Globalization for Development: Trade, Finance, Aid, Migration, and Policy

Globalization for Development: Trade, Finance, Aid, Migration, and Policy

Globalization for Development: Trade, Finance, Aid, Migration, and Policy

Globalization for Development: Trade, Finance, Aid, Migration, and Policy

Synopsis

Globalization and its relation to poverty reduction and development is not well understood. The book identifies the ways in which globalization can overcome poverty or make it worse. The book defines the big historical trends, identifies main global flows - trade, finance, aid, migration, and ideas - and examines how each can contribute to undermine economic development. By considering what helps and what does not, the book presents policy recommendations to make globalization more effective as a vehicle for shared growth and prosperity. It will be of interest to students, researchers and anyone interested in the effects of globalization in today's economy and in international development issues.

Excerpt

Globalization has been taking place for centuries, moving from the colonization of the inhabited parts of the world to the appearance of nations, from conquests to independent countries, from sailboats and caravans to steamboats, truck fleets and cargo planes, from trade in a few commodities to global production and distribution networks and to the present explosion of international flows of services, capital, and information. Based on Maddison's recent estimates on the world economy over the past millennium, it is possible to calculate that world merchandise exports amounted to approximately US$40 per capita—at today's purchasing power—in 1870. This figure had tripled to US$120 by 1913. After a slowdown due to the two consecutive world wars it was then multiplied by almost 10 between 1950 and 2000, to reach approximately US$1,000 per capita today. Seventeen percent of world output is being exchanged today against less than 5 percent a century ago, and this figure is rising rapidly.

The sheer size of today's global economy is a testament to the speed of change: In 2005, world economic output total US$35 trillion—an amount likely to double by 2030, assuming modest continued growth.

Faced with such a dramatic evolution, the issues that arise are whether it is good or bad for humankind, whether it must be encouraged or, on the contrary, curbed and, if so, by what means. Globalization may be judged by many criteria, but the most important one is undoubtedly development in all its forms and, in particular, poverty reduction. This is the theme of Ian Goldin and Kenneth Reinert's fascinating book.

We are today at a crucial point in the history of our fight against poverty in its various dimensions. Probably for the first time in history, the absolute number of people living on less than $1 a day in the world has dropped, from 1.5 billion in 1981 to 1.1 billion in 2002. It is true that the proportion of people living in extreme poverty in the world has been falling more or less . . .

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