September 11: The Globalization of Poverty

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SEPTEMBER 11: The Globalization of Poverty

Antonia Juhasz is the project director of the International Forum on Globalization. Material for this article was drawn from "Does Globalization Help the Poor?," a report by IFG available at

United States Trade Representative Robert Zoellick has begun to use the horrific tragedies of September 11, 2001 as a rationale to push an aggressive free trade agenda, arguing that we must "counter terrorism with trade." An expansive economic globalization agenda is one of the four policy priorities President Bush asked Congress to address immediately following the attacks of September 11. The administration is arguing that we will end terrorism through trade because economic globalization is the solution to poverty. But all evidence shows the contrary, that economic globalization is a cause of global poverty and inequality, not a solution. Furthermore, this evidence is increasingly coming from within the institutions of economic globalization itself.

For example, the Central Intelligence Agency itself warned in a December 2000 report that economic globalization would increase inequality and poverty, thereby fostering violence: "The rising tide of the global economy will create many economic winners, but it will not lift all boats. ... [It will] spawn conflicts at home and abroad, ensuring an even wider gap between regional winners and losers than exists today.... [Globalization's] evolution will be rocky, marked by chronic financial volatility and a widening economic divide. Regions, countries, and groups feeling left behind will face deepening economic stagnation, political instability, and cultural alienation. They will foster political, ethnic, ideological, and religious extremism, along with the violence that often accompanies it [emphasis added]." (Global Trends 2015, United States Central Intelligence Agency, 2000).

The most reliable data available, predominantly from supporters of economic globalization, demonstrate how economic globalization has caused the most dramatic increase in global inequality and poverty in modern history. Furthermore, this outcome is intrinsic to the economic globalization model. Arguments that economic globalization allows "fragile democracies" to "overcome poverty and create opportunity," as Trade Representative Zoellick wrote in the Washington Post, are seriously mistaken. If such policies are pursued, the world could find itself in even worse circumstances in the future than those we find ourselves in today.

The administration has already begun to move ahead with IMF loans to Pakistan and Indonesia in the name of fighting terrorism. If we wish to help these countries with their economic problems, why are we providing loans instead of direct aid? Why are we using the IMF, an institution that has failed miserably in this region (as former World Bank chief economist Joseph Stiglitz wrote, "All the IMF did was make East Asia's recessions deeper, longer, and harder.") instead of alternative funding sources, such as the United Nations, that historically represent the interests of developing countries? The answer may be that the U.S. government can control the funds that go to a country through the IMF by linking conditions to the loans. These conditions have historically benefited corporate and elite interests over those of the populations of the countries in question.

The CIA is not alone in its assessment of the catastrophic impact that the policies of economic globalization have had around the world. For example, the World Bank--one of economic globalization's leading institutions--reports that "Globalization appears to increase poverty and inequality... The costs of adjusting to greater openness are borne exclusively by the poor, regardless of how long the adjustment takes." (The Simultaneous Evolution of Growth and Inequality, The World Bank, 1999).

The United Nations echoes these words in its 1999 Human Development Report, "The new rules of globalization--and the players writing them--focus on integrating global markets, neglecting the needs of people that markets cannot meet. …