Poverty has been a pervasive phenomenon in the world. Hunger, high level of illiteracy, high rates of child morality to mention but a few, all have characterized poverty. In response to fight against poverty, several strategies have been developed globally to help improve the quality of human living which have had different impacts on social, economic and political spheres. The purpose of this presentation is it to discuss the global poverty in the context of globalization, the role played by international monetary agencies in addressing this issue and the resulting effects on culture.
Global poverty It has been found that almost half of the people in the world are living on less than $2. 50 in a day and more than eighty percent of the world’s population live in the countries which have a widening income difference. This is reflected by the fact that forty percent of the poorest of the world’s population account for only five percent of the global income while twenty percent of the richest people account for three quarters of the whole world income (Wilson, pp 172).
In level of literacy, it has been found that close to one billion people have stepped in twenty first century unable to read a book or even be able to sign in their names (Birdsall, Kelley and Sinding pp 153). Approximately forty million people are living with HIV/AIDS and about five hundred million cases of malaria are witnessed every year. Africa has the highest percentages of these cases and deaths. In the developing countries majority of people do lack adequate access to clean and safe water and still a greater portion lack basic sanitation.
Children who are born, one billion live in poverty while about six hundred and forty millon children live without adequate shelter while about four hundred million children lack access to safe water. In rural areas three out of four people are found to earn less than $ 1 and the same proportion of the world population is malnourished. The growth of slums is at alarming rate where out of half of world’s population living in cities and towns, one out of three urban dwellers lives in slum conditions (Otlin, pp67-69).
Globalization and Poverty Reduction The term globalization refers to a process of interaction and integration that involves different groups such people, government of different nations and companies. It is driven by international trade and investment and is aided by information technology. It has caused significant effects on culture, environment, political systems, economic development and human physical well being of many societies around world (Lawig, pp15).
The ideology of globalization has been made effective by policies that have paved way to economies both locally and internationally. The world has become a global village. Commodities which had been earlier confined in one part of the world are now available across the globe. Both goods and people can reach destinations in a relative short time due to improved infrastructure. Also, work can be outsourced from any part of the world provided there is internet connectivity. Apart from policies, technology has been the great driver of globalization.
Information technology has also become an important tool for identifying and perusing economic opportunities in the fastest rate possible in addition to more informed economic trends analysis. In the context of global poverty, globalization is considered to be an approach to boost the poor countries and their citizens to develop economically and improve their living standards. Free trade creates new opportunities for new investments, jobs and enhances more efficient way in resources use that in turn increases productivity.
Liberalization of capital flows enables greater access to external resources needed to finance investments. Besides this, foreign direct investment do encourage the transfer of technology , easy accessibility to a wider range of better quality of goods at competitive prices in addition to managerial expertise and skills (Niggle, pp 22-24). World Bank and IMF The World Bank and International Monetary Fund (IMF) are main international financial institutions in the world. In Africa for example, they are the major sources that provide financial support.
Over the past the poorest countries in Africa have often turned to World Bank and IMF to request for financial support due to their impoverished situation. To be able to implement this, these agencies have Structural Adjustment Programs/Policies (SAPs). These are economic policies that must be followed by any country that is in need of their loans. These policies in many countries, they have common principles such as export led growth, privatization, liberalization and efficiency of the free market (Winter, pp36). Structural Adjustment Programs demands the countries to devalue their currencies against the dollar.
This helps to make goods cheaper for foreigners to buy. Also there is need for the government to balance their budgets and not to overspend, remove price controls and state subsides. Balancing national budgets usually should be through cutting government spending and usually not by raising taxes. The implication of this is deep cuts in government programs such as education, health, social care as well as removal of subsides that are aimed to control prices of basic necessities such as food. These SAPs often emphasis on production and exportation of primary commodities like tea and coffee for earning foreign exchange.
However, in practice the Structural adjustment Programs have only result to escalating state of poverty in countries where they are implemented due to various reasons. First, privatization requires governments to sell off the enterprises to private owners and in many cases they are foreign investors. This result to lay-off and pay cuts for employee in these privatized organizations. Secondly, reduction in government spending results to reducing services to the poor especially the critical ones such as health and education.
Thirdly, the promotion of exports by countries as required in SAPs is done at the expense of production for domestic needs. This is because the export orientation is often involved with displacement of people who grow food for their domestic own consumption because land is occupied by plantations for growing crops for foreign markets. The fourth factor is that increased interest rates that are recessionary are bound to affect national economies in that small businesses where women are the main actors find it hard to access to affordable credit which make it hard to survive.
This leads to unemployment. Lastly, trade liberalization requires elimination of tariff protections for industries. When this happens in developing countries, it causes mass layoff of employees. For instance in Mozambique World Bank and IMF ordered for removal of export tax on cashew nut that caused about ten thousand workers to loose their jobs (Udayagiri & Walton, pp101-102). Effects of World Bank and IMF Aids on Zimbabwe: A Cultural Perspective Culture can be defined as the perspectives, practices and products of a social group.
It is shared patterns of behaviors and interactions, cognitive constructs and affective understanding that are acquired through socialization process. It is through these shared patterns that identify the members of a particular culture group and also it distinguishes those of another group. The following is a cultural perspective discussion on the effects of international monetary funds and globalization in Zimbabwe. Since Zimbabwe sought aid from IMF and World Bank and adopted their Structural Adjustment Programs, the situation has been deteriorating.
The negative effects of Structural Adjustment Programs have not been felt on economy levels alone but also in the Zimbabwean culture. Zimbabwe was a choice in this presentation because of its current worrying socio-economic trends which have been catalyzed by high inflation rates than any other African country and has also witnessed tight IMF/World Bank screws (Mumbengegwi, pp 22-26) When IMF demanded adoption of SAPs by Zimbabwean government they were not tailored to address the local needs of common man. Rather they were in favor of foreign investors through trade liberalization.
One of SAPs required Zimbabwe government to privatize state owned enterprises. This is culturally because most of Zimbabweans have been known, for instance, to be small-holder dairy farmers as their livelihood. As result of privatization, for instance of dairy cooperatives through floatation of share, majority of the farmer experienced a cultural crisis. This is because they were unable to continue with their selling of milk. They could no longer enjoy relatively cheap and affordable credit facilities as before making it impossible to continue with dairy farming.
Also the issue of privatization provoked alterations in land tenure system. It has been a tradition to own land on communal basis as opposed to private land ownership. However, this tradition has been broken through issuing of freehold title to male landholders which never used to exist before. This anticipated productivity crisis particularly in farming system in many small scale commercial farming. SAPs had effect on the Zimbabwean culture of maize farming. Before implementation of SAPs in Zimbabwe, the country was used to grow maize in large scale which made it to have enough to feed its population and have stock piles.
But due to the demands of World Bank and IMF for the country to be export oriented to increase if foreign exchange, it forced the country to sell all of its stockpiles in obedience. Due to unfavorable climatic conditions, now Zimbabwe does not have any maize reserves to feed it population as it was its culture. It now relies on importation which is scarcely enough to meet food needs of it starving citizens. Before, introduction of export-oriented concept in Zimbabwe, it practiced traditional farming that focused on growing of indigenous crops for local consumption.
This has gradually phased out because of SAPs demand for growing crops that are export oriented. Instead of improving on indigenous crops that will enhance attainment of food sufficiency , community has ended up suffering from extreme hunger because growing the local foods have been abandon for cash crop growing. To facilitate cash crop growing, most of land was commercialized. This privatization and commercialization of land have suppressed women rights in regard to land control. In the past when communal land system was practiced, women had access and control over the land.
But commercialization and privatization of the land in the country have adversely affected land rights of most of the women because they now have limited access and control of the land despite the fact that they are the main contributors in agricultural production (Wod, pp 122). World and IMF policies further demanded the Zimbabwean government to reduce its national budget by retrenching certain number of employees and strict wages control. In addition to this, it was expected to cut down social spending on health, health and public services and charge them some fee.
To make matter worse apart from privatization of state owned enterprises, Value Added Tax was to be introduced. This resulted to high cost of living which altogether affected the normal way of living of Zimbabwean citizens. This led to high rate of unemployment. In response to this family ties started loosening as many men migrated in search for jobs causing increased rate of female headed household in the country which is contrary to existing culture. Thorough keen scrutiny, one would clearly see that globalization ideology is Structural Adjustment Policies in disguise.
This is because it also lobbies for trade liberalization. Because the majority of Zimbabwe citizens are small scale entrepreneurs, trade liberalization has severely affected them. Women being the major actors in agriculture production, trade liberalization have failed them to acquire credit and other farming inputs because of their high cost. This has resulted to increased rural urban migration, great number of squatters in urban areas and high crime rate which has now become a new cultural phenomenon. There has been increased moral decay.
Significant numbers of women have resorted to cross border trade whereby there have been several reported cases of extramarital affairs while the husbands who have been left at home indulge in the same (Schweiker, pp11). Children are no longer seen by fires side listening to counsel that instill values and norms that hold society together because every one is struggling for survival as living standard has skyrocketed in the country Conclusion World Bank and IMF policies have caused more evil than good in the countries which they have been implemented.
SAPs have not been tailored to address the poverty situation in developing countries but are only to cater the interest of those formulated them. They do not attempt to address poverty using local context perspective but are generalized to favor the international corporations from developed countries. But because aid can not be given without compliance to these polices, the needy countries end up falling being their preys. Both SAPs and globalization is one and the same thing and their effects are not only felt in spheres of political or economies alone but also deeply felt at cultural sphere.
Their effects alter practices and perspectives of community by imposing a change in tradition way of doing things and because of the essence for survival some practices are dropped while others are adopted to cope with the present challenges that are threat to human living such as hunger. References Birdsall, N. Kelley, A. C. , Sinding, S. ; Population Matters: Demographic Change, Economic Growth, and Poverty in the Developing World. ISBN 0199244073, 9780199244072, Oxford University Press, 2001. Mumbengegwi, C. ; Macroeconomic and Structural Adjustment Policies in Zimbabwe. ISBN 1403914419, 9781403914415.
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