The Benefits of Globalization

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The Benefits of Globalization

By: Pete Geddes
Posted on January 07, 2004 FREE Insights Topics:

Globalization has rapidly improved the social and economic status of women in the developing world. The explanation is straightforward: In a competitive, globalized world, the role of women becomes ever more valuable. Cultures that exclude women from full participation (e.g., Saudi Arabia) fall ever further behind.

Societies that embrace education for women enjoy dramatic social progress. Educated women tend to have fewer children. When they enter the workforce their contributions dramatically improve their countries’ economic prospects. Concurrently, economic independence increases their stature both at home and in the community. Importantly, women spend their income very differently than men, focusing on key areas for social progress: the education, health, and nutrition of their families.

Speaking at the 2000 World Economic Forum, President Bill Clinton said, “We have to reaffirm unambiguously that open markets are the best engine we know of to lift living standards and build shared prosperity.”

President Clinton understood that only those countries that have opened their economies to trade, to capital movements, and to competition have realized significant gains in per capita income and thus enjoyed social and economic progress. Here are some of the other benefits.

- Over the past 20 years, 200 million people have left absolute poverty -- defined as living on the equivalent of less than $1 a day.

- Advances in medicine, improved public health policies, and greater food supplies have lowered infant mortality and lengthened life expectancy. In developing countries in the 1950s, 178 children per every 1000 live births died before reaching their first birthday. By the late 1990s, the infant mortality rate in these countries had declined to 64 per 1000. Life expectancy increased from 44 years in 1960 to 59 years in 1999.

- Child labor declines as a country’s income increases. As trade promotes economic growth, globalization results in less child labor over time. In 1960, children made up 32 percent of the labor force in low-income countries. Forty years later, following the massive expansion in international trade, child labor in the same countries had declined to 19 percent.

- Though inequality remained more or less constant, or possibly increased, during the 1970s, it declined substantially in the 1980s and 1990s. As a result, the shape of the income distribution curve has changed, from a bimodal distribution with a peak of poor people and a peak of rich in 1970, to a smoother distribution in 1998, suggesting the emergence of a “world middle class.”

Increased wealth is, of course, a key predictor of environmental quality. The environmental sustainability index (ESI), produced by Columbia and Yale Universities, allows cross-national comparisons of rates of nonrenewable resource use and other environmental policies in countries worldwide. The index scores range from 0 to 100, with 100 being optimal sustainability.

- Countries such as Finland, Sweden, and Switzerland, with high ESI scores (73.9, 72.6, and 66.5, respectively), also rank among the countries with the highest annual per-capita income ($25,130, $27,140, and $38,140). The U.S. has an ESI of 53.2. (Our low score is due to the index’s heavy weighting of greenhouse gas emissions.)

- Countries ranking in the middle range of ESI scores (around 50), such as Algeria, Russia, and Egypt, are poorer (per-capita incomes of $1,580, $1,690, and $1,490, respectively).

- At the lower end of the scale are impoverished countries such as Haiti, Ukraine, and Turkmenistan (per capita incomes of $510, $690, and $750, respectively).

The integration of rich and poor nations is not a zero-sum game where the gains of one come at the expense of the other. Driven by the rapid democratization of information, technology, and finance, globalization is turning out to be a remarkably progressive, liberating force. Opponents of globalization may be well intentioned, but they are ill informed.

Globalization helps break the regressive taboos responsible for discriminating against people on the basis of gender, race, or religious beliefs. It is an antidote to the intolerant fundamentalism that oppresses millions of the world’s poorest.

When these people see how their counterparts in the West are treated, they see a better future and begin to demand it. Globalization offers hope for the world’s poorest, hope that one day they may enjoy the fruits of the West’s liberal traditions.