Monday, June 17, 2013

LIBERAL DEVELOPMENT STRATEGIES IN COMBATING GLOBAL INEQUALITY

1.0.0 Introduction One of the most important issues being deliberated upon in a majority of the international social, political and economic forums in the present day is the issue of global inequality. Kiely (2010) posits that the data and information that exist on global inequality are not only dramatic, but also well known in all the parts of the world. While on many national forums the emphasis is placed on poverty as being the main problem, in the international arena emphasis is placed on global inequality. In 1960-1991 the global income of the wealthiest people (20% of the world’s population) increased from 70% to 85% while that of the world’s poorest people declined reduced from 2.3% to 1.4%. This consequently increased the ration of shares owned by the rich and poor from 30:1 to 61:1. Currently an estimated one third of the world’s populace- an estimated 1.3 billion individuals- lives of incomes of 1 dollar or less per day (Milanovic, 2005). This clearly reveals that the global inequality is increasing to unprecedented levels and something needs to be done fast. The best way to respond to the current global inequality confronting the world is the global adoption of liberal development strategies that will effectively combat the international inequities (Castells, 1998). The most effective strategies, which will be discussed in depth in this paper, include free trade, democracy and non governmental organizations (private sector). The nations of India and Japan will be utilized as case studies in this paper. At the end of the paper a summative conclusion will be drafted followed by an alphabetical list of the references cited in this essay. 2.0.0 Case Studies Wade (2004, p. 569) reveals that in the last two decades the nations of China and Japan have witnessed and increased decline in the rates of poverty as well as a soaring of their financial systems. This has attracted a lot of interest due to the fact that other regions of the world for instance Russia and nations in sub-Saharan Africa have regressed while others such as Latin America remain stagnated. Neoliberals have accredited the improvements witnessed in the financial systems of the Republic of China and Japan to the increased economic integration in these nation’s borders. Milanovik (2005) argues that with the core of capital accumulation in the nation of China is the Chinese state. Pogge (2005) claims that the increased globalization that has been witnessed in the last few decades all over the world as well as the neoliberal economic theory ascertain that financial systems or economies that are more open tend to acquire greater rates of growth and prosperity than those that remain closed. As a matter of fact, increased rates of liberalization by economies are perceived as bringing about faster rates of progress than those that do not. Globalization has increasingly been depicted as having the capacity to decrease the divide that exists between rich and poor people. It is this same principle that describes the rationale that is utilized by organizations such as the International Monetary Fund and the World Trade Organization (Wade, 2004, p. 572). As indicated by Castells (1998) globalization bears with it a promise of equal access to markets, technology and capital for all those that are involved. As indicated in an evaluation of the Chinese and Japanese case studies, main cause of inequality and poverty that typifies the current global arena is declines in productivity. The poor of the world remain in paucity due to the fact that their labor and efforts are inadequate in producing the amount of income that they require to feed, house and gain an education. As will be indicated in the literature review part of this essay, there are a number of factors that are believed to cause low productivity. This absence of required capital, lack of access to updated technologies and skills and exploitation from the wealthy in society who collaborate with the political systems to ensure that any enhancements in the economic or social systems that are risky to their interests are blocked serve to increase the inequality in the global scene. The nations of Japan and China indicate the manner in which financial systems in Asian have gone against the usual stereotypes and attained economic development as well as financial growth. 3.0.0 Literature Review Free Trade One of the most important liberal development strategies ands requirements for neoliberal globalization is free trade. Free trade is one of the most efficient instruments to use in the war against global wealth inequalities. Free trade is described as “A movement whose goal is to help producers in developing countries to get a fair price for their products so as to reduce poverty, provide ethical treatment of workers and farmers, and promote environmentally sustainable practices”. Free trade can also be defined as the increased right of entry by corporations and host nations into emerging markets. There are a number of characteristics that typify free trade which are very significant in reducing the inequalities that exist in the global arena. Firstly, free trade leads to free access to markets and market information. This allows equality between the small, medium and large firms so that no firm can adversely adjust markets by utilizing monopolies or oligopolies that are enforced by governments. Free trade is also characterized by commercial activities and trade of good and commodities that is not restricted or limited by the imposition of unnecessary or excessive trade barriers and tolls. The also applies to the trade of services. Another very important feature of free trade that will go a long way in combating the global inequality currently being witnessed in the international arena is the fact that free trade is devoid of policies that distort trade for instance regulations, laws, subsidies and tolls that allow some factors of production or commercial organizations an edge or advantage of others. Free trade will play a big role in combating global inequality due to the fact that it allows individuals to specialize and derive as many benefits from the international productive competencies as possible. Free market economies are also very instrumental in combating global inequality since they tend to self regulates morally, socially and ethically. Free trade is perceived as having the capacity to bring to an end the financial costs that characterize protectionism. Fieldhouse (1999) asserts that protectionism is often time perceived as the opposite of free trade. Investigative studies that have been conducted by scholars on the concept of protectionism reveal that it costs the world hundreds of billions of dollars every year in terms of the revenue lost which would have been attained by free trade. This present day description of free trade is opposed to the ideology of protectionism which allows affluent nations to acquire and sustain protectionist measures. Protectionism serves to increase the strength of the industries in individual nations since they are able to impose tolls on imports and consequently increase their industrial capacities and outputs. In the United States of America as well as the European Union member states subsidies are very effective in enabling commercial organization to maintain low prices of commodities and consequently push smaller producers from less developed nations out of the market systems and impede development (Gray, 1998). Protectionism is also perceived as being very discriminatory in nature die to the fact that a nation that jealously protects its industries has a propensity towards favoring its own people of foreigners that may be involved in the practice of direct investment. Non Governmental Organizations (Private Sector) The private sector, comprised of non governmental organizations, have for many decades carried out their activities and associated based on the principles of advocacy which is channeled towards policies and performances that are perceived to be adverse to the to the interests of the communities involved or the global poor. As a matter of fact the private sector and a great number of non governmental organizations are engaged in activities aimed at pressuring the government to react and effectively deal with the issues of inequality and sustainability that confront their nations. By describing the restructuring of the IMF and World Bank Chussodovsky (1997) the private sector can play a very significant role in combating global inequality by ensuring that they transform the functions that are fulfilled by global businesses. They can do this by taking a greater interest in and coming up with solutions that will effectively respond to the problems faced in society for instance poverty and inequality. Non governmental organizations that are founded in developed economies tend to contribute a lot to the reduction of global inequality and poverty. This is achieved by means of direct fiscal changeovers of their programs to nations that are not only poorer but in greater need of the assistance and support that such organizations offer. Woods (1999) points out that the private sector and non-governmental organizations do a great deal in empowering people from marginalized communities and reducing the divide and inequalities that exist between the wealth and poor in society. The private sector needs to expand its roles in the modern globalized society from its private profit driven strategies to the public role of engaging with other relevant stakeholders to respond to the issue of global inequality. The success of distinctive commercial organizations is ultimately interrelated to the greater success and well being of the societies in which these businesses are established and operate. It is therefore important to create long term value by interlinking the financial, social and environmental aspects of the society which will in turn ensure that international or global inequality is effectively combated. With the advent of globalization an increased number of non governmental organizations are able to penetrate and establish institutes in different parts of the world, particularly those that are inclined towards democratic ideals as opposed to authoritarian rule. Globalization wields the potential to not only eliminate the short comings that establish and sustain poverty but also act as the engine which drives economies or nations in the world that are currently lagging behind to catch up with the rest of the world. Democracy Beitz (2001) claims that for a very long time now democracy has been described as one of the most important strategies through which global inequality and poverty can be combated. This perception is augmented by the fact that more often than not, the issue of democracy tends to be interrelated with the financial systems that are to be found in any nation. There are a number of ways in which democracy serves to bring about a decline of global inequality. Generally democracies tend to be characterized by constitutional hurdles which hinder the political and governmental powers from seizing private property. This in turn means that property rights of individuals are strengthened, levels of uncertainty are reduced and the rates of investment are increased. These are very significant environments that support entrepreneurship and lead to increased growth and prosperity of a nation’s financial systems. In nations that are governed by dictatorial leadership systems there are few or no constitutional protections on private property rights leading to low incomes as declines in rates of growth. By enhancing the concept of democracy in the nations of the world it will be very easy to combat global inequality that is usually depicted in economic wealth and levels of poverty in individual nations. Democratic nations have a propensity of being more stable and consistent even during times of political power changeovers. This is because, as indicated by Thomas and Evans (2011) the politicians or rivaling parties that are involved in power struggles tend to handle their issues in an orderly manner. Consequently, foreign investors are confident in establishing long term projects in such nations as opposed to those governed by autocratic political systems. Unless nations in the global arena incline towards democratic rule and governance it will be very difficult to combat the global inequality currently confronting the world. Undemocratic regimes are often time characterized by protests, civil wars and violence which lead to decreased foreign investment and an environment that is not conducive for both social and economic growth. 4.0.0 Conclusion One of the most important issues being deliberated upon in a majority of the international social, political and economic forums in the present day is the issue of global inequality. In recent days the debates on global wealth or economic inequality have increased in frequency and depth. As a matter of fact, global; inequality has risen to become one of the most important social issues in the modern day. This paper has deliberated upon the liberal strategies of democracy, free trade as well as the roles that are played by non governmental organizations in ensuring that the challenges of international inequality and poverty which comes as a consequence are responded to effectively. In order to attain the best results in the endeavor to reduce or completely eliminate the inequality that characterizes the globe or international arena, it is important for non governmental organizations, commercial institutes and the relevant governments to engage in a collaborative effort that will lead to the formation of generative series of associations between those involved towards the combat of global inequality. Such associations have to be based on the concepts of mutual respect which emanates from the joint effort of responding to a shared problem. 5.0.0 References Beitz, C., (2001), “Does Global Inequality Matter?”, Metaphilosophy, 32 Castells, M., (1998), “End of Millennium”, Oxford, Blackwell (Chapter two) Chussodovsky, M., (1997), “Globalization of Poverty: The Impacts of IMF and World Bank Reforms, London: Zed Fieldhouse, D. K., (1999), “ The West and the Third World”, Oxford: Blackwells Gray, J., (1998), “False Dawn: The Delusions of Global Capitalism”, London: Granta Kiely, R., (2010), “Inequality and Underdevelopment in World Politics”, in Beeson, M. and Bisley, N., Issues in Twenty- First Century World Politics, Palgrave MacMillan Milanovic, B., (2005), “World’s Apart: Measuring International and Global Inequality”, Princeton: Princeton University Press Pogge, T., (2005), “World Poverty and Human Rights”, Ethics and International Affairs 19(1), pp. 1-7 Thomas, C. and Evans, T., (2011), “Poverty, Development and Hunger”, in Baylis, J. et al “The Globalization of World Politics: An Introduction to International relations, Oxford and New York; Oxford University Press Wade, R. H., (2004), “Is Globalization Reducing Poverty and Inequality”, World development, pp. 569-589 Wade, R. H., (2003), “The Disturbing Rise in Poverty and Inequality: Is It All a Big Lie” in Held, D. and Koenig-Archibugi, M. “Taming globalization: frontiers of Governance”, Cambridge: Polity, pp. 18-46 Woods, N., (1999), “Order, Globalization and Inequality in World Politics” in Hurrell, A. and Woods, N., “Inequality, Globalization and World Politics”, Oxford UP, pp. 8-35