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Monday, November 2, 2009

Equity Led Sustainable Growth and Globalization: A comparative analysis

Countries like Mozambique, Sudan, and Zimbabwe are being bled dry. They are so far in debt to organizations like the International Monetary Fund (IMF) and World Bank that they are forced to sell needed food in order to pay off debt. Globalization: Cause or Cure for Underdevelopment (Comparative politics of the world, Lynne Rienner, Boulder, 2003) examines the economic status quo of under developed nations, and various factors pertaining to the economic burden of international . There are many parallels between this “status quo” and the insights that D. Korten posts to avoid problems along the path of development in the article Equity-Led Sustainable Growth. Globalization is inevitable, to the detriment of 3rd world countries everywhere; debt is currently the vehicle for the meticulous exploitation of lesser developing countries (LDC) by multinational corporations.

Globalization: Cause or Cure for Underdevelopment begins with a resonant quotation from the 7th UN Secretary-General, Kofi Annan “The combination of extreme poverty and inequality between countries, and often also within them is an affront to our common humanity”. This inequality is sparked by neoliberalists’ blind pursuit for growth funded development colliding with structuralists’ insight that growth can occur without any development. The quantitative evidence of this imbalance is clear “the poorest 20 percent of the world’s population control about 1 percent of the worlds GNI [Gross National Income]” (page 111). Income is only one facet of the quality of life, for economic growth to most efficiently benefits the citizens; it must be “for the people by the people” this ensures that the implementations will be efficient in benefiting the citizens who need it most. The IMF and World Bank serve as a lender of last resort to countries in economic crisis, in a way that “makes it very difficult for LDC’s to protect infant industries and diversify their economies” (118). The IMF have created strange situations for countries like Nigeria who stricken with poverty took loans out on terms that they would export their most exploitable natural resource, oil (which accounts for 95% of exports). Total reliance on a single resource makes a country very vulnerable to global trade volatility. Hong Kong, Singapore, South Korea, and Taiwan are all examples of countries that have grown in a structure that supports self reliance along with global trade. In order to shape the countries industry for exporting, the governments of these countries actively reformed policy that ensured domestic firms could compete with foreigners. This article concludes that development should not be a profit-making enterprise for the rich at the expense of the poor.

Equity-Led Sustainable Growth: from Vision to Strategy starts on the basis of a people-centered development vision. Unfortunately few of the nongovernmental organizations (NGO’s) that implement global development are rarely engaged at the policy level, where a strategy to encourage sustainability and “broadly based integrated or uni-modal growth”. An important differentiation of integrated or uni-modal growth from dualism is that export performance is more of a result of economic success than its cause. The Asian Tigers – Singapore, Hong Kong, Taiwan, South Korea, and Japan are a group of countries that model this form of integrated growth. The government invests highly in adult literacy and education to achieve “broadly-based participation in the growth process”. Agriculture within the Asian Tigers is predominately based on citizen controlled co-operatives that articulate the needs of the members; all farms are built on resource allocated by the government. This ensures an increase of productivity, and labor-using, capital-saving technologies. This sustainable growth is best described as equity led rather than export led, they focus on providing for the internal market before the rest of the world. The benefit of taking an integrative approach to growth is the intensive management and application of these resources to optimize productive potential, and to increase the likelihood that the benefits of growth will be widely shared. This solid foundation is impermeable to the risk of export promotion to support debt repayment, a problem common with LDC’s that take on international assistance. The main goal of this approach at politics is creating an inclusive, class-consciousness among both the powerful and powerless.

Organizations like the International Monetary Fund (IMF) and World Bank, while providing international assistance, lure developing nations into a viscous cycle of exporting their most valued unrefined assets. The article Globalization: Cause or Cure for Underdevelopment examines the shortcomings of current international assistance and globalization. The shortcomings of our current system are examined and a strategy to avoid these pitfalls put forth in the article Equity-Led Sustainable Growth. Globalization is inevitable, and if we can change the way in which we do business, it can be a positive force for both developed and undeveloped nations. The key to our success in pursuing this goal is an integrated approach to growth and effective management of all nations’ human resources.