Those who are dubious of the benefits of globalization point out that poverty has remained stubbornly high in sub-Saharan Africa.Countries that have liberalized their capital markets are especially susceptible, as short-term capital that has whooshed into a country on investor whim whooshes out just as fast when investors panic.Some economists argue globalization helps promote economic growth and increased trading between nations yet, other experts, as well as the general public, generally see the negatives of globalization as outweighing the benefits.In the rush to declare the end of globalization, it is important to remember that the theory of comparative advantage hasn’t gone away.Governments now focus on removing barriers to trade and promoting international commerce. This evolution of economic systems has increased industrialization and financial opportunities in many nations. In addition, rural credit has disappeared, as the government has effectively shut down the rural bank, which was badly run, and other banks won’t lend to small farmers.Ĭountries are consuming more finite resources, such as oil, and many corporations cut costs by taking advantage of lax pollution laws in developing countries. The program is focused on the poor, but the payments are symbolic - $36 an acre. A system in which the government purchased farmers’ corn at a guaranteed price - done away with in states like Puebla during the free-market reforms of the mid-1990’s - has now been replaced by direct payments to farmers. Instead, it could be spending money to bring farmers irrigation, technical help and credit. But to turn the farm families’ malnutrition into starvation makes no sense. When they could no longer roll over their debts, Latin American economies crashed, and a decade of stagnation resulted.
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