The unremarkable record of liberalized trade After 20 years of global economic deregulation, poverty and inequality are as pervasive as ever
by Christian E. Weller, Robert E. Scott and Adam S. Hersh
http://www.epinet.org/briefingpapers/sept01inequality.html
juicy excerpt:
" . . . Finally, the World Bank’s conclusion that the lot of the poor has improved during the era of increasing trade and capital flow liberalization relies substantially on data from China and India, but the experiences of both countries are anomalies. In reality, the facts in these countries undermine the case for a connection between greater deregulation of capital and trade flows and falling poverty and inequality. While in China the percentage who are poor has fallen, there has been a rapid rise in inequality (World Bank 2001a). Most notably, inequality between rural and urban areas and provinces with urban centers and those without grew from 1985 to 1995. Also, a large number of China’s workers labor under abhorrent, and possibly worsening, slave or prison labor conditions (USTDRC 2000; U.S. Department of State 2000, 2001). This situation not only means that many workers are left out of China’s economic growth, it also makes China an unappealing development model for the rest of the world. Thus, improvements in China are not universally shared and leave many workers behind, often in deplorable conditions.
Using India to illustrate the benefits of unregulated globalization is equally problematic to the World Bank’s position, since India’s progress was accomplished while remaining relatively closed off to the global economy. Total goods trade (exports plus imports) was about 20% of India’s gross domestic product in 1998, or 10 percentage points less than in China and only about one-fifth the level of such export-oriented countries as Korea (IMF 2001a). Moreover, that the IMF (1999, 2000) continuously recommended further liberalization of India’s trade and capital flows—the only large developing economy for which this was the case—suggests that the IMF viewed India as a laggard in deregulating its economy. . . "