Disclaimer: I am by no means a whiz when it comes to understanding finance or economics, but as a government and politics major with a few classes on developing countries in my repertoire, I would like to think that I have an understanding of the global disparities in wealth. As we press on into the twenty-first century with qualms about the risk of globalized economies and how the interconnectedness of supranational trade organizations present liabilities for state sovereignty, something we so rarely consider is the persistent (and growing) problem of the "plutocracy" as described by Friedman. This graph highlights the drastic inequality in poverty levels between developed and developing countries, and while they may show that poverty was on the decline as of 2008, the gross difference in degree to which the developed and developing states are plagued by poverty is cause for concern.
While the rich get richer in this globalized economy, is it only a playing field for the developed states of the world? I would argue that this is the case. In consideration of the fact that a large percentage of developing countries are former colonies of Western powers, I would chalk up some of this inability of developing countries to participate in the rich man's global economy as a result of these legacies of colonization. Dependence on western powers, lack of infrastructure, and political/social insecurity which plague developing states inhibit their ability to actively participate and flourish within the globalized economy.
Source: http://www.economist.com/blogs/graphicdetail/2012/02/daily-chart-20
This data on Sub-Saharan poverty incidentally shows how horrible AIDS was on the region in the eighties and nineties. Sub-Sahara Africa was the only region to see significant increases in poverty in the entire world, and the epidemic may also explain the relative lack of globalization in the region (in the form of foreign investment or outsourcing). The instability HIV/AIDS caused is still felt in current day sub-Sahara despite the disease being little more than a healthcare afterthought in the developed world.
ReplyDeleteNoah, I think that it is interesting to consider the influence of AIDS on poverty in this context. The fact that it is considered a "developing country disease" really goes to show the disparity between developed states healthcare versus that of developing countries, where the crippling effect of AIDS is still felt. I know that the use of generics has been helpful in combating this disease in the developing world, but do you think that once it is eradicated/the prevalence of HIV/AIDS is curbed, Sub-Saharan Africa will be able to stand on its own economically? I think that even when the disease is managed, there will be long-term hurdles before the state can be a global player.
DeleteYou hint at something that is the opposite of Inayatullah's argument. Inayatullah argues that a lack of access to global markets creates social and political instabiilty. You are saying that social and political instability makes it harder to gain access to global markets. Which is it? Is this some sort of Catch 22? And if so, can you think of any ways out that don't reproduce colonialism?
ReplyDeleteAlso, why do you think that inequality is a problem if the poverty rate is also dropping? What about inequality is a concern. If you gain one dollar and I gain five, we both gain right?
Professor Shirk, I definitely think that there is a semblance of a catch 22 here. States without access to the global market lack the resource flow to truly develop in the western model, while the states that have not yet tapped into the globalized economy are usually those that are still dealing with the repercussions of colonization. The way "out" of this situation is not clear cut, but the diversification of developing countries exports could encourage the global market to adopt more of their products, and maybe re-consideration of tariff levels to a more trade-friendly level could help developing states. How would you address this issue?
DeleteFinally, the inequality is concerning from the perspective that the balance of gains is largely skewed in favor of developed states. If the gains were more universal, developing states might have the resources to diversify economies and participate at a larger scale in the global market. Why do you think that it is important for there to be equality between developing and developed states?
Your point about the disparities found between these countries being connected with former countries that were colonized struck a cord with me. It reminds me of dependency theory which states that less developed countries and more developed countries rely on each other to exchange unfinished and finished goods.The problem is that lesser developed countries seem to be too reliant on selling their unfinished goods. I think that this disproportional relationship is one of the main reasons for this great divide.
ReplyDeleteGrace, I completely agree with you here. Do you think that the dependency theory is inherently tied to states which were previously colonized? From a historical perspective, the raw materials of colonies of developed states were usually exported to the developed state for production, with little repayment for the colony. Do you think that this is a pattern which has continued into our current, post-colonial global order?
DeleteThe disparities pointed out in this article remind me of the blog post I made last session. Dependence on western powers consistently plays a partial role in developing countries' abilities to thrive. I often view it as big brother controlling and keeping little brother somewhat content while the smaller brother continues trying to keep the older brother happy and close. As Grace mentions, it is a disproportionate relationship in which the western countries are reaping far more benefits than the developing countries.
ReplyDeleteAngella, your "brother" relationship that you suggest really makes sense in this context. Do you think that the "little brother" benefits as much from keeping "big brother" close as the developed state does from reaping the materials of developing countries?
DeleteI do understand and agree that currently the globalized economy does seem to benefit western powers. While studying in my other class especially dealing with food trade and economics, we have learned that the already powerful countries incentive smaller developing nations with subsidies. These subsidies are a concern because some argue that when given to developing countries it actually does not help their own country prosper only causes reliance. Also, globally specialization in food trade for subsidies does not help certain developing countries industrialize and those powerful countries who can pay seem to hold the most power in the World Trade Organization.
ReplyDeleteAfter taking GVPT289X, I really became skeptical of the discrepancies in the global food trade as well. Do you think that the developed states are also disrupting the natural trade cycles when governments subsidize the agricultural products of their own states? The competitive rates at which those products are sold domestically and internationally makes it difficult for developing countries to even profit off of the sale of their resources. How do you think that this ties into the recurring issue of imbalance in the global economy?
DeleteSarah, I agree with your point and it is very interesting to think that despite the separation from Western Powers, former colonies are still dependent on their old colonizers. Because of this I wonder if it will ever be a case where developing countries will ever be able to fully compete because as Sarah mentioned the rich states just continue to get richer making it difficult for developing states to ever catch up.
ReplyDelete