O Intermitente<br> (So long, farewell, auf weidersehen, good-bye)

O Intermitente
(So long, farewell, auf weidersehen, good-bye)

quinta-feira, maio 06, 2004

There's a proven way to rid the world of poverty

May Day protesters against 'neo-liberal' or 'corporate globalisation' know controversial political theorist Chomsky is right: Globalisation has not only exacerbated inequality but also worsened world poverty. But this is one of those things 'people know that just ain't so'. They are wrong in both their conclusions and their analysis.


Fortunately, evidence that the world has achieved a big fall in the proportion of destitute people and a significant fall in absolute numbers of destitute is strong. Indeed, with the recent acceleration in rates of growth of large poor countries - above all, China, and, to a lesser extent, India - both global inequality and poverty have fallen.


Now turn to the period since 1980 - the age vilified for its rush into globalisation. Both global inequality and the proportion of the world's population and number of the world's people in extreme poverty have fallen.

Start with poverty. The latest World Development Indicators from the World Bank, out last month, suggest the numbers in extreme poverty - defined by the World Bank's poverty line of US$1 a day, at 1993 purchasing power parity - fell from 1.451 billion in 1981 to 1.219 billion in 1990 and 1.101 billion in 2001. As a proportion of the population of developing countries, the decline was from 39.5 per cent in 1981 to 27.9 per cent in 1990 and 21.3 per cent in 2001.

Mr Surjit Bhalla, an Indian economist formerly at the World Bank, has estimated the number on a roughly comparable basis at 1.581 billion in 1980, 1.208 billion in 1990 and 899 million in 2000. Mr Bhalla argues that, by 2000, the proportion of the developing country population in absolute poverty was just 18.2 per cent, down from 46.5 per cent in 1980 and 29 per cent in 1990. This is true even when he uses lower estimates for consumption levels given by household expenditure surveys, rather than national accounts. On the latter basis, he finds the incidence of extreme poverty was as low as 13.1 per cent of the developing world by 2000.


If you care about global poverty and, for that matter, about equality, your aim should be to raise the growth rates of poor countries. Eliminating poverty is now a challenge, rather than the unchangeable reality of human existence it used to be - because we know, in principle, how to solve it. 'It's the growth, stupid.'

Where then does that pantomime villain, globalisation, fit in? The answer is that successful countries have all exploited global market opportunities, predominantly international trade and, to a more variable extent, foreign direct investment, to accelerate their growth. China is now the world's premier example of this strategy. But it is following the example of other countries in its dynamic region.

Successful globalisation has, in short, reduced both poverty and inequality. Opening up to trade is far from a sufficient condition for rapid growth. However, in the right conditions, it has proved an enormous help. In the post-World War II era, it is impossible to think of a consistently successful economy that has not put international economic integration at the core of its development strategy.

posted by Miguel Noronha 3:22 da tarde

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"A society that does not recognize that each individual has values of his own which he is entitled to follow can have no respect for the dignity of the individual and cannot really know freedom."

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