Globalization: Perpetual Poverty?

When faced with both the boons and curses associated with globalization, the inevitable process by which states become increasingly connected (both economic and otherwise), it may appear that globalization nets positive. Indeed, global economic indicators show increasing growth rates for globalizing countries. However, the distribution of this wealth is disproportionate, and wealthier states are taking advantage of globalization to retain their comparative advantages over developing states which typically do not have the resources to defend their rights in a globalized economy.

An IMF 2001 paper measures the per capita GDP growth across three categories of countries: rich countries, globalized countries, and non-globalized countries. While one may be led to believe that any country with the will to do so can join the ranks of the globalizers, it is not true. When comparing the maps for the KOF Index of Globalization, which measures economic, social, and political globalization, between 1990 and 2012, it is clear to see that despite the progress made by some countries, most of the poorest countries in the world, especially in Africa, still remain the least globalized after decades. Moreover, none of them have struck it rich due to societal issues like governmental corruption that cannot solved simply by globalization.

Desperate to make enough money to support essential government services such as public health and basic educational programs, many of the nations have no choice but to loosen their policies to stay afloat. For example, in Nigeria, the first commercial production of oil began in 1956. Oil in Nigeria comes from the 20000-square-kilometers Niger delta region, which supports one of the largest wetland ecosystems in the world. Oil pervades the Nigerian economy: ever since the 1970s, the oil industry has made up 80% of the government revenue and constitutes 95% of Nigeria’s exports.

Being hugely dependent on the oil industry, the Nigerian government fails to enforce laws and even provides assistance to oil companies through restraining protesters.

When Shell requested permission to set up a specialized force, Managing Director Phil Watts said, “We must emphasize that SPDC produces more than 50 per cent of Nigeria’s oil which has consequential major impact on the country’s economy.” With their overwhelming influence over the Nigerian economy, oil companies are able to blackmail the government into loosening restrictions.

According to the Nigerian Federal Ministry of the Environment’s Gas Flare Tracker, 313 million Mscf of gas is released every year and over US$1 billion in fines are issued. Most of the fines remain unpaid as the companies could simply move to other desperate countries if they were to crack down. This deregulation not only results in perpetual environmental damage, but also undermines the stability of the country due to popular dissatisfaction. However, the alternative to allowing the entrance of multinational oil corporations is poverty as the state receives a minimal amount of its income from the people. There is no legal recourse for the citizens; this shows how more successful states are able to leverage their wealth to negatively manipulate less prosperous countries.

Nigeria is only one among many states being exploited by multinational oil corporations; multinational oil corporations are similarly only one among many types of companies exploiting poor countries. “Universal Ownership,” a research report published by the United Nations Environmental Program in 2011, found that annual environmental costs were US$6.6 trillion, or 11% of the annual global GDP. US$2.15 trillion, or nearly one-third of the costs incurred, were caused by the world’s 3,000 largest companies. In a “business-as-usual” (also referred to as BAU) scenario, costs due to environmental damage may rise to 18% of the annual global GDP by year 2050.

Another example of multinational corporations’ infringements of the rights of those living in less economically developed countries is the unfair and inhumane treatment of workers in foreign-operated factories. According to a GlobalPost article exposing working conditions of factories in Cambodia owned by multinational corporations, workers are often denied basic rights such as bathroom breaks. And in Cambodia, child labor is no peculiarity: in an H&M sweatshop, a worker said that as many as one-third of the workers there were children. Children as young as twelve years old leave their educations in order to (illegally) work in these factories. Children are not the only ones to be abused: women are allegedly fired if they are found to be pregnant. Indeed, globalization has expanded the economic pie. However, to boost the economy, hard work must be done. And instead of being distributed across peoples, the “slave labor” in sweatshops bear the brunt of corporate greed. While American teenagers shop at their favorite clothing store, the futures of invisible children in another world are being destroyed.

Not only does globalization take a human toll, but tensions are also being exacerbated by the process of globalization. The “Islamic State” is the product of an excess of globalism. ISIS, through its manipulation of the media, has successfully enlisted jihadists from over seventy different countries. Through the convenience of air travel today, the “Islamic State” is able to deliver terrorism on demand to any country; even if their attacks do not succeed, they nonetheless make wealthy nations paranoid and force them to waste their resources on augmented defense and security checks.

Globalization in its ideal form is indeed an attractive proposition; unfortunately, when given the opportunity, there will always be those that will exploit it by all means: in this case, multinational corporations from wealthier countries. The implications of their exploitation, whether through environmental irresponsibility or abuses of labor, inspire international terrorists and provide them with a justification for their atrocities. Globalization enlarges the economic pie at the expense of the poorest cohorts of planet Earth. Until globalization is dramatically reimagined, the richest countries will retain their comparative advantages, and those who have not yet ascended the ladder of globalization will be retained at the lower rungs of the economic totem pole.

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