‘De-globalization’ and scandal of widening wealth disparities
Coming in the midst of a global economic downturn, Oxfam’s recent ‘shocking’ disclosures on widening wealth disparities within and among countries, it is hoped, would prompt decision and policy makers worldwide to re-visit and re-energize the Development Debate of yesteryear. Development has always been in focus, thanks to the UN and other international organizations concerned with the world’s material wellbeing, but the Development Debate as such has tended to recede from the global community’s consciousness in the past few decades.
The latter tendency to thrust the Development Debate into the ‘backburner’ of public discussion is probably traceable to the world’s tendency over the past 30 years or so to mindlessly exult over the advent of economic globalization. Almost worldwide, the latter system was seen as the sole answer to material impoverishment, domestic and international. Economic liberalization and the ‘market system’ were generally seen as the primary keys to growth and development.
However, current recessionary trends worldwide are prompting economic decision-makers to re-assess the seeming strengths of globalization and to call for a ‘de-globalization’ process. That is, ‘rolling back’ unregulated economic liberalization and its principal ill-effects is emerging as a priority. For example, the ongoing World Economic Forum in Davos, Switzerland, featuring the world’s foremost economic powers and elites, is conducting its deliberations under the theme, ‘Cooperation in a fragmented world’. This amounts to a frank recognition that economic globalization has not lived up to its expectations.
Globalization was seen having the potential of ushering a degree of economic equity within and among countries, through the creation of equal economic opportunities among social classes, for example, but Oxfam’s recent disclosures expose these premises as flimsy and without foundation. For example, in one of its latest reports the organization states that, ‘The world’s top1 per cent grabbed nearly two-thirds of the $42 trillion in new wealth created since 2020…This share is almost twice as much money as the amount obtained by the bottom 99 per cent of the world’s population’. Besides, ‘Billionaire fortunes are increasing by $2.7 billion a day, while at least 1.7 billion workers now live in countries where inflation is outpacing wages.’
Going by the above revelations, it would seem that it is the already economically empowered who benefit most from economic liberalization and the unprecedented opening of markets to trade, investment and other economic activities. In very many democratic states, the poor may not have been abandoned by their governments but they do not match their wealthy countrymen in the activity of wealth-creation.
The information provided by Oxfam is proof that the majority of people, particularly in the developing world, have been falling into economic backwardness and penury in the struggle to survive. However, the wealthy have been growing rich at a mind-boggling pace.
The rich anywhere cannot be expected to be overly concerned about the poor in their midst, and except for a few of them who engage in some philanthropic activities, the majority of the rich work only towards their personal and familial economic empowerment. However, an obligation is cast on democratic governments in particular to ensure that the rich pay their taxes to the state without default or delay.
If the rich of the world are only getting richer by the day at an unconscionable pace, the conclusion is inescapable that governments are neglecting their duty of compelling the rich to pay the taxes due from them to the state. The inference would also need to be drawn that governments have become so beholden to the rich, for reasons best known to them, that they cannot bring themselves to rein-in the vampirical money-making lusts of the wealthy.
Accordingly, governments of particularly wealthy countries are duty-bound, if they are not complicit with tax evaders within their jurisdictions, to compel the wealthy to adhere strictly to the tax regulations prevailing in their states.
Once this is done, governments are obliged to use such tax funds to work towards the improvement of the situation of the poor and other vulnerable sections within their countries. May be, they could develop the entrepreneurial capabilities of the disempowered. This is a vital aspect of a country’s development.
If the above is not happening in countries, then the governments concerned are as culpable as tax dodgers. Hopefully, this question would be fully discussed and debated at Davos.
However, if the Davos talks are not be seen as purposeless, they would need to fully re-visit the almost forgotten Development Debate. One of the prime issues to be broached in this connection is what is exactly meant by economic development? Economic growth occurs when a country’s goods and services progressively increase, resulting in an uptick in the country’s GDP. However, development takes place when growth combines with re-distributive justice. That is, when the goods and services of a country are equally and fairly distributed among a country’s population. Thus, growth and equity need to go hand-in-hand.
It is the bounden duty of democratic governments to use the taxes they raise from among the wealthy in the country’s growth process and ensure that the fruits of this endeavour are distributed among particularly weak and vulnerable sections.
However, intra-country development and international development need to be seen as closely intertwined. It is unclear whether the world’s economic powers see the symbiotic link between these processes. If global peace and stability are to be given a chance, not only must countries develop, but there need to be wealth and resource transfers from the rich countries to the poor countries. This was at the heart of the ‘New International Economic Order’ concept of the seventies decade when the developing world campaigned for global economic equity under the leadership of the Non-aligned Movement.
Recently, the world’s wealthy countries went to the assistance of flood-ravaged Pakistan, although the aid offered fell short of the country’s requirements. However, this was proof that if sufficient moral pressure is brought to bear on the rich they would go some distance in assisting developing countries in their times of distress. Such exercises need to be continually replicated.
As could be seen in the current recession, except for the number one economic powers, the rest of the world is suffering steady economic debilitation. The growth processes of the majority of countries are slowing down and inflation is in galloping mode. The poor are suffering progressive disempowerment. These conditions are a recipe for global disaffection and violence, unless the rich countries see it to be in their interests to assist the poor countries.
