Poverty, Globalization and Sustainable Development

Poverty, Globalization and Sustainable Development Introduction Back in the year 2000, the United Nations created eight Millennium Development Goals with a deadline of 2015. The goals included things like reducing child mortality, promoting gender equality and combating major diseases, but the Girst on the list was to eradicate extreme poverty and hunger. Poverty means different things in different countries because there is a different standard of living around the world. In the US, a person is ofGicially living in poverty if they make less than 11.770 USD a year, which is around 32 USD a day. This is called the poverty line or poverty threshold, the minimum level of income deemed adequate in a particular country. However, this paper will focus on extreme poverty, which according to the UN is: “a condition characterized by severe deprivation of basic human needs, including food, safe drinking water, sanitation facilities, health, shelter, education and information.” 1 The UN deGines extreme or absolute poverty as living on less than 1.25 USD a day. The goal set by the UN was to reduce the number of people living in extreme poverty by half. Now the 2015 results are published and it reports that 836 million people still live in extreme poverty, down from 1.9 billion people in 1990. So this means we succeeded, or at least made a lot of progress. Furthermore, the World Bank predicts that by 2030 the number of people living in extreme poverty could drop to less than 400 million, based on the assumption that everything will keep improving as it has. These improvements in tackling global poverty means we are moving in the right direction. But since these numbers are about extreme poverty, most people who have been lifted out of this are still really poor. Being poor comes with serious problems, from disease to lack of water. Income inequality continuous to be enormous and 1 in 7 people still live without electricity. Globalization Extreme poverty has decreased because of a group of factors, such as better access to education, humanitarian aid and the policies of international organizations like the UN. However, the greatest contributor is globalization and the consequent growth in trade. Economies and cultures have become more interconnected and free trade has driven the growth of many developing economies. Goods and services move around the world more easily because of technological advances in transportation and communication. A good example of this is the transformative technological inGluence of the mobile phone in developing countries. Phones give people access to banking and payment systems, better Y http://www.un.org/sustainabledevelopment/poverty 1 access to education and information. In some places, mobile phones help families to get information and get the best price for the goods or services they are producing. Installing cellphone towers is also a lot cheaper than running thousands of kilometers of telephone lines. Economists call this ‘leapfrogging’, the idea that countries can skip straight to more efGicient and cost effective technologies that were not available in the past. International trade has also created new opportunities for people to sell their products and labor in a global marketplace. There are some signiGicant downsides to globalized trade. The statistician Hans Rosling made this point: the 1 to 2 billion poorest in the world who don’t have food for the day suffer from the worst disease: globalization deGiciency. “The way globalization is occurring could be much better, but the worst thing is not being part of it.” Globalization is the result of companies trying to outmaneuver their competitors. While you search for the cheapest place to buy shoes, companies search for the cheapest place to make those shoes. They Gind the cheapest sources of leather, dye, rubber, and of course labor. The end result is that labor‐intensive products like shoes are often produced in countries with the lowest wages and the weakest regulations. This process creates winners and losers. The winners include corporations and their stockholders who earn more proGit, but also consumers who get products at a cheaper price. Losers are high‐wage workers who used to make those shoes, their jobs moved overseas. It is debatable if the low‐wage foreign workers are winning or losing. A lot of workers are thrown into hazardous working conditions, but it is also true that many workers in developing countries are at least making more money. These jobs pay above average wages. Although the pay would be unacceptable in developed countries, they are often the best alternative. The multiplier effect means that more money in being spent on local businesses. One could, for example, argue that the Bangladeshi apparel industry consists of sweatshops, but without globalization it won’t exist at all. Opponents of globalization see outsourcing of jobs as exploitation and oppression, a form of economic colonialism that puts proGits before people. A few call for protectionist policies like higher tariffs and limitations on outsourcing, but others focus on the foreign workers themselves by demanding they receive higher wages and more protections. The root of many arguments against globalization is that companies do not have to follow the same rules they do in developed countries. Some developing countries have no minimum wage loss, they do not have regulations that provide safe working conditions or protect the environment. Although nearly every country banned child labor, those laws are not always enforced. Public awareness is growing along with pressure from the international community to take steps to protect workers. For example, the US produces an annual publication of goods likely to be produced by child labor or forced labor. If a company is buying products from that list, they are likely to get blasted by ofGicials and the media. So awareness is the Girst step to improvement, the second step comes from those that support globalization. The pro‐ globalization movement is arguing that as developing economies grow, there are more opportunities for workers, which leads to more competition for labor and higher wages. While globalization has helped many people to escape extreme poverty, it poses a great threat for sustainable development. Many experts think the planet cannot sustain the growing world population and economy. Increase in living standards makes people demand more consumer goods such as cars and smartphones, and also changes their way of living, for example in the form of increased meat consumption. So while globalization has helped millions of people to get out of poverty, the challenge of the future is to lift up the poor while at the same time keeping the planet livable. The best way to help those people in extreme poverty is to enable them to participate in the world economy. This applies to developing countries in the global marketplace, but also to individuals at the local level. Development Aid: Microcredit An example of a speciGic action the international community is taking to tackle global poverty is microcredit. The global north is spending a small percentage of its budget on development aid, and supplying microcredit is one of the forms that became more popular recently. Microcredits are loans of around 100 USD on average given to low‐income people in rural areas. This money is used to fund plans that could structurally raise their income, for example starting a small business. As said by Muhammad Yunus: “In my experience, poor people are the world’s greatest entrepreneurs. Everyday, they must innovate in order to survive. They remain poor because they do not have the opportunities to turn their creativity into sustainable income.” Microcredit has thus far been a success and has spread to developing countries throughout the world. Private lenders, governments, and non‐proGit organizations supply billions of dollars worth of loans to the world’s most disadvantaged. Though microcredit by itself is not going to solve the problem of extreme poverty, it supports the idea that enabling people to participate in the economy can improve their lives on their own terms. A lot of people who participate in the global economy are not doing it on their own terms. Many of the people who emerged from extreme poverty in the last 25 years have jobs, wages, and working conditions that would be unthinkable in the developed world. Although the West committed itself to transfer some of its wealth to developing countries, for example in the form of microcredit, this could be seen as naïve. Protectionism and trading blocks effectively prevented the developing countries to freely participate in the global economy. By setting up tariffs and subsidizing domestic industries, developed countries do not allow fair access to the goods and services produced in developing countries. Economic Development as a Threat for Sustainability We now know what poverty is, the global poverty levels, how its reduction relates to globalization, and one way how the international community tries to tackle it. Now rests the question how all of this affects sustainable development. In order to understand what economic development in the context of sustainability means, we Girst have to deGine it. Sustainable development can be deGined in many ways, but the most accepted and used deGinition is from the Brundtland Report, also known as Our Common Future.2 2 World Commission on Environment and Development (WCED). Our common future. Oxford: Oxford University Press, 1987 p. 43. “Sustainable development is development that means the needs of the present without compromising the ability of future generations to meet their own needs. It contains within it two key concepts: ‐ the concept of needs, in particular the essential needs of the world’s poor, to which overriding priority should be given; and ‐ the idea of limitations imposed by the state of technology and social organization on the environment’s ability to meet present and future needs.”3 The Girst part of this paper explained the concept of needs and how the international community, at least partly, is making progress in reducing global poverty levels and providing the world’s poor essential needs. Now it will lay out the great threat this poses for the ability of the planet to provide for these needs, the idea that limits should be imposed in order for future generations to be able to meet their own needs. The concept of sustainable development is rooted in systems thinking, which requires us to see the world as an interdependent and interrelated system. Only then we start to realize that decisions made in the past continue to affect practice today. The economic policy we endorse today will have an impact on poverty levels in the future. Sustainable development takes into account quality of life is a system, too. Escaping poverty and having a secured income is a good thing, but it becomes less meaningful when pollutants have made the air in your part of the world unclean. At the same time, living in an area with clean drinking water sources all around loses value when you don’t have the money to feed your family. These examples make clear that sustainable development is highly interconnected among the environment, the economy and social well‐being, and only works when both needs and limitations are taken into account. There is a strong link between climate change and sustainable development. The increase in global temperature, ocean acidiGication, sea level rise and climate change impacts on different eco‐systems will pose a great global challenge with long‐term implication for the future generations. Scientists and politicians alike have accepted that the current global warming is human caused and will impact the availability of basic human needs such as safe drinking water, food supply, and energy security. The major accelerating factor of global warming is the exponential growth in greenhouse emissions caused by human activities. This is directly correlated with the exponential growth in industrial output and use of fossil fuels. So while globalization made exponential economic growth possible, and thereby reducing global poverty levels, it also adversely affected the ability of all countries to achieve sustainable development. The relation between poverty and sustainable development becomes clear when you see that developing countries are particularly vulnerable to the adverse impacts of climate change: 3 https://www.iisd.org/sd “While climate change will know no boundaries, poor and developing countries, particularly the LDCs [give full name], will be among those most adversely affected and least able to cope with the anticipated shocks to their social, economic and natural systems.”4 2015 Paris Climate Conference Now its clear that poverty and sustainable development are highly dependent on the climate and environment, this paper will focus on another speciGic action the international community is taking to address the rising problem of climate change and global warming. In December of 2015, world leaders came together at the Paris Climate Conference, or COP21. Here, for the Girst time in history, a global climate agreement has been reached among all the world’s nations. Key elements in the agreement include: ‐ “To keep global temperatures "well below" 2.0C (3.6F) above pre‐industrial times and "endeavour to limit" them even more, to 1.5C ‐ To limit the amount of greenhouse gases emitted by human activity to the same levels that trees, soil and oceans can absorb naturally, beginning at some point between 2050 and 2100 ‐ To review each country's contribution to cutting emissions every Sive years so they scale up to the challenge ‐ For rich countries to help poorer nations by providing "climate Sinance" to adapt to climate change and switch to renewable energy.”5 Central to the agreement is the goal what scientists regard as dangerous and irreversible levels of climate change, generally judged to be reached around 2 degrees Celsius of warming above pre‐industrial times. Many countries even pledged for a tougher target of 1.5 degrees Celsius. This especially, is a huge victory for the most vulnerable countries. These include the low‐lying countries that face unsustainable sea levels rises and the least developed countries. Another important aspect of the agreement in our focus on poverty, is the commitment of rich countries to transfer money and knowledge to developing countries. Financial and technological help are needed to leapfrog fossil fuels and move directly to renewable energy. Currently the developing countries have been promised 100 billion USD a year by 2020. This amount is not enough to reach the goal of bringing down man‐made greenhouse emissions to net zero, but it is certainly a step in the right direction. Willem Jansink ‐ 21500193 4 https://sustainabledevelopment.un.org/topics/climatechange 5 Adoption of the Paris Agreement ‐ UNFCC (2015)