Sunday, March 03, 2002

Are global poverty and inequality getting worse? March 2002 ROBERT WADE VS MARTIN WOLF [exchange of letters: author not explicit in excerpts below] "Pay inequality within countries was stable or declining from the early 1960s to 1982, then sharply increased from 1982 to the present. ... the main issue: the sheer magnitude of poverty and inequality on a world scale. The magnitude is unacceptable, regardless of the trend, and the world development agenda should make inequality reduction (not only poverty reduction) a high priority. Roughly 85 per cent of world income goes to 20 per cent of the world's population and 6 per cent to 60 per cent of the world's population. ... Integration/globalisation is nothing like the engine of development you say it is. The engine is the advance of technology and the diffusion of technical capacities of people, firms and governments." "Unless you are suggesting implausibly huge income transfers from taxpayers in rich countries to the world's poor, or complete freedom of migration, absolute gaps in living standards will rise for many decades, even if poor countries now grow very quickly. This is the tyranny of history: we can only start from where we are. ... But your position on the unacceptability of inequality also amounts to saying that the world would be a better place if the rich countries of today had never started rapid development in the 19th and 20th centuries. ... So bemoaning the magnitude of global inequality, as opposed to the low standards of living of large parts of the world, is just empty rhetoric. It has no significance for action." "A significantly more equal world is likely to be more stable, peaceful and possibly more prosperous. ... globalisation (or increased economic integration) as the world's best means of reducing poverty and inequality. I doubt it. The most powerful engine of development is the diffusion of technical capacities. ... the [World Bank's official view about development has been: adopt a liberal trade policy (low tariff and non-tariff barriers), deregulate markets, privatise state enterprises, welcome foreign firms, maintain fiscal balance and low inflation. ... The sensible [countries] liberalise in line with the growth of domestic capacities-they try to expose domestic producers to enough competition to make them more efficient, but not enough to kill them ... agricultural subsidies have been an important means of redistributing the fruits of industrialisation. ... China's agreement to give equal access to foreign companies will mean that it cannot protect 'inefficient' labour-intensive industries that serve to equalise incomes. It is worrying for the whole world that the Chinese government itself now seems to think it can maintain an urban-rural apartheid state by means of the pass laws, while opening the economy at a pace so fast that unemployment will shoot upwards from its already high levels." "The only sensible goal must be to raise the standards of living of the world's poorest people as quickly as we can. What is needed for this is faster growth. ... Among the essential pre-conditions for growth are: a stable state; security of the person and of property; widespread literacy and numeracy; basic health; adequate infrastructure; the ability to develop businesses without suffocation by red tape or corruption; broad acceptance of market forces; macro-economic stability, and a financial system capable of transferring savings to effective uses. ... The tragedy of Africa is that so few of these pre-conditions exist. ... trade is the handmaiden of growth. ... three propositions. First, the biggest policy challenge is to accelerate economic growth in poor countries. Second, open markets in the north and FDI make an important contribution to such growth. Third, self-sufficiency is a foolish development strategy." "I agree with your three propositions and have never argued anything different. ... At the heart of our disagreement, I think, is the question about how far rich countries in general should go in using the power our superior resources give us (a) to set the rules of the market so that resource power is translated into market power, and (b) to use that power to the maximum when bargaining with people much poorer than ourselves." "Economic growth is, almost inevitably, uneven. Some countries, regions and people do better than others. The result is growing inequality. To regret that is to regret the growth itself. It is to hold, in effect, that it is better for everyone in the world (or within individual counries) to remain equally poor. You come close to saying just that. It seems to me a morally indefensible and practically untenable position." ... [more] 2:10:34 PM    comment  []

View From Abroad Concern and Criticism Replaces Post- Sept. 11 Solidarity in Europe "'Americans ... are intolerant, they focus on themselves and they think only about themselves' ... 'They are part of the 'axis of evil' as well.' ... unease and anger with American policy and Americans in general have returned ... deep fears about what [Europe] sees as heavy-handed U.S. policy." "'If you read the French press today, you have the feeling that the threat is America.' ... Some commentators ... point to a deeper anti- Americanism that reaches well beyond the political commentators who have always criticized the United States. ... the just-concluded Winter Olympics reflected this growing global resentment. ... 'It was ultimately impossible to separate the [Salt Lake] Games from the fact of American hegemony in the world and the United States' go-it-alone approach in foreign policy'" " ... the anti-terrorism campaign took new turns ... growing unease with U.S. policy and shock at the American military's sheer might in the assault on Afghanistan. ... they fear that the clear superiority of the American military would make other nations irrelevant in U.S. policymakers' eyes. 'There's almost a sense of betrayal' [in] the European reaction." "'America is already envied and disliked because of its domination. The danger is that Mr Bush's speech, with its simple certainties and pronounced unilateralist flavour, will merely fuel that resentment further.' ... 'The greatest danger to America's dominant position today is not Islamic fundamentalism. It is the arrogance of American power.'" " ... 'the reality is that there are long-standing strains within the [American- European] alliance' ... the European outcry is unlikely to lead to a major rift between the continent and the United States. 'Underlying things hold us together ... Western values, shared interests in the Western economic system, liberal constitutional governments.'" ... [more] 1:05:22 PM    comment  []