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1.3 Towards a fair globalization: Working Out of Poverty

Written by: International Labour Organization

Article Overview: In recent decades, governments and international institutions focused on opening international and domestic markets to increased competition. The powerful new force of information and communication technology (ICT) was released. Globalization, as it became known, was changing the policy landscape and distribution of power and gains.

1.3 Towards a fair globalization: Working Out of Poverty

In recent decades, governments and international institutions focused
on opening international and domestic markets to increased competition.
The powerful new force of information and communication technology
(ICT) was released. Globalization, as it became known, was changing the
policy landscape and distribution of power and gains.

While for some globalization has generated wealth and welfare, many
see it as a source of persistent inequality and social exclusion. Growing insecurity
and a sense that the rules of the game are unfair have given rise to frustrations
in the hearts of many individuals and their families. Questions of
legitimacy and sustainability have led to increasingly acrimonious exchanges,
most visible in the protests that regularly accompany major meetings
of international financial and trade institutions. And what are people
worried about? Jobs, to begin with.

Official unemployment, which continues to rise, masks the even larger
problem of underemployment and billions of people unable to work in ways
that fully utilize their creativity or maximize their productive potential. The
work of the poor is largely invisible. Far too much of women’s work is still
uncounted and undervalued. And the greatest failure of the current system
is for young people who see no future.

In addition, a large proportion of people living in extreme poverty live
in countries that are themselves economically and socially excluded. For
example, in 2002, the United Nations Conference on Trade and Development
(UNCTAD) estimated that 81 per cent of the population of the least
developed countries (LDCs) lived on less than US$2 a day and 50 per cent
on less than $1 a day.

Inequality within many countries and between the
richest and poorest worldwide has grown exponentially over the last few
decades.

Yet the dominant policy message has been: Grow first, distribute later.
Many countries gave this strategy the benefit of the doubt and followed the recipe. It has not really worked. Distribution has been slow in coming –
threatening social cohesion and making people lose faith in governments, institutions
and those with the power to change things. Today, for example, the
middle class in Latin America is shrinking and there are more poor and unemployed
people than at any time since the Great Depression of the 1930s.
Trust in authorities of all sorts has suffered. A recent regional survey
found that trust in democracy is flagging in Latin America – a region that spent the
1970s and 1980s struggling to wrest democracy from military regimes.

In 1960, the income gap between the wealthiest fifth of the world’s
population and the poorest fifth was 30 to 1. By 1999, it was 74 to 1. In 1995,
average per capita GDP in the richest 20 countries was 37 times the average
in the poorest 20 – a gap that has doubled in the past 40 years.

Would growth have been impaired or trade and investment diminished if wealth
creation had been more evenly distributed these last 40 years? If we had at
least maintained the ratio of 1960?

Certainly not. On the contrary, there would be fewer people living in
poverty, a stronger middle class in the world and more stable social and
political systems. There would be more consumers, greater demand and a
more dynamic global economy. Let us not repeat the mistake. We need
growth with equity – a globalization that leaves no one behind. That is the
whole meaning of the Decent Work Agenda.

Related Articles
  1.9 Building local development through cooperatives: Working Out of Poverty
  1.5 Skills development for sustainable livelihoods: Working Out of Poverty
  1.19 Building trust: Working Out of Poverty
  1.0 Overview: Working Out of Poverty
  5.15 Conclusions: Working Out of Poverty

Article Tags: benefit of the doubt, current system, domestic markets, extreme poverty, frustrations, globalization, information and communication technology, insecurity, international institutions, least developed countries, legitimacy, masks, persistent inequality, policy landscape, rules of the game, social exclusion, trade institutions, unctad, underemployment, united nations conference



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