Does Globalization Cause Inequity among Rich and Poor Nations?

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Critical analysis: Does Globalization Cause Inequity among Rich and Poor Nations?
Abstract
There has been a tremendous increase in the quantity of trade between different countries. This increase in trade activities involving different nations has led to allotment and redeployment of resources, goods and pricing with the intention of balancing the marketplace. Anti-globalists associate a number of factors related to globalization with the increase in inequality within countries and between nations. On the other hand, proponents of globalization argue that there has been a reduction in inequality. The paper critically looks at these points of view with regard to increase in trade activities, globalization and inequality. Issues such as international aid by rich nations, corruption, improved infrastructure, all associated with globalization, and are seen to be the causes of increased inequality.
Introduction
It has been shown in a number of literatures that globalization and international trade have existed for quite a long time. There has been a tremendous increase in the quantity of trade that has been crossing international borders. As a result of trade agreements between different nations, one’s resources become available to the citizens of another country. As a result, nations undergo inequality pains related to unemployment, lower living standards, and reduced prices for natural resources. Globalization has been referred to as the development of liberalization of worldwide investment and bisiness, and the ensuing enrichment of union of state economies. In view of the fact that the available resources in each country are scarce and limited, there exist four input factors of production that are catalysts for trade (Lucas 3). These are capital, labor, enterprise, and land. There has been a fierce discourse that has been going on between supporters and critics of globalization and its effects on inequality.
On the other hand, labor is a characteristic of the skill sets of the inhabitants of a nation. This is usually limited by the size of the nation’s population, and is divided into skilled and unskilled labor. Globalization has led to inequality in working hours of different nations. Some countries have 40-hour work weeks, while others have 35-hour work weeks (Lucas 3). If a nation has a large population, then the more it can produce and the more it consumes. Money that is invested in a business is known as capital. There is a variation in the wealth that has been accumulated from land and labor profits. As a result, profits from land, analogous to physical capital, and labor, as skilled workforce, could either be maximized or minimized, thus causing inequality. Globalization has led to inequality of wealth in both rich and poor countries since it has led to inconsistency in incomes, education, stable governments, infrastructure, corruption and standards of living between citizens and nations.
Globalization and Inequality
It is important to not only define inequality, but also to measure it with the intention of drawing comparisons between poor and rich families. After these causes have been determined, the results of globalization can be assessed and measured. This is a very crucial point given that it helps countries gauge their level of development and the effects that globalization has brought them. Lucas makes use of the World Bank’s definition of inequality, which notes that inequality, is an inconsistency in incomes and standards of living between citizens and nations (5). Comparisons between nations’ levels of inequality should involve a review of the income and living standards of the nation’s citizens. This is an important aspect in view of the fact that it helps the World Bank gauge a nation in terms of the minimum daily expenditure of its citizens. Lucas goes on to state that the income gap between rich nations and poor ones have become extensive (5). This view is shared by proponents of the anti-globalization movement who state that globalization has considerably amplified inequality between and within countries. In addition, it has led to marginalization of the poor in developing nations and has left behind poor nations. In addition, even though several efforts have been made with the intention of improving the income level of poor nations, there are still many people worldwide who live below the $1 per day target that the World Bank has set.
It has been discovered that rich nations have been at the forefront in the quest to deal with this issue of inequality with regard to the income and living conditions of citizens of poor countries. To solve this menace, rich nations have been seen doling out aid packages which are tailored to meet the specific needs of every poor nation. Some of these aid packages range from food hand outs to health programs and literacy programs. To sum up this issue, it is not enough for rich countries to only provide aid packages, poor nations also need better economic conditions that would enable them to sustain growth. These nations ought to learn how to contextualize the changes to be made to facilitate protection of the individual, as well as the people’s (Goldberg & Nina 71; Ngwainmbi 293). Accordingly, poor nations ought to invest in literacy programs and education with the intention of taking advantages of the pros of globalization.
Many years of stable governments and the capability of acquiring wealth have enabled rich countries to be wealthy. To be able to create a stable government, poor nations must be willing to establish an impartial and just structure that would uniformly distribute both economic and political power. Rich nations have been able to develop relationships with their trade partners outside their own borders through having governments that are seen as non-corrupt and eliminating barriers to trade (Coclanis & Tilak, 52). It is vital that such developed nations should offer lessons to poor nations regarding non-corrupt systems and elimination of trade barriers, in order to reduce the inequality gap. If this is not done, then this situation can be equated to a teacher telling a student to read when he has not taught him how to pronounce words.
Globalization has also favored wealthy nations. Rich nations have massively invested in infrastructure. For instance, wealthy nations have invested in superior transportation systems, proper healthcare, effective drainage systems, education for its offspring, timely immunization against childhood diseases, as well as correct disposal of sewage (Coclanis & Tilak, 59). Most of these factors, which encourage foreign investment, are seen to be lacking in poor nations. Investment in theses services is important since it enables the citizens to reap its maximum benefits. A person who is healthy and lives longer, significantly contributes to the production of goods for his country (Rudra 415). As a result, a nation’s increase in productivity means that there will be an increase in trade with other countries (Lucas 8). Such nations are not limited by the capacity of goods it produces domestically. It can only be limited by the extent of the trade it engages in with its international trade partners. As such, the pursuance of international trade enables nations to increase their rate of growth. International trade will only be beneficial to poor nations if they are willing to enact policies that favor growth of opportunities and if they are willing to open their society.
Corruption and poor governance are other issues affecting globalization and inequality. It has aggravated the disparities between poor and rich nations with regard to reallocation of resources via prioritization of economic growth, foreign aid, and increased globalization (Werlin 331). This is evidenced in a number of developing countries (Lucas 10). These corrupt leaders or institutions do not invest in infrastructure or social services that are required by the people. Their concern is to remain in power. According to neoliberal economic theory, and the evidence from the existing extended wave of globalization, open and liberalized economies become more prosperous and undergo more rapid progress. In my view, individuals who are resistant to additional economic liberalization do so out of “rent-seeking’’ or vested personal interests. In nations where changes have happened, there has been improvement of the economic situation of such countries (Lucas 12). Although donors provide aid in good faith, the corrupt leaders ensure that the aid does not reach the intended target. This frustrates people since they lack the political means to r...