Progress on poverty
Economic statistics bemuse and baffle in equal measure. What matters is the human effect, and in that regard nothing matters more than the reduction of poverty. On that, there has been progress but far from enough. According to the World Bank, the proportion of the world's population living on $1 a day or less was 22% in 1993, or 1.2 billion people. By 2001, the proportion had fallen to 17.8%, or just over a billion people. Detractors wave even this aside by saying it is “just Asia”. Well, it is true that Africa is the continent that has tragically had regress, not progress, because of war, the ravages of disease, and decisions by too many governing elites to stick to kleptocracy. But given that “just Asia” takes in half the world's population, we should still be encouraged by what has happened. Martin Ravallion, a poverty expert at the World Bank, estimates that if present trends persist the number living on less than $1 a day will have dropped to a little over 620m by 2015, or about 9% of world population.
But will they persist? Plenty of people would like to stop them, even some who think they care about poverty. In much of the rich world, globalisation is seen as a threat, to jobs, incomes and the environment. On jobs at least, the facts suggest the opposite: unemployment in the OECD countries in 1993 was 7.8% of the workforce; on the latest figures it is 6.3%. What has occurred, though, is an increase in inequality within the rich countries. The huge expansion of the global labour force represented by the liberalisation of China and India has held down the incomes of the unskilled in all countries; the spread of information technology has had the same effect. The politics of that inequality is finding expression in the rise of economic nationalism in Europe and America.
Protectionism is always a danger and always will be: those who lose out from competition make louder noises about it than the more dispersed, albeit larger groups who gain. It will feature strongly in America's congressional elections in November, it already lies behind the roadblocks being laid in Europe and America against foreign takeovers, and is even being expressed in China itself (see article). Deplorable though all such protectionist lobbying is, however, it does not currently pose a serious threat to globalisation. The economic forces in favour of liberalisation remain strong. The most serious threats lie in the murkier world of international politics.
http://www.economist.com/opinion/displaystory.cfm?story_id=6744590