Globalization and Poverty


This article analyses the issue of globalization and the various way in which it has affected the lives of people in different ways. It gives an overview of the various types of globalization that exist in the world today. Cultural globalization refers to the changes that have taken place due to the influence of technology especially in the fields of education and research. Cultural Globalization has highly been influenced by advancement in technology that is connected to education, research, and the spread of information. There are several ways through which the whole world has been able to benefit from economic globalization. For example, there is freer exchange of goods and services across borders that have enabled countries to obtain those products that they don’t have and selling out those that they have in surplus. However, there is a different opinion that the article explores about globalization being seen as modern day imperialism but under a different. The article also explores the relationship that globalization has towards other aspects of life such as wealth and poverty. It also looks at the various and loser in globalization as well as the international institution that facilitate economic globalization.

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Globalization can be defined as the process through which the world starts to seem like one place due to the fact that various parts of the world are able to access the same type of things such as news and products and in the process begin to share similarities such as practice of cultures, lifestyles, and ways of doing business. Major aspects of the society that can be credited to be key contributions to globalization include things such as improved transport and communication systems with the main component of improved communication being the internet. Every other thing that the world perceives to have fueled globalization has been a result of the two above mentioned. These may include things such as sharing of cultures and interdependence on one another for economic purposes. A closer look into the broad statistics and case studies indicates that double standards of wealthy states and institutions, including stringency of the global economic system, have barred benefits of globalization from being realized by the poorest nations of the world.

Although the word globalization only makes people think of the current times, the truth is that the process of globalization began hundreds of years ago, some traces of it even being identified in the BC years. The reason that most people associate it with the past two centuries is because it is at this time that many aspects of it began to spread much faster. Globalization has been able to affect various parts of human life, ranging from the business world to the health sector, environment, human migration, and communication technology among others. Some of these effects are positive while some are negative.

Some of the benefits that the human existence has been able to utilize as a result of globalization include the ease of migration of people from one place to the other, which has also highly aided business expansions, the rise of the internet, which has not only brought positive changes in communication, but also helped in improving research also business due to the availability of foreign markets and better ways of transportation of goods and services.
Perils that have come from globalization include global warming, which is caused by tearing of the ozone layer by chemicals and dangerous gases that industrial systems release into the air. Water pollution is another disadvantage, having been enhanced not only by industries, but also by many other human activities. The increase in human activities to aid globalization has also led to exploitation of natural resources, hence making them difficult to come by.

Types of Globalization

There are three main types of globalization, which are economic globalization, cultural globalization, and political globalization. Political globalization refers to the coming together of various political systems. This has been caused by the fact that as the world continues to be global, more and more countries are beginning to take note of their dependence on one another. This ends up putting these political systems in a somewhat similar position, thus proving the need to come up with universal systems that govern how these smaller systems interact with one another. Some of the global systems that have been put in place to facilitate global cohesion include the World Trade Organization, the United Nations, and the European Union among others.

This has not all brought good results. Due to globalization, main governments in certain countries have begun to lose some of their hold on power due to the existence of even more powerful systems. For example, reduction in the strength of the United States of America has been credited for the rise of globalization. This however has been seen as a threat by some countries and, thus, in a bid to maintain their sovereignty and control over their own territories, some of them have begun to show hostility towards free movement of people in and out of their countries, trying to curb globalization and subsequently their connections with the big powers.

Cultural Globalization

This has highly been influenced by advancement in technology that is connected to education, research, and the spread of information. The internet has been especially instrumental in this sector. At present, almost all nations globally have access to the internet. This has been made even easier by the reality that prices of computers have decreased drastically since their commencement many years ago, thus making them accessible to more people regardless of their economic status. Apart from this, there are also several gadgets that keep entering the market, with which people are able to access the rest of the world. For instance, unexpectedly, the use of mobile phones has penetrated developing countries even more than the developed ones, thus meaning that the issue of communication is well taken care of.

Through the internet, many people have access to various forms of media in many parts of the world. This makes the spread of news much easier and faster. It has also facilitated the spread of certain behaviors, cultures, and mannerisms. For instance, modes of dressing that are seen as current among people in the UK are often viewed as the same in America and many other parts of the world. The reason for this is that they may have stemmed from one of these places, but through better and faster communication have been spread to other areas.

The migration of people to various part of the world has also been instrumental in the spread of culture. This is because sometimes when people move to new places, they like to take up the culture and ways of life of the new people and then teach them to others when they return home. At other times, they are able to intermarry with foreign people and hence come up with their won cultures, which both sides are able to live with comfortably.
Unfortunately, this aspect has brought with it several disadvantages as well. For instance, the internet is widely blamed for the moral decay that is rampant in the world today. Most people have no regard for their traditions and cultures, which they have readily left behind in the pursuit of what seems to them as more current ways.

Economic Globalization

Economic globalization can be defined as the process through which markets are expanded throughout the world. Due to the interdependence that has been created all over the world, economies of most countries depend on one another. This is because those who have more resources find benefit in investing in others, which are not as resourceful as them. Most developing countries depend on developed countries for resources, especially in terms of technology, medicine, and infrastructure. Developed countries, in turn, often depend on the developing world in terms of natural resources because these countries are developing at a slower rate and most natural resources have remained either untapped or underinvested in. The areas that are most affected by the rise in economic globalization include technology, markets, labor, finance, and institutions.

Labor has been greatly affected by the rise in population around the world. Presently, population growth rate has been projected at around 2 percent globally. By the year 2050, it is expected that the number of people in the world will have reached approximately 10 billion, taking into account that around 50 million people die every year. Due to this fact, there have been strains in resources, which has forced people to move from one place to the other according to their preferences and needs. When they move, the labor market is affected because there is a deficit in places they have come from and a surplus in places they go to.

Advantages of Economic Globalization

The first advantage of economic globalization is that it has aided availability of a wider variety of products. Due to the fact that many economies have become dependent on one another, markets have expanded and, thus, the demand for many products has gone higher, as well as the number of producers of these commodities. These producers have to compete with one another, thus forcing them to come up with high quality products so that they are better placed with their consumers who end up enjoying better products.

Another benefit of economic globalization is improvement of economic statuses of various countries. This is brought about by the fact that they are able to gain access to certain goods and services from other countries that have them and in exchange sell to them those that they have in abundance.

Economic globalization is disadvantageous because it has been a major factor for the increase in inequality of income. This is brought about by the fact that the many technological changes that are taking place in the world are calling for an increase in the demand for people who have the technical knowhow to understand these technologies and get the most out of them. This means that this group of people is able to acquire better paying jobs at the expense of those who are less skilled or who possess skills that are not beneficial to the technological world.

Economic globalization has also led to increased vulnerability of economies. This is as a result of the fact that countries are increasingly dependent on one another for one thing or the other. As stated earlier, those that are still developing depend on developed countries in terms of technological advancements and investment, while the latter are looking up to the former to solve some of their problems that have to do with availability or the lack of natural resources, such as food and minerals.

The Process of Globalization

The process of globalization is stated to have begun in the fifteenth century although there are other versions that claim this process began much earlier. This was experienced in Americas, Asia, and Australia and only made its way to Africa when colonialists began to settle there.

During these early stages, it was mainly about more developed countries taking advantage of the ones supposed to be underdeveloped. This was made first of all through division of various countries and their categorization into in various social classes. Those that were seen to be less advantageous were taken over by those that had an upper hand; they harvested their minerals, made use of their lands, and even took some of their residents to their countries to offer free labor in the form of slavery. Because of this, those countries that were already seen to be having an upper hand continued to reap more wealth, while poor and exploited countries became even poorer.

The next step in the process of globalization concerned mainly trade. This is the business that took place mostly among those countries that had already established themselves economically and thus were able to conduct trade amongst themselves. These were America, Japan, Russia, and most nations in Europe. This led to formation of governing bodies whose main intentions were to regulate this trade. Apart from this, they also began to compete for resources that were still available in developing countries by coming together, hence beginning colonization of less developed countries.

During colonization, nationals of more developed countries took over every aspect of life in the underdeveloped ones. Most citizens were driven out of their land, which was found to be quite fertile, and instead they began to live on smaller lands in dilapidated conditions and work for colonialists for no pay since they were slaves.
The next stage of globalization involves classification of people according to their capability to gain access to some goods that are highly ranked. This has continued to be the reason why there is no equality in economies of various countries due to the fact that some of them have been able to attain economic independence much earlier than others.

The form of globalization that many are able to identify today did not begin until around the twentieth century. This was also around this time that industrial revolution was starting. Therefore, this is the time when many machines were invented that would make work easier. Some of these technologies are still being used today, but their versions are much more advanced than the ones at that time.

In the current world, globalization has advanced much more than when it began and continues to happen at a much faster rate. Unfortunately, it is also at this age that people are experiencing adverse effects of globalization such as the increase in pollution of the environment, global warming, moral decay, crime, et cetera.
The History of Globalization

Globalization has begun to take place at a much larger significance following migration of people to various places for various reasons. For instance, people were taken from Africa to European and American countries to work as slaves. People from more developed nations also moved to African countries in order to exploit rich resources whose benefits Africans did not know about.

Some have argued that the process of globalization is basically imperialism, but with a different term. Imperialism is the process of a country using its resources and force in order to gain dominance over others. This is a term that was more rampant in the nineteenth and twentieth centuries when more civilized Western countries took over less developed nations and exploited their resources for their own benefit. However, another version that is closer to the process of globalization is known as progressive imperialism. This refers to the process when a more developed nation tries to use various means to spread its ways of life and cultures to less developed countries in a bid to make them more civilized. In the long run, less developed countries look up to them in several ways so as to keep up with this lifestyle and, in the end, a developed country is still able to dominate them.

While globalization seems to have opened markets for the sake of developing nations, it has in essence reduced their freedom and sovereignty. This is because of the existence of lending institutions such the International Monetary Fund and the World Bank. Once they have lent money to these developing countries, it means that they become indebted to them and thus are forced to contend with a certain method of doing things that will alleviate them from these debts. Unfortunately, it is developing countries that find themselves in the borrowing need the more established nations such as the United States have more control over lending provisions. Therefore, in a number of ways, developing countries still find themselves at the mercy of empires just as in the case of imperialism.


The table below shows the globalization index of countries according to their economic, social, and political indicators. Image is a courtesy of Global Sherpa.

Measurement of Globalization

GDP (Gross Domestic Product)

Gross Domestic Product is a term that is used to measure the country’s economy by its national income. Therefore, it is derived using the cost of all products that originate at a particular time, which is usually a complete year. This term is often measured in terms of money. During globalization, some of the most common things that take place include increase in trade, lowered tariffs, and more developed technology. When a country experiences all of these benefits, the economy is able to go higher, thus meaning that the country’s GDP will increase as well. Although normally in the course of globalization there are those who come first just like there are those who lose, the speculation is that the GDP of most nations increases as a rule.

Gini Coefficient

This is a measure that is used in the estimation of the level of income inequality in a particular country. As mentioned above, globalization favors a particular group of people, unfortunately, at the expense of others. This is especially so regarding the kind of skills that people in the job market have measured against what the market is actually looking for. Those who have the kind of skills that are more useful for globalization have a better chance of getting jobs with a better pay. This leaves others who have undesirable skills working with a salary, thus increasing the rate of income inequality in the particular country.

PPP Values

This refers to purchasing power parity. It refers to a situation when the exchange rate is regulated so that each country that is involved has the same purchasing power. This means that a certain product should have the same cost in both countries despite the fact that each country has its own currency that is of varied values. Globalization has led to the ease in spread of goods and services through countries. This means that most of the time currencies have to be regulated so as to establish the same product price in all countries since this will improve the purchase demand.

Relative vs. Absolute Poverty

Poverty in general refers to the inability of a person to acquire basic needs. Therefore, relative poverty refers to the inability of a person to acquire basic needs measured against availability of income and resources in a county. According to the World Bank, relative poverty refers to the number of people who are living below the poverty line in their specific country.

Absolute poverty, in turn, is poverty that is measured on a more universal basis. This is the inability of a person to access resources measured against availability of resources as well as income on a global scale. According to the World Bank, absolute poverty is estimated as the number of people who live on below a dollar a day. This therefore means a person can be above the poverty line in a native country, thus not in the bracket of relative poverty, but due to the fact that this person lives on below a dollar a day, he /she falls into the bracket of absolute poverty.
Winners and Losers in Globalization

The biggest winners of globalization are consumers. As explained earlier, increased production has led to an increase in competition despite the fact that the number of consumers has also grown. This therefore means that for producers to be able to beat their competition, they have to find factors that will make them stand out and hence be the choice number one for consumers. In order for this to be attained, they should either decrease prices of their products to make sure that they are lower than those of their competitors and are therefore more favorable or they have to raise quality of their products to satisfy demand in the market. Most of the time, they have to do both. In this eternal struggle, it is the consumer who is able to enjoy benefits since the consumer is now able to get quality products at a low price.

Another winner in the process of globalization is a skilled laborer. The reason for this is that as globalization continues to thrive, there is an increase in the demand for more and better technology. This translates to the need for people who are either advanced in the use of technology or are able to produce them. This group of people is sought after all over the world, hence leading to them having a higher income than any other professional whose field of study or expertise is not favorable for globalization. Another reason they are preferred laborers in the market is that due to their expertise, they are able to adapt quickly to technological changes as compared to other laborers. Most companies are often looking for any possible way how expenditure can be reduced in order to maximize profit. One of these ways is to hire skilled and trained individuals rather than use resources for training of new employees. This therefore also guarantees skilled laborers jobs even when their countries suffer from the lack of employment opportunities.

Skilled laborers are also on the good side because they have the ability to be self-employed. As the economy of most countries continues to deteriorate, the rate of employment is also coming down due to the fact that most industries and governments do not have enough money for sustenance of a large workforce. Therefore, those who are not able to be innovative enough to start their own ventures are often left behind, waiting until jobs are availed to them. Those who are skilled in areas that are more marketable in the current world such as economics, IT, etc. are often able to start their business and enter the global market.

This, therefore, translates to the biggest losers in globalization being those who have fewer skills or whose skills are not relevant to the move towards globalization. As explained, the market does not have much use for them as it does for those who are considered as highly skilled. Therefore, most unskilled workers are without employment and the rest who have jobs earn much less than those who are skilled even though they may have the same education levels.
Producers are also losers. This is because of the growing demand that is experienced on the market, which has sparked severe competition among them. Therefore, in order to continue having a hold on consumers, they realize that they have to spend more on the production process. They are then not able to get this money back because they also have to sell at prices that are low enough to attract many consumers.

Globalization Institutions

IMF (International Monetary Fund)

This refers to an institution that was formed after the Second World War. Member countries are able to contribute a certain amount of money, which then can be borrowed by those countries that are not able to meet certain expenses. In the globalization-imperialism debate, this is one of the institutions that are mentioned as instilling aspects of imperialism in the name of globalization. When poor countries borrow money, they effectively become indebted to the IMF member countries, which implies dominance of the latter over poorer countries.

World Bank

This is an institution that is run by the United Nations and serves the purpose of providing loans to countries that are not well-established financially. This money is geared towards creation of projects that will hopefully generate income not only to cater for repayment of the loan, but also to help in boosting the economy of the said country.

The Free Trade Debate

Free trade enables countries to have the ability to invest in the production of products, which is made possible using the resources they have. Then, these goods are sold in exchange for the ones that they do not have. Free trade therefore enables all producers to come up not only with quality goods, but also with goods in large quantities. Thus, global consumers are able to have access to all kinds of products that can meet their needs.

Capitalism, Imperialism, and Corporate-Led Globalization

Capitalism refers to dominance of a private entity over the country’s trade and industry rather than of the state itself. Imperialism, as explained earlier, is the use of force or other resources to gain advantage over weaker and poorer countries. In the discussion about corporate-led globalization, some will argue that the term globalization is a cover up for what is truly taking place, which is imperialism and capitalism. In the push to have goods and services move freely in the world, what is actually taking place is that many aspects of rich Western countries are finding their way into developing countries, thus granting power and dominance to the richer ones.


Generally, economic globalization has been a step in the right direction as far as some developmental issues are concerned. For instance, exchange of goods and services across borders has become much easier. This has reduced chances that some countries will suffer from the lack of certain products, while these products go to waste in other countries because of abundance. Concern has however been raised over the fact that economic globalization or globalization in general may be deemed imperialism under a different name. While there are certain aspects that prove this statement, care should be taken by developing countries so that they ensure that chances of being dominated by powerful countries is reduced. Overall, economic globalization has been beneficial for the humanity.

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