and India have benefited but reforms must be made to lift
those in poverty
Globalisation has been a double-edged sword. To those able
and willing to seize the opportunities and manage
globalisation on their own terms, it has provided the
basis of unprecedented growth.
China and India, with a total of 2.4 billion people,
have for more than a quarter of a century been growing at
unprecedented rates, with hundreds of millions of people
moving out of poverty. They have taken advantage of
globalisation of knowledge and globalisation of markets.
China and India had the education, the technology and
the resources to take advantage of the new technology, to
close the gap between them and the advanced industrial
But elsewhere, matters have not worked out so well.
There is growing disparity between the richest and the
poorest countries, as well as growing inequalities within
most countries around the world, and globalisation, as it
is managed, has played an important role in both of these
The number of people in poverty in Africa has doubled
in the past two decades and globalisation has contributed
to these problems. Africa was left by its colonial legacy
with neither the resources nor the education, for
instance, to take advantage of the new technologies that
make such a difference in India and China.
But making matters worse is the fact that the last
trade agreement, the Uruguay Round, signed in Marrakesh in
the spring of 1994, was so unfair that the poorest
countries of the world, including sub-Saharan Africa as a
region, were actually made poorer. The North insisted that
the South remove its trade barriers, open up its markets
to the goods produced in the North and eliminate its
subsidies, but the North did not fully reciprocate.
Of particular concern is agriculture. Seventy per cent
of the people in the developing world depend directly, or
indirectly, on agriculture. The massive subsidies in the
North serve to depress the incomes of those in the South
and increase the poverty. For example, the US subsidises
cotton to the tune of $3 billion (£1.5 billion) to $4
billion a year. Twenty-five thousand very rich cotton
farmers divide that money, most of it going to about 5,000
of these farmers. But the consequence is that the US,
which would not be exporting cotton at all, has become the
world’s largest exporter and, as it exports more, global
prices of cotton fall and ten million people in
sub-Saharan Africa suffer as a result.
But it’s not only the US; Europe also is to blame. The
average cow in Europe receives a subsidy of, by some
estimates, more than $2 a day — a number that has
considerable resonance because $2 a day is the World
Bank’s definition of poverty. About 40 per cent of those
in the developing world live on less than $2 a day. So, it
is better to be a cow in Europe than to be an average
person in the developing world.