GLOBALIZATION AND INEQUALITY

By Agus Miswanto; Mavis Akinyi Olum; Ruth Moyo; Patience Namanya; Clara Kansiime

Introduction

The word ‘globalization’ is widely used to define today’s world order. It involves increasingly integrating the world into one capitalist political economy operating under a neo-liberal free market ideology . Globalization is a process of interaction and integration among people, companies, and governments of different nations driven by international trade and investment and aided by information technology. Kohl (2003) adds that it is homogenization of world culture and it involves the spread of Western ideology.

However, some scholars state that globalization exacerbates and forms new inequalities. Despite world-wide economic growth and declining poverty rates in the period between 1981 and 2002, the number of people living in extreme poverty in Sub-Saharan Africa nearly doubled from 164 million to 303 million . WHO (2008) comments that, inequality is shaped by deeper social structures and processes. The inequality is systematic, produced by social norms, policies, and practices that tolerate or actually promote unfair distribution of and access to power, wealth, and other necessary social resources.

This paper aims to highlight patterns in inequality that have arisen due to globalization over the past thirty years. It addresses this in the context of income, power, human rights and socio-cultural life.

Globalization and Income

Globalization is characterized by shifts from technological integrations to multilateral and national policy reforms. These are based on the shift from state-led import substitution to a market oriented export-led approach pushed by stabilization and structural adjustment programs. The effects of globalization question the role of institutions like IMF and World Bank in developing countries.

The debate on distributional effects of globalization is polarized between two positions. Some say that globalization will offset incomes and even the poorest will benefit from it . The 2007 IMF Report shows that income inequality has increased in all income groups in most regions. The other position is that though globalization contributes to increased incomes, the benefits are unequally distributed within the country . Financial globalization, Foreign Direct Investment (FDI) and technological progress are associated with increased income inequality; they increase financial premiums on higher skilled labor .

Due to Structural Adjustment policies by IMF and World Bank such as privatization of public and government owned assets such as hospitals, the global poor have not equally benefited equally as evidenced by decline in accessing health care services due to institutionalization of ‘user fees‘. There is an increase in maternal death and more health related problems especially in developing countries The HIPC (Heavily Indebted poor countries) initiative by IMF and World Bank, has led to increased costs on the poor. The continuous borrowing of structural adjustment loans has accelerated a low income status for the poor countries and has increased the gap between the rich and the poor counties. This has denied developing countries their development and welfare role and it has been manipulated and used to promote global marketing and strategies that benefit the advanced countries.

In addition, it is proposed that free trade models are not achievable and cannot provide the best results for poor countries . The West is known to subsidize their agriculture sectors and African countries loose comparative advantage. As such, trade liberalization causes substantial displacement of labor and hurts workers. Small enterprises and import competing sectors lack access to modern technology, training, infrastructure and sufficient finance to upgrade as observed in developing countries .

Globalization and inequality in socio-culture

The emergence of globalization resonates sameness in perspective and ideology and it disrupts the cultural heritage of the world . Moreover, the tendency of economic and ideological interests results in losers and winners in the cultural debate; dominant verses subjected groups occurs. The dominant groups have access to power and privilege and their culture becomes a reference and measure instrument for the others in an effort to encourage homogeneity, while that from the subjected group is associated and framed as being traditional, backward, and oppressive, but ‘exotic’. These dominant cultures want to appear invisible but instead are quite visible and deviant . Therefore, differential treatment of cultural policies and practices arises, as evidenced in: prohibition of religious practices, choice of languages used in administration and education, physical appearance and recognition of symbolic events and cultural practices .

Disparity of tradition in intellectual and property rights between western and the rest also increases inequality and conflict in the third world. Owners of patents right enable extraction of royalties and monopoly profits from users-irrespective of whether they are industrial users or consumers-of the patented product . Therefore, global patent rules force a transfer of royalty payments from poor to rich countries, implying monopoly of wealth and increasing inequality .

For developing countries, where intellectual property is commonly shared, emergence of patent rights evokes looting and plundering cultural property. For example, the Indonesian cultural heritage has been looted, claimed and patented by people from other countries and the tension between Indonesia and Malaysia has recently increased because the Malaysian government is claimed to have patented and claimed many original culture products from Indonesia .

Globalization and Human Rights

Globalization has had positive influence on human rights. These include: the formation of an international human rights regime, transnational professional bodies, international bodies and NGOs and global communication networks, like the internet, increasing accountability of states . Some of the positive impacts on gender include increased employment opportunities in non traditional sectors and international women's movements to improve their positions in all aspects of societal life. However, they still form the larger percentage of unskilled labour and unpaid labour and this limits their ability to successfully perform in the market economy.

However, there are new forms of human rights violations that cannot be ignored. Multinational companies have violated labor laws. Vulnerable members of society like women and immigrants are subjected to poor working conditions and extremely low wages . Women are largely affected as they strive to escape from poverty. They are involved in illegal sex trade and human trafficking. Today, with the notion of international free markets, states are lowering standards to encourage set-ups of multinational companies. In this way they violate the rights of their citizens . Other vulnerable groups are children, certain races and people belonging to some religious affiliations.

There is loss of autonomy of states, especially in the case of developing countries, and there exists a rising inability to meet needs that constitutes human rights for their citizens. This is propagated by the global neo-liberal institutions of the World Bank, WTO and the IMF which encourage structural adjustment policies and reduction of government spending . In this way, the global economic regime (global capitalism) is seen to hinder achievement of human rights goals in developing countries . Globalization has also highlighted power relations among states; as a result human rights has been used by some states to exercise power relations. For instance, the Invasion of Iraq, and the torture of prisoners in Guantanamo Bay .

Globalization and Power

Political inequality is the extent to which groups within a society differ in influence over government decisions. Political inequality interacts with other inequalities like gender, class and ethnicity.

Globalization transforms the processes, actors, capabilities and agenda of world politics, necessitating more effective international institutions of management.

Theorists of globalization state that the sites of power are becoming more dispersed, and power is leaking away from the state. Few countries are immune from having their borders breached and as a result, state sovereignty is threatened. Indeed the principles on which sovereignty is recognized and respected are changing and we are faced with an impossibly of reconciling the notion of sovereignty. Jawara and Kwa in their assessment at the WTO mention ways in which countries with power exert influence on developing countries through inducements, threats and exclusion. For instance, in the United Nations, the Security council consists of some countries and these can veto decision that has global impacts.

However, Weiss [2005:346] argues that rather than loss of state power there has been structural and political entwinement thereby reinforcing contemporary global networks and domestic structures of nation state. Phillips [2005:102] observes that mainstay of the globalization state debate, in both orthodox and critical perspectives is the contention that states are increasingly centralized, insulated and technocratic and accountable primary to global market forces than national societies.

Conclusions

Globalization remains a new order of marginalization and imperialism in neo-colonial language. Powerful corporate lobbying has encouraged the view that global rules are regulating governments rather than companies, furthering goals related to business volume rather than social development. There is a dire need to remove increased access to markets by dealing with the non tariff barriers like standards and specifications in the developed markets that are hindrance to producers from developed countries. For pro-poor globalization, global governance needs to ensure democracy, regulation and transparency in its operation. National policies should ensure that there is broad citizen participation within their states and that the people benefit from globalization.

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