from a New Dataset
Perspectives on Growth, Inequality and Poverty
Poverty, Inequality and Growth in the Era of Globalization
World Inequality in the Second Half of the 20th Century
Globalization, Growth, and Poverty: Building an Inclusive World Economy
Hans Rosling at TED
The Globalisation of InequalitySainath

1 Comment

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This page contains a single entry by Paul published on August 16, 2006 11:46 PM.

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