The Effect Of Globalization On Poverty

Published Date: 02 Nov 2017

Introduction

Poverty is a way of life for a vast majority of people in the world and a persistent feature of the Jamaican landscape. Its existence in a country’s population stifles the potential for economic growth and national development, as it reduces overall productivity, exerts pressure on Government resources, and often produces social instability. The purpose of this paper is to discuss the effect of globalization on poverty reduction in Jamaica. In my discussion, I will examine why poverty reduction is necessary in Jamaica and will compare Jamaica to Haiti in order to better understand the challenges faced by both countries and different solutions found. Two questions will guide my discussion: (1) what is the role of global education in reducing poverty? (2) Can global economic policies reduce poverty? I will attempt to infuse Robert Hanvey's theoretical framework to make a pedagogical connection.

What is poverty

Poverty according to the free dictionary is the state of human beings who are poor. That is, they have little or no material means of surviving, little or no food, shelter, clothes, healthcare, education and other physical means of living and improving their lives. Poverty reduction involves making less the number of people who are poor by improving their situation. The areas where people are most affected are: health, water, sanitation, education, food production and roads

What is globalization

Globalization "is a term that encompasses all cross-border interactions, whether economic, political or cultural "(Marber, 2013, p. 66). " Globalization also refers to global economic integration of many formerly national economies into one global economy, mainly by free trade and free capita, and also by easy or uncontrolled migration. Globalization has positive and negative impact and is changing the world whether or not humanity accepts it.

Theoretical Framework

Global education according to the Maastritch Education Declaration (2002) is education that opens people’s eyes and minds to the realities of the globalized world and awakens them to bring about a world of greater justice, equity and human rights for all. In addition, Robert Hanvey (1976) posited the five dimensions of global education, but for the purpose of this essay I will be focussing on only three dimensions; perspective consciousness, cross-cultural awareness and awareness of human choices. He stated that perspective consciousness is the recognition on the part of the individual that he or she has a view of the world that is not universally shared, that this view of the world has been and continues to be shaped by influences that often escape conscious detection, and that others have views of the world that are profoundly different from one’s own.

He further states that cross-cultural awareness is awareness of the diversity of ideas and practices to be found in human societies around the world, of how such ideas compare and including some limited recognition of how ideas and ways of one’s own society might be viewed from other vantage point. In life we can transcend many things however it is difficult but not impossible to transcend our culture.

Furthermore, the awareness of human choices refers to some awareness of the problems of choices confronting individual nations and the human species or consciousness and knowledge of the global system expands. For example, after emancipation, Barbados made the decision to invest heavily in education. Jamaica, on the other hand, did not invest as heavily as Barbados in that area. This choice made by Barbados resulted in a population, according to Barbados Education and Education Facilities that is 98% literate while in Jamaica the literacy rate is 79.9%. The return was even greater for Barbados as education helped to build their economy. It is important that human choices are deeply contemplated as the repercussion from bad choices can have devastating impact.

Who Am I?

I am from a family of twelve which includes my mother and father. When we were children we lived in an inner-city community that was poor, but progressive, as we were encouraged to advance academically. We knew nothing about globalization and how to get help, so we more or less settled and accepted our position in life. As I reflect on my childhood, I can recall that although we were poor, we never lacked food as both my parents were employed. It was not until my father died in 1977 in a motorcycle accident, that I understood what it meant to be hungry and what poverty was.

After high school my mother could not afford to send me to college as she had the younger children to put through school. Now faced with the problem of not continuing my education I had to seek work with the purpose to help finance and further my education. Unfortunately I got sidetracked from my goals and started a family. Then one day as I reflected on my life and realised that I have not followed through on my plans for the future, I was reminded of what my mother always said "education is the only way out of poverty".

I am reminded about human choices as posited by Hanvey (1976) that can determine how we face situations that we are confronted with. I made my choice to pursue education as a way to improve my life chances and my children’s. As a result, I am gainfully employed, not experiencing poverty, and still continuing my educational goal.

The Jamaican economy

According to Jamaica Economy (2013) Jamaica is service oriented and nearly 65% of its GDP is dependent on service. As a result, most of its foreign exchange comes from tourism, remittances, and bauxite/alumina. Through a strong Jamaican Diaspora remittances make up nearly 15% of GDP, with exports of bauxite and alumina accounting for about 10%. Tourism revenues account for roughly 10% of GDP, and both arrivals and revenues grew in 2010, up 4% and 6% respectively. Jamaica's economy faces many challenges to growth: high crime and corruption, large-scale unemployment and underemployment, and a debt-to-GDP ratio of more than 120%.

As a result of the government’s bail-out to the financial sector, Jamaica is facing a huge public debt burden which has placed the country in a precarious position. So, in 2010, the government created the Jamaica Debt Exchange in order to retire high-priced domestic bonds and significantly reduce annual debt servicing. In spite of the improvement the government’s ability to spend on infrastructure and social program is still hampered by its debt servicing cost, especially as the economy is shrinking while job losses are on the increase. The government is presently working to negotiate a new IMF stand-by agreement to gain access to additional funds.

Historical Perspective of poverty alleviation in Jamaica

The interventions to reduce poverty since 1991 have contributed significantly to the progress made in arresting the high incidence of poverty in Jamaica. In 1991, the poverty level was 45% of the population. The poverty level reached its lowest level of approximately 15% in 1998. Since 1998, the poverty level has fluctuated between 15% and 20%. The reduction in poverty between1990 - 2003 was due to several factors: control of inflation from 80% to 8%, stability in prices over an extended period, increased remittances, growth in the informal sector, a relatively stable exchange rate, and a growth of real wages.

For the past four years the global recession has been impacting Jamaica in a negative way and has led to inflation and significant price increases. Remittances have decreased and growth of the informal sector is declining. The exchange rate has undergone a significant devaluation. No increase is expected in public sector wages as wage restraint is what public sector and the Memorandum of Understanding is built on. As a result, the factors which accommodated poverty alleviation are no longer relevant. In this current economic crisis, sustainable growth in the economy is needed in order to alleviate poverty. If economic growth is not forthcoming according to Hughes (2006), the reduction in poverty levels cannot be maintained.

Comparing Poverty in Haiti with Jamaica

At the regional level, according to Greenwood and Hamber (1981) the Caribbean has had a long heritage of high inequality and poverty due to slavery and colonization. After many years of colonial rule the nations experienced no profits brought into their country as profits were shipped to the ruling country. As a result of the economic exploitation, the Caribbean was left with only unskilled workers. The European nations which were developing rapidly separated themselves economically and technologically from the Caribbean which became the most impoverished nations of the world.

This has impacted the Caribbean nations with little capital to invest towards their future economic growth becoming developing third world countries. Post-independence saw many Caribbean islands already struggling and unable to manage on their own. Haiti was the first such country to gain their independence in the Caribbean in 1804.

Jamaica and Haiti are close Caribbean neighbours. Although there are similarities between both countries, there is a huge difference between them as it relates to poverty. According to Hope for Haiti, Haiti is the poorest country located in the Western Hemisphere with a population of 8.5 million. Eighty percent (80%) of the population lives in poverty with eighty (80) out of every one thousand (1000) children dying before their first birthday. In addition, only 35% of the population is literate, while more than forty percent (40%) of students do not go to school. Less than 1% of Haitians have secondary education. It is not surprising then that unemployment is 70%, and life expectancy is 44 years. According to the Corruption Perception Index score system, Haiti is regarded as the 4th most corrupted country in the world.

Hope for Haiti has concluded that the main causes of poverty in Haiti are poor governance which is related to the instability of government, inequality, lack of education, and over population resulting from their Catholic belief of not using contraceptives. There are several concerns that have emerged as a result of poverty. They include crime and violence, bribery, gangs, drugs for gun trade, malnutrition, diseases such as AIDS/HIV, deficit of health personnel (1- 10,000) and low vaccination coverage.

Some suggested solutions for alleviating poverty in Haiti; (1) Education, as this breaks the cycle of poverty by helping persons to gain skills and knowledge in order to be employable. (2) Creating a stable democratic government as this will lead to stability and growth. (3) Foreign aid provided by countries coming together to form private organizations to improve education. Hope for Haiti, a Florida based charitable organization has been working to improve the quality of life for the Haitians through education, nutrition and health care. They have been working in partnership with the Haitians to connect, heal and empower communities on the path towards sustainability.

Jamaica has a population of 2,709,300 and is in the 86th position on the Corruption Perception Index Score system. The literacy rate according to Craig (2004) is 79.9%. Statistics from CIA WORLD Factbook (2011) indicated that from the period 2004 – 2009, 16.5% of the population has fallen consistently below the poverty line. A large number of Jamaicans are living in poverty, some worse than others despite the programmes implemented by the Government. However, poverty is more prevalent in rural areas and inner-city communities which accounts for the largest number of persons living in poverty. It comes as no surprise that the highest number of crimes is recorded in the inner-city communities.

There are several determinant factors of poverty in Jamaica: Low educational attainment, low income earning capability, gender discrimination, inequality in wealth, inability to access basic social services, lack of economic opportunities leading to underemployment, unemployment and low wage employment social and economical policies not monitored properly, poor rural development impacting the opportunities and livelihoods of rural households and high levels of risk due to natural hazards and poor environmental practices. The current global crisis of high inflation rate and dependence on imported goods, has also added to the dismal situation faced by Jamaica.

While both countries have been subject to a degree of political and economic instability, Haiti has a lengthy history of political oppression and economic chaos that continues today. Both countries have ongoing relationships with the United States, but Jamaica's relationship is much more stable. Today, Haiti's economic and political future seems uncertain, while Jamaica is a relatively stable nation.

Globalization is to be commended for Jamaica’s improved economic situation over the years. Jamaica has always tried to be involved in worldwide functions hence other nations would have interest and developers would try to gain a prospective of Jamaica’s situation and invest there. According to Robert Hanvey (1976) "One of the cherished ideas of our own times and of earlier times is that contact between societies leads to understanding" (p. 11). Jamaica has tried to gain awareness of other countries in order to adopt best practices and get involved in globalization, hence resulting in a more stable economy over the years than Haiti.

Poverty alleviation has to occur within a well defined framework with measureable indicators. The following criteria have been outlined by Hughes (2006) to reduce the level of poverty in Jamaica: targeting, coverage which includes population groups and geographic areas, efficiency, effectiveness, coordination, case management, community capacity and institution capacity. In addition, changes in government policies, job provision opportunities for the population, and free education up to tertiary level are measures that can be implemented to reduce poverty. It is said that "an impoverish nation is a poorly educated nation". If these critical issues outlined above are addressed, then it will be possible for the level of poverty to be reduced below10%.

The Global Economy

At the international level, since 2009 to present the world has been experiencing a global recession, which according to investopedia "is an extended period of international economic downturn. Generally, the IMF considers a global recession as a period where gross domestic product (GDP) is at 3% or less. In addition to that, the IMF looks at decline in real per-capita world GDP along with several global macroeconomic factors". The recession has resulted in a devaluation of trading dollars which resulted in an increase in the cost of foreign exchange, decline in productivity and profitability among businesses, unemployment, rising cost in food prices, decline in foreign investment, increase in taxes and instability of governments leading to civil unrest. These measures have resulted in a general fall in living standards.

Globalization and poverty reduction

The many benefits of globalization can and has helped in reducing poverty In Jamaica.

Through globalization Jamaica receives foreign investments, technical assistance, medical aid and equipment, food aids, aids for road construction, investment in education through building of schools, provision of materials such as computers, books and skills training, contribution through remittances and investments from Jamaica Diaspora. As a result Jamaica has experienced increase in life expectancy, and a rise in literacy levels resulting in a better educated populace. On the other hand, Pillai (2011) states that the negative effects of globalization are poor customer service, unethical business practices, imbalance trading, fear of terrorism, poor health resulting from fast food, spread of diseases and environmental degradation.

According to Kulkarni (2012) globalization increases competition which results in an improvement in the quality of products and services offered globally. With more competition monopolies are broken and prices become more competitive, making goods and services cheaper and more affordable for the poor. In addition, he argued that in developing countries there is often a lack of capital which prevents the building of more companies and hence employment. The opportunity for employment is created as companies foray into developing countries to invest in the emerging markets. In such cases, due to the nature of the businesses, people of developing countries too can obtain employment opportunities, which can improve the talent available in the developing country. This can have negative impacts on the developed countries as people have lost jobs on account of outsourcing to the developing world and hence, it becomes an issue for the people in the First World.

Furthermore, investment and capital flow is another way in which poverty can be reduced. He further stated that the spread of technology also helps in reducing poverty. As a result of globalization innovations that are created in other parts of the world also comes into developing countries. Without globalization no other country would have knowledge of new inventions, and medicines. This information would remain in the countries that invented them and no one else would benefit, For example, improvements in antibiotics have helped to prolong and improve the quality of life. In addition, the spread of technology also helps in food production, so developing nations are better able to feed their population. Technology can also be expanded to include economic and political knowledge, which will help to improve governance in developing nations.

Additionally, the world in which we live today is a result of many different cultures coming together. How we cook, our languages and customs have spread all due to globalization. The spread of some aspects of the culture can help in reducing poverty. In some countries reproductive practices encourage women to have many children. This can be counterproductive in developing countries especially when it is unaffordable. Learning about sustainability through family planning and contraceptive method can help to halt a spiralling population growth, as the larger the population the more consumption of resources and the poorer the country.

Furthermore, one of the most important benefits of globalization is the spread of education. Education is a powerful method for alleviating poverty. Today, through the use of technology the best educational facility in the world is at your fingertips. A person living in Jamaica can go to another continent physically or through online courses for a new experience which may not be available in his/her country.

Global Assistance for Jamaica

Through globalization there are many international institutions that have contributed significantly to reducing poverty in Jamaica. Institutions such as the Inter-American Development Bank and the World Bank have contributed highly to poverty reduction in Jamaica. Hughes (2006) pointed out that poverty is not a novel phenomenon in Jamaica as it is very much a part of our history. But as far back as 1886 national efforts were made to recognize the existence of poverty in Jamaica and address it. One such entity is the International Monetary Fund (IMF). Funding is done through countries contributing money to a pool through a quota system from which countries with payment imbalances can borrow funds temporarily.

Jamaica has received loans through this funding which has assisted with running the country, and prevented Jamaica from a further decline into poverty. Hughes further explained that in 1981, the International Monetary Fund (IMF) introduced the structural adjustment programme (SAP) to Jamaica. This injection of fiscal and monetary restraints meant that Government’s expenditure on social benefits had to be considerably reduced. This involved removal of both price controls and general subsidies. Although the IMF’s SAP engineered the immediate demise of such policies, the truth is that the measures while being socially-sensitive were not sustainable. The Jamaican Government, thus, had to engage in less costly and more targeted forms of social assistance.

Issa (2012) concurred that Jamaica’s economic situation has given the country an unfavourable rating among the international lending agencies. Fewer investments are made as the level of confidence in the country continues to dive. This slide, he further pointed out, must stop and urgently, and can only transpire through the credible involvement of the International Monetary Fund (IMF). However, to qualify, the Government must commit to implementing a set of IMF approved measures, tax and pension reform and a reduced public sector wage bill, which will support a medium term economic programme to steer the economy towards growth.

There has been much delay recently, because these measures are not easy to implement as it means job cuts and less spending on social programmes, which are unpopular among voters. Diaspora consistently report on feeling ostracized from involvement in issues of national importance: rising youth unemployment, inadequate health and educational facilities, and poverty. A system and structure which allow for consultation and influence on such issues, will enable meaningful involvement, including rising funds for critical social projects, such as community upliftment, programmes for unattached youth and poor relief.

The World Bank is another international financial institution that has been helping Jamaica to reduce poverty. The aim of the World Bank to Jamaica is to reduce poverty among its citizens. It provides loans to developing countries for capital programs. The collaboration between the World Bank (known more formally as the International Bank for Reconstruction and Development-IBRD) and Jamaica has been long and fruitful, involving entry into this island of officials who have acquired impressions of a unique nation at work and play. In addition, the World Bank exists to encourage poor countries to develop by providing them with technical assistance and funding. The World Bank has assisted Jamaica in building schools.

While the World Bank has downgraded its relationship with Jamaica since 1998 and the level of policy dialogue had changed, the challenge to start a new chapter in the relationship is one the bankers embraced with enthusiasm. In 2008, The World Bank team proceeded to implement budgeting support and to help the Government to put together a reform programme. The World Bank is Jamaica’s largest funder of education, and the fight against HIV/ AIDs and corruption worldwide. In essence the World Bank is a strong supporter of Jamaica debt relief.

Hutchinson (2013) posited that the Jamaica Social Investment Fund (JSIF) is a limited liability company established in 1996 as a component of the Government of Jamaica’s (GOJ’s) national poverty reduction strategy. He further explained that the Fund was designed primarily to channel resources to small-scaled community based projects. This is done with the use of an Operations Manual that acts as a guide to ensure transparency, accountability and efficiency in project implementation. The operations of the JSIF were initially funded by a loan negotiated between the GOJ and the World Bank. Though the Fund was initially established as a temporary organization with an initial lifespan of four (4) years, it has been in operation for over 10 years and presently has agreements that will continue until 2013.

The Millennium Development goals is an initiative proposed by the Leaders of over one hundred and eighty-nine countries (189) wherein development goals are set for the year 2015. The expectation is that there will be advances in education, gender equality, reduction in child mortality rates, and environmental sustainability. There are eight development goals on poverty reduction for 2015 that make up the Millennium goals.

World leaders have pledged to achieve the Millennium Development Goals, including the overarching goal of cutting poverty in half by 2015. UNDP's network links and coordinates global and national efforts to reach these Goals. Since its first Millennium Development Goals (MDGs) review, the Government of Jamaica has been striving to decrease the negative effects of the reduced social spending that had characterized much of the previous decade. Progress towards achieving the human development objectives expressed in the MDGs has been variable.

According to the review, the Country has achieved the MDG goal of universal primary education and is on track for ensuring environmental sustainability and eradicating extreme hunger. The Human Development Index (HDI) showed a slight increase to 0.727 in 2011, which gives the country a rank of 79 out of 187 countries with comparable data. The HDI of Latin America and the Caribbean as a region increased from 0.582 in 1980 to 0.731, placing Jamaica below the regional average.  In poverty reduction, in primary education enrollment and in eliminating gender disparities in education, achievements have been significant. However, progress in relation to improving maternal health and urban living conditions, as well as in reducing infant mortality has been unsatisfactory thus far. 

Historical perspective of poverty alleviation in the world

According to Sachs (as cited in Jackson, 2013) poverty has affected almost everyone that has ever lived. He asserted that the cause of poverty in many countries have been blamed on the poor themselves, race, culture, religious divisions, taboos, caste systems, lack of entrepreneurship, gender inequities, poor governance, corruption and geographic location. Furthermore, he posited that the Industrial Revolution beginning around 1750 was responsible for the break from poverty which occurred through scientific insights and technological innovations. He further stated that present statistics have revealed that after two centuries more than five billion of the world’s 6.5 billion people can reliably meet their basic living needs.

However, he confirmed that there is still one out of six persons on the planet who are still getting by on $1 a day or less. In addition, he reported that "everyday over 20,000 people die of dire poverty, for want of food, safe drinking water, medicine or other essential needs" (Sachs, 2013, p. 80). However, many of the factors stated above as contributing to poverty have been refuted as countries with some of these issues have achieved relative prosperity.

Sachs further explained that the world is in a better shape as a result of global economic prosperity, which has occurred as a result of scientific and technological advance, and not just market forces and free trade, placing the world within reach of eliminating poverty. In addition, significant economic progress has been achieved by China, India and other low-income parts of Asia over the past twenty-five years. Although progress has been made in Asian countries, corruption is on the increase. In a survey done by Transparency International, evidence has proven that fast-growing Asian countries are more corrupt than slower-growing African countries. Although economic growth has the ability to reduce poverty, many countries in poorer regions still lack financial means to make investments in infrastructure, education, health care and other necessary service.

Emerging issues/challenges and problems

There are many issues, challenges and problems that have emerged or occurred as a result of poverty: crime and violence, inadequate health care, poor living conditions, high unemployment rate, increase food cost and migration are just a few of the problems that many countries faced with poverty are experiencing. Solutions must be found in order for the country to function effectively and efficiently.

Analysis

Can global education reduce poverty? My answer to this is yes, because it seems that international assistance for poverty reduction is based on a consciousness of the different factors at work in causing poverty in different countries. For example, in Haiti and Jamaica different policies are needed to reduce poverty levels. The previous discussion also reveals the importance of cultural factors in causing poverty; so cross-cultural awareness is an important tool of global efforts in reducing poverty.

Can global economic policies reduce poverty? The global recession has had a negative impact on poverty all over the world. In the same way, having a different set of global economic policies can have the effect of reducing poverty. At the local level, Government policies can help to reduce poverty through appropriate policy and procedural reforms. However, sometimes corruption affects the implementation as funds received from donors or taxes are diverted elsewhere or projects run into "so called" over cost.

Policies can be used negatively when work to be done is overestimated and when completed has to be redone, which results in a waste of much needed funds. The government sometimes use funds to benefit their political party under the guise of government policies. I believe that if anyone is found guilty of using government funds to benefit themselves they should not only lose their position, they should be imprisoned. If this was done much of the funds that should be used to help the country would be used better.

Below are some policy recommendations the government can implement in order to assist with poverty reduction.

Mainstream poverty concerns in public policies.

Mainstream gender concerns in poverty policy.

Establish accountability framework for poverty reduction.

Ensure structured national policy and plan of action for poverty reduction.

Ensure adequate public services to serve the poor.

Promote macro-economic policies that protect real incomes of poor.

Formalize asset ownership among the poor.

Continue to establish and enforce maximum wage and promote policies that

support decent work.

Promote macro monitoring and evaluation of the services of public agencies to support overall national goals and joined-up government.

Recommendations to reduce poverty globally

1. Wealthiest population of the world contributes a small percentage of their wealth to help the world’s 1.1 billion who are experiencing poverty.

2. Stabilize the population which can help in easing the pressures placed on the earth’s resources which might reduce economic gains.

3. Practice good governance. Although governance can make a difference, it is not the only factor that determines economic growth.

4. Encourage overall economic growth.

5. Government should take salary cut, spend less on entertainment while the country is in an economic crisis.

6. Create international regulations for global activities.

Conclusion

As educators we should be cognisant of the changing environment in which we live. In a globalizing world issue and problems will reach across national borders. Hence it is imperative that collective international actions be undertaken. The more we learn the more we should examine ourselves to see if we are making any changes in our thought process. As I look around I am no longer confused as I can see that poverty can be self inflicted by the choices we make. I also realize that governments can keep people of a country in a state of poverty so they can become dependent on them. Consequently, I believe, it is not until we truly understand what it means to be our brother’s keeper, before we can truly reduce or eliminate poverty in the world.

Abdullahi (2010) stated that as global educators we must become highly conscious of the effect of globalization in shaping the contemporary world. He further warned that it is our ultimate goal as global educators to prepare students for responsible national and global citizenship in an increasingly interconnected and interdependent world; and we must ensure that we prepare students who can change his/her worldview from negative to positive. As humans we are faced daily with situations in which choices should be made. We must ensure that our choices are responsible and does not cause hurt to anyone.