Make your own free website on
Poverty, Wealth & Globalization: An Essay


Me & My Existence | Words & Thoughts Withheld | Photos Taken & Treasured | Guestbook | Correspondence By Writing | Favorite Links | Research Paper Proposal | Legal Maxims | Words Said & Remembered | Guide for Investors | Essay | 2003 National Budget | The CFA Exam | Investment And Finance | The World of Politics


Wealth and poverty: A blessing or catastrophe in disguise, the case of globalization

The Personal Site of Ackim



            In wealth and poverty is a debate that there was, and here is, to stay. Filled are minds with questions when the words are mentioned. Coupled with this is the wave of globalization that is spreading so fast than everyone is willing to accept. Is it a blessing in disguise? Is it a catastrophe waiting to happen? Is it some kind of SARS (Severe Acute Respiratory Syndrome) that none knows much about? What role does globalization play with regards to the wealth and poverty of nations? This essay will address these issues in attempt to show the disparity between the rich and the poor. It will consider views as to why some nations are rich and others poor. This essay, within reasonable limits, will then suggest the need of asking the right questions if the reality about globalization is to be known.


Poverty - the enemy within


Why are some nations poor? Let us consider briefly the case of Zambia, which is, but, just the tip of an ice berg. My heart sank, oh God, this cant be true! Thats how I felt after seeing the figures about the worlds poorest countries. At about the same time, I had the following conversation with a friend. I am watching World Vision right now; many children are suffering in the world, echoed Shabrina. Oh yes, there is a lot of suffering, and the war on Iraq hasnt made things any better. Where was that depicted from? I am not exactly sure, but many children are from Zambia, I think, I want to sponsor one. What, is that so? Visit I couldnt see Zambia on the link, but then, theres no smoke without fire!


Zambia ranks 17 on the worlds poorest countries based on Gross Domestic Product (GDP) (see Zambia is potentially rich and the country enjoys a relatively open economy. Fact: Zambia was exposed to stock market with the opening of the Lusaka Stock Exchange (LuSE) in February 1994. Fact: The majority of the Zambians are educated, and the country is peaceful. Fact: Zambia is one of the major copper producing and exporting countries.


At the peak of copper production, Zambian per capita incomes were 4 times bigger than per capita income of Malawi, Tanzania and Zaire.Today production has stagnated, and Zambia has been replaced by Chile, as the largest copper producing country in the developing world. (


Zambia exemplified a liberalizing state in Africa through privatization--good news to donors. However, most of the foreign assistance went to debt obligations; little, if anything, was used for socio-economic development. There were cries for mismanaged privatization and corruption. With competition, the economy hardly presented a sunny disposition. As Osei-Hwedie (2003) puts it,


Real per capita GDP declined by more than 20 per cent in 1991 1995, and the number of people living in poverty increased overtime to 73 per cent in 1996. Rural poverty stood at 83 per cent, while urban poverty was estimated at 56 per cent.


This case shows why some nations are poor. The essay argues that the failure to innovate, come up with feasible plans, and implement plans disadvantages poor nations. Most of these nations have what it takes to become rich, but lack the brains or the capacity to utilize the brains. Poor theyll remain without investing in education! The drilling of oil, say, requires drilling tools of high quality and durability at points touching the ground to avoid easy wear and tear. This calls for the qualities of diamond, which is found in many parts of Africa. Be as it may, most of the companies, if not all, involved in this business arent from Africa! If only the countries having diamond deposits knew what theyre worth, and acted like it, perhaps, they wouldnt be poor! A pity, it is!

The failure to reward innovation, the pursuit of self-interest, corruption, mismanagement, and the inability to change cause poverty, this essay claims. Take the recent food crisis in the southern region of Africa for instance. Kriner (2002) says, Millions of people are facing hunger, disease and death as a devastating drought has destroyed crops and created the most severe food shortage in six decades. This essay contends that starvation in this region is not caused by food shortage, but rather, the lack of learning. It argues that floods, droughts, whatnots, are not new in Africa, and if people continue to be victimized by things witnessed from time immemorial, means that they are not learning. For if by any grain of truth people learn, ways for the better would be devised, involving strategic planning. This essay believes that the natural phenomena have a severe impact on food production within a country; however, something can be done to reduce their continued effects, say, irrigation and minimizing dependency on a crop. We cant wait for a calamity to happen. Food production is one thing than many African countries can do without the assistance of the outside world, for it doesnt require the rigors and capitals of the industrialized world! Yet, its a challenge. Poverty is the enemy within.

This essay asserts that the misfortune of poor countries is also the doing of the outside forces, in the form of exploitation. Part of this exploitation is exemplified in globalization. This essay feels that globalization weakens poor countries and exposes them to unwarranted competition. It is because of this that the rich have become richer and the poor poorer! Indeed, with globalization is competition among entities for trade, foreign investment, or government borrowing. Competition is good but not when it injures! Rich countries will open up their markets for quality goods. It goes without saying; they will place conditions on goods entering their countries to save their face. Failure to meet those conditions means one-sided globalization where the markets of the poor countries are opened to the rich and not vice versa.

Let us consider loans provided by the donor community. Fact: the IMF grants loans and places terms and conditions for internal control. Its like; we are giving you this, but let us show you how to run your economy, else, you are getting nothing. Fact: the loans granted bear interests, which double and multiply. In the end, poor countries fail to even repay the interests, forget the principal! These countries busy themselves servicing debts rather than social programs for development! This is like giving help with one hand and taking it back with another. In the name of help, why not grant interest-free loans instead? The cancellation of debts comes rather late. It is like inflicting pain on someone and then giving him medicine for the pain that you caused. Where is this world heading to?


Wealth knowledge is wealth


            Why are some nations rich? It is said in the Quran,


If I had knowledge of the unseen, I should have multiplied all good, and no evil should have touched me (Quran 7: 188).


Without doubt, knowledge is important. Lacking knowledge spells trouble. How many people have made mistakes because of ignorance? How many people have lost their lives because the only crime they committed was that they didnt know what to do with different concerns in different situations? Knowledge brings about the multiplication of good and the elimination of evil. If you got tomorrows news today, you will be prepared to deal with eventualities. You can use the information to your advantage and avoid the occurrence of something bad. Its like insider information--imagine how much profit you can make knowing a company has valuable deposits of copper, lead and zinc on its premises before it becomes public knowledge? Buy a couple of shares in the company, and voila, you are on your way to financial freedom when the news becomes public through the appreciation of the value of shares! Thank goodness, theres the law! This essay suggests that rich nations will reward and encourage the acquisition of knowledge. This allows innovation, which, if coupled with proper planning causes growth. Growth is good for development, and development allows nations to become rich.


Case: in the 1997 Asian crisis, the fall of the Thai baht was apt to affect the Malaysian ringgit vis--vis the economy through contagion effects, but Malaysia wasnt worried. Fact: real GDP grew at about 8.5% per annum; inflation was at its lowest; external reserves could meet about 4 months of retained imports; enough national savings to finance 95% of total investment outlays, Non-Performing Loans were only 3.6% of total outstanding loans at 3-month classification. Fact: the average risk-weighted capital ratio (RWCR) of the banking system was more than 8%, the minimum by international standards; and there was a fiscal surplus. Malaysia agreed to give Thailand a US$1billion loan, of which US$862million was promptly disbursed. The Malaysian leaders identified the root causes of the malaise pointing at speculative trading. Malaysia instituted capital controls, which included fixing the exchange regime at RM3.8 to US$1 despite criticisms from within and out. The medicine was administered and worked. Needless to say, the peg is still very much alive and kicking.


How does globalization contribute to the wealth of nations? This essay believes that globalization can promote growth, which in turn reduces poverty. This generates wealth, which could minimize if not eliminate poverty worldwide and thus reduce the inequality between the haves and the have-nots. The World Bank (2001) claims that

Globalization has helped reduce poverty in a large number of developing countries but it must be harnessed better to help the worlds poorest, most marginalized countries improve the lives of their citizens.

This testifies that globalization is capable of making this world richer; however, it must be utilized better so that it works for the good of all, else, it promises nothing more than half truths, where only the strong reins.

Globalization encourages pursuing profits. Both the industrial and developing nations benefit through loans as capital inflows in the developing world which provide a window of opportunity for development. It becomes easier for consumers to obtain goods made from far with reduced tariffs. Producers of export goods benefit by participating in a wider market, but producers for a local market dont, however, competition from abroad prompts them to offer goods of better quality to satisfy their customers. Thus, globalization can be good.


Globalization a paradox

Globalization broadly refers to the expansion of global linkages, the organization of social life on a global scale, and the growth of a global consciousness, hence to the consolidation of world society. (  

Globalization is spreading unabated, though filled with contradictions. Debates are rife. Iqbal Z. Quadir says, I have mixed feelings about globalization. I am very concerned by one aspect of it gobbleization when bigger entities gobble up smaller entities (Newsweek, 1999 Dec 2000 Feb, p.61). In the same source Jacques Rogozinski says, For me globalization is dictated by industrial countries. But the industrial world wants to get all the benefits and doesnt want to get any of the costs. Globalization creates an atmosphere where the fittest survive best, this essay concurs. However, it contends that globalization is not wholly bad. 


Some views favor globalization, arguing that it has led into the increase of world trade, international flow of capital, and the number of students from poor nations studying in the developed world, which has caused global income growth (Becker, 2003). However, the author maintains that most of the African nations and some Asian nations have stayed behind, despite that collectively; the per capita GDP of poorer nations has grown faster than that of richer nations, with their population growth even faster! To this effect, Joshua Karliner asserts that,

Underpinning this effort is not the historical inevitability of an evolving, enlightened civilization, but rather the unavoidable reality of the overriding corporate purpose: the maximization of profits.Its primary beneficiaries are both the transnational corporations, as well as the privileged consumer classes in the North and to a growing degree, in the industrializing nations of the South. (

Things were not rosy during the 1997 Asian crisis with globalization when a small trading activity in one part of the world could wreck economies in another. Bradford DeLong says,

Chin-stroking neoliberals apologized for the "excesses" of the market. They agreed that market forces are occasionally a little reckless in their roughhousing. But they stressed--like any owner of a Rotweiller--that if you only realized that you shouldn't make any sudden moves to disturb the animal, you wouldn't get bitten again....And to fail to understand what is going on now will diminish our chances of collectively choosing wisely tomorrow. (


Discussion a metacognition


This essay is a process of thinking about thinkingmetacognition, where it discusses the discussed concerning the wealth and poverty of nations and the impact of globalization on them. The opponents of globalization claim that it has contributed to greater poverty, greater inequality between and within nations. The proponents of globalization assert that its for the better. Others feel that globalization should be harnessed better if its fruits are to be realized by all.


Proofs abound. This essay asks, who is telling the truth? What if everyone is telling the truth? What if globalization really reduces poverty and global inequalities? What if globalization creates a richer world? What if it cant do any of these things? This prompted this essay to suggest further studies in order to acquire much information about globalization and its realities and make few assumptions for the betterment of the world at large.


This essay argues that, in a way, globalization is like SARS for it is gripping people with fearonly time and research will tell confidently what it does, how it happens, and who is affected and to what extent. For all we know, globalization could be a blessing in disguise or a catastrophe waiting to happen. Hopefully, not the latter! However, with knowledge, people will be able to brace themselves for the better, even it be the latter.


Investing in education, health, social programs and the equitable distribution of assets promotes development in a community, where jobs are created. The Modernization paradigm for example, with societies moving through stages from traditional, to transitional and modern societies can really be a developmental process if it is not enveloped in hidden motives of social control, which pass as exploitations convenient conundrum. The champagne glass effect suggests that it is not enough to advocate globalization; let people look yonder the integration.



This essay brings forth lessons for the wise. There is no solution that solves all. The essay suggests that governments should learn. Globalization should accompany policies and programs to reduce poverty. Market liberalization is good, only as it increases the employment rate. Innovation, coupled with strategic planning, the ability to change and the equitable distribution of wealth, is a key to development. It is high time that useful questions are asked to get right answers for right actions. Is that too much to ask?



Ali, A.Y. (1992). The meaning of the Holy Quran: New edition with revised translation and commentary. USA: Amana Corporation


DeLong, B. J. Globalization and neoliberalism. Chronicle of Higher Education, available at, May 1996. Zambia Copper Case, 2003. Worlds Poorest Countries

CorpWatch (2001). What is globalization? In J. Karliner (1997), The Corporate planet: Ecology and politics in the age of globalization, Sierra Club Books, available at

Kriner, S. (2002, July 18). Food Crisis Escalates in Southern Africa, available at

Newsweek (1999, December 2000, February). 003, April 21). The risk of losing something big: Issues 2000. Newsweek, Inc, p.61


Osei-Hwedie, B. Z. (2003, January/February). Awakening of civil society: In defense of transparency and accountability, the case of Zambia. Africa Notes. Cornell University, NY: Institute for African Development


The World Bank (2001). Globalization, growth and poverty: Building an inclusive world economy, available at