Winners and Losers of Globalization
Globalization brought in a lot of changes, some negative and others positive. This is the reason why it is said that there are winners and losers of globalization; there are those that it changed for the better and others that it drove towards the path of poverty and desperation. It is generally believed that there are only two groups that emerged as the winners of globalization. These are the countries that were very rich or occupied the top spot in terms of the distribution of national and global income and those that were at the middle-level of emerging market economies like Indonesia, Brazil and China.
To date, it is still challenging to either confirm or reject these insights. However, a database of surveys conducted by the World Bank and other organization on households offer a clear picture on the winners and losers of globalization. From the statistics, we are able to get the clear view of the impacts of globalization in the past two decades, stretching from 1988 to 2008.
Based on the report by the World Bank, it is indicated that the top of the global income distribution are the ones that registered highly significant increases in per capita income. Closely following suit at are the emerging global middle class economies that comprise of more than one third of the population of the world. Within the period of the past two decades, the top 1% has seen their real income shoot upwards by more than 60%.
When trying to unearth the real winners and losers of globalization, it should be noted that there was an even greater increase by those sections of the global income distribution that occupied the median. These experienced a real increase of around 70% to 80% at the median.
Around the 50th and 60th percentile of global income distribution, is where we find some 40 million Indians, 270 million Chinese, 35 million Indonesians and 20 million Brazilians. Besides, there are also some Egyptians and Mexicans. These parts are occupied by people who in 2008 had annual per capita incomes ranging between 1,100 to 1,600 international dollars after tax. Even at the bottom third of the global income distribution table, we also find that significant improvements have been made with the incomes rising above 40% to about 60%.
The poorest 5% of the world’s population whose real incomes have only managed to move up by 16% can be termed as the losers. These are people whose real incomes within the two decades period only improved by single digits. In other words, they can be referred to as the global upper-middle class and include Communist nations, Latin America and the citizens of rich countries with immobile real incomes.
The winners of globalization are basically the elite transnational capitalist class who are mainly from the developed countries. Their economic interests are usually globally focused. The losers are the low qualified or unqualified who mainly operate in markets with little competition. It should be noted that even capitalists in developing nations are losers.
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