Fears of a More Divided World

Probably the greatest concern about globalization is the way it has widened the gulf between the haves and the have-nots. While global wealth has undoubtedly increased, it has become concentrated in fewer hands and fewer countries. The net worth of the 200 richest people on earth now exceeds the combined income of 40 percent of the people who live on the planet​—some 2.4 billion people. And while wages continue to rise in wealthy countries, 80 impoverished countries have actually seen a decline in average income over the past ten years.

Another basic worry involves the environment. Economic globalization has been fueled by market forces that have much more interest in profits than in the protection of the planet. Agus Purnomo, head of the World Wide Fund for Nature in Indonesia, explains the dilemma: “We are in a constant race with development. . . . I’m worried that in a decade, we’ll all be environmentally aware, but there’ll be nothing left to defend.”

People also fret about their jobs. Both jobs and income have become more precarious, as global mergers and intense competition pressure companies into streamlining their operations. Hiring and firing workers according to the current needs of the market makes sense for a company concerned with increasing its profit, but it plays havoc with people’s lives.

The globalization of money markets has introduced another destabilizing factor. International investors may sink huge sums of money into developing countries but later withdraw their sums suddenly when the economic outlook worsens. Such massive withdrawals can plunge one country after another into economic crisis. The monetary crisis in East Asia during 1998 caused 13 million people to lose their jobs. In Indonesia, even those workers who kept their jobs saw their real wages cut in half.

The Widening Gap

The distribution of global wealth has never been fair, but economic globalization has widened the chasm between rich and poor. True, it appears that some developing countries have benefited from their integration into the global economy. Experts claim that during the past ten years, the number of people below the poverty line in India has gone down from 39 percent to 26 percent and that Asia as a whole has seen a similar improvement. One study shows that by 1998, only 15 percent of the East Asian population lived on $1 a day, compared with 27 percent ten years earlier. The global picture, however, is not so rosy.

In sub-Saharan Africa and some other less-developed regions, income has actually decreased in the past 30 years. “The international community . . . allows nearly 3 billion people​—almost half of all humanity—​to subsist on $2 or less a day in a world of unprecedented wealth,” points out Kofi Annan, UN secretary-general. One of the major causes of this huge social divide is financial self-interest. “The world over, private financial markets fail when it comes to the very poor,” explains Larry Summers, former U.S. treasury secretary. “Mainstream banks do not seek out poor communities​—because that’s not where the money is.”

The vast income divide between rich and poor segregates people and even countries from one another. Not long ago the fortune of the richest man in the United States surpassed the combined net worth of more than 100 million of his fellow Americans. Globalization has also favored the growth of rich multinational companies that have practically taken over the world market for certain products. In 1998, for example, just ten companies controlled 86 percent of the $262-billion telecommunications business. The economic clout of these multinationals often exceeds that of governments and, as Amnesty International points out, “human rights and labour rights are not a priority on their agenda.”

Human rights organizations are understandably worried about the concentration of the world’s wealth in the hands of a privileged few. Would you like to live in a neighborhood where the richest 20 percent earn 74 times more than the poorest? And thanks to television, the impoverished 20 percent of mankind know perfectly well how their rich counterparts live, although they see little chance of improving their own lot. Such gross unfairness in the global neighborhood clearly sows many seeds of unrest and frustration.