Globalisation Is Hurting People: Undp

Devoting a major section to globalisation and its impact the world over, the 1997 edition of the report confirms what several developing countries have been stating at international fora. Annual losses to developing countries from unequal access to trade, labour and finance have been estimated at $500 billion, 10 times what they receive in foreign aid.

Arguments that the benefits (of globalisation) will necessarily trickle down to the poorest countries seem far-fetched, the report says.

Although the ratio of trade to gross domestic product for the world has been rising over the past decade, it has been falling for 44 developing countries whose populations total more than 1 billion, the report says. The least developed countries, with 10 per cent of the worlds people, have only 0.3 per cent of world trade half their share two decades ago.

 

The report claims that globalisation has helped reduce poverty in some of the largest and strongest economies like India, but the developing world has seen a widening gap between winners and losers. The share of the poorest 20 per cent of the worlds population has shrunk from 2.3 per cent of world income in 1960 to 1.1 per cent and it is still falling.

In some cases, liberalisation has been accompanied by greater inequality (as in Argentina, Chile and Ecuador), while in other cases it has proved a bonanza. China, for example, is the largest recipient of foreign direct investment (FDI) in the developing world, and its exports have grown more than 10-fold over the past 15 years. In India, FDI flows have doubled every year since the 1991 reforms, it says. Some highlights of the report are:

More than half of all developing countries have been bypassed by FDI, two-thirds of which have gone only to eight developing countries,

The terms of trade for the least developed countries have declined a cumulative 50 per cent over the past 25 years,

Tariffs on imports to industrialis- ed countries from the least develo- ped countries are 30 per cent higher than the global average, and

Developing countries lose more than $60 billion a year from agricultural subsidies and barriers to textile exports in industrialised nations.

The report says the adverse impact has been due to bad policy, bad terms and bad rules. The playing fields of globalisation, more often than not, slope against the interests of the people and countries, it says, and suggests steps to minimise the damage of globalisation and maximise the opportunities.