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Wednesday, July 28, 1999

Globalisation offers great opportunities, but needs human face 

Romesh Diwan  
In the last analysis, we act on the basis of our values and ideology. When I came to England in 1961 for studies paid by a Commonwealth Fellowship, my friends and relatives congratulated me. However, my grandmother had a different perspective. She said that it was not an occasion for celebration but instead of sadness that I have to live away from the loved ones. As I try to understand alternative perspectives, it becomes clear why Mahatma Gandhi made such efforts and spent much of his brother's money to become a proper "English gentleman." At that time, the idea of being an English gentleman seemed very important to him. Ideas thus are very significant; and so are the institutions that promote specific ideas based on a particular perspective.

Since 1990, the United Nations Development Program has been producing an yearly Human Development Report defining human progress on the basis of per capita income, average life expectancy and literacy. This week it has published the Human Development Report 1999; AHuman Face for globalisation. In its earlier reports, this report is also based on the global idea that the civilization direction in he world today is accurate; however, it needs some correctives at the margin. By offering some suggestions for these corrections, it further legitimizes the current world order and the rules by which the game is played. Since globalisation is the fashionable buzzword today. this Report promotes the status quo by suggesting that globalisation is the right objective. Hence, it makes an argument to give globalisation a human face as a possible goal for improving human well being. "globalisation... offers great opportunities for enriching people's lives and creating a global community based on shared values." The implication is clear. If globalisation can have a human face, then it will be a good world order. Hence all national elite need to promote globalisation in their own country; even if many of these are pauperizing.

The rub lies in its underlying assumption, that thecurrently unfolding world order, and therefore, globalisation is the desired path, because all the statistical information contained in the Report contradicts it. The facts it presents are: "The fifth of the world's people living in the highest income countries has 86 per cent of world gross domestic product (GDP), 82 per cent of world export markets, 68 per cent of foreign direct investment, and 74 per cent of telephone lines." Not only that, social environment has deteriorated. Corporations and criminals are the biggest beneficiaries of this globalisation. While corporations exploit world markets, criminals exploit markets for drugs, arms and prostitutes. Underworld bosses now command organizations with the global reach of multinational companies and six major international crime syndicates are believed to gross $1.5 trillion annually from the proceeds of crime.

There is nothing new about these facts of social decline and growing inequality between materially rich erstwhile Western colonial countries andmaterially poor old colonised countries elsewhere. Such fact have been produced, and displayed, in every Human Development Report for the last 10 years. In spite of this information, these facts have not changed. On the contrary, these have deteriorated. Thirty years ago, the gap between the richest fifth of the world's people and the poorest stood at 30 to 1. By 1990 it had widened to 60 to one and today it stands at 74 to one. In terms of consumption, the richest fifth account for 86 per cent while the bottom fifth account for just one per cent.

Committed as it is to the rightness of globalisation, the report puts a positive spin when it states that the quality of life for many of the world's poor is improving because between 1975 and 1997, life expectancy in Third World countries rose from 53 to 62 years, adult literacy rates climbed from 48 to 76 per cent, and childhood mortality rates from 149 per 1,000 live births to 85. Hence, some countries "have overcome severe levels of human poverty;" where humanpoverty is narrowly defined. I have shown the narrowness of this concept in my article; "Mahatma Gandhi, Amartya Sen and Poverty" (Gandhi Marg, Vol 20 No 4 January-March 1999, pp421 -444). Poverty is defined, a la' Sen, only as an attribute of the poor who need certain "capabilities" provided by education, health and income. Human Development Index is based on this general idea. For the past decade these reports have ranked countries by this index. In no way does this index change the ranking between the "poor" and "non-poor" countries and these remain similar to the rankings in the annual World Development Reports based only on GDP per capita. The rankings over the decade have also not changed. For all practical purposes, this index supports the conclusions from World Bank type analyses.

Though it is difficult to answer why, perhaps because of ideological bias and institutional need to concentrate on the erstwhile colonised countries, the report misses the cutting edge research on human development in therich countries dealing with ecological damages and declining quality of life. On the ecological side, private researchers in Western countries have now collected time series data and developed the GPI - Genuine Progress Index - that includes many ecological indicators. For the US this index shows that there has been no progress during the last 50 years; the index in 1995 has the same magnitude as sin 1949. There are similar conclusions for UK, Germany, etc. It is now increasing realized that material wealth is not a good indicator of quality of life; it may even be a source of its decline. I have explained this in my "Relational wealth and the quality of life" to be published in Journal of Socio-Economics.

On the social psychological side there are two additional sets of research results. One, a number of studies by psychologists over the last few years conclude that satisfaction simply is not for sale. "Not only does having more things prove to be unfulfilling, but people for whom affluence is a priorityin life tend to experience an unusual degree of anxiety and depression as well as a lower overall level of well-being. Likewise, those who would like nothing more than to be famous or attractive do not fare as well, psychologically speaking, as those who primarily want to develop close relationships, become more self-aware, or contribute to the community." (Alfie Kohn, "In pursuit of affluence, at a high price" The New York Times, February 2, 1999). In a major 1993 article in Journal of Personality and Social Psychology. Tim Kasser and Richard Ryan talk about the dark side of the American Dream.

Two, new research is now providing important evidence that health and risk for disease depend more on "relative" instead of "absolute" income. Social class, measured not only by income but also by education and other indicators of social status, predicts health far more effectively than even genetics, exposures to carcinogens and smoking. Most of the social status indicators generally, and certainly among the marketoriented societies, are directly correlated with material wealth. This research therefore shows that a wide variety of illnesses, including cardiovascular disease, diabetes, arthritis, infant mortality, many infectious diseases and some types of cancer, varies with relative wealth or poverty. The higher one is on the social ladder, the lower the risk of such diseases. It is not difficult to explain these conclusions. After all we are social human beings and relative status produces among us all sorts of stress and poisonous emissions through envy, anger, etc. We all feel good in families, communities and neighborhoods where we have a sense of belonging. That is why Gandhiji pleaded so much for swadeshi and village development. "If relative standing in the community is what matters most in protecting public health, then the modern world has been headed in the wrong direction for at least 20 years. Inequality has been increasing for 20 years, and not by accident. Most households in the U.S. have lower net worththan they did in 1983, and the wealthy few are far wealthier than they were in 1983. Between 1983 and 1995, the inflation-adjusted net worth of the top 1 per cent of Americans swelled by 17 per cent while the bottom 40 per cent of households lost 80 per cent. In other words, the gap between the rich and the rest of us has widened. It is this widening gap that gives rise to disease, research shows." (Erica Goode, "For Good Health, It Helps to be Rich and Important," New York Times. June 1, 1999, pgs. D1, D9.).

Every study confirms that globalisation has led to increases in inequality. It shuold not be surprising that :Diana Smith finds that globalisation has harmed the health of the poor. (Idoc internazionale, Oct-Dec. 4/98). One wonders why UNDP, which spends such large amounts of money in publishing this report, is unaware of the research and results that contradict its conclusions. globalisation is spurred by the need to obtain resources from poor countries at cheap prices and thereby create furtherinequalities between those who have and those who can not fight back. It is, in this sense, an imperialistic or neo-colonial process. No amount of painting a human face can change this basic reality. According to Einstein, insanity is to follow the same course and expect opposite outcomes. The only question is: can UNDP and the elite that use this Report for promoting globalizing policies, recognize the reality of exploitation, this ;Report's role in legitimizing such exploitation, and Einstein's concept of insanitity? develop close relationships, become moreself-aware, or contribute to the community." (Alfie Kohn, "In Pursuit of Affluence, at a High Price" The New York Times, February 2, 1999). In a major 1993 article in Journal of Personality and Social Psychology. Tim Kasser and Richard Ryan talk about the dark side of the American Dream.

Two, new research is now providing important evidence that health and risk for disease depend more on "relative" instead of "absolute" income. Social class, measurednot only by income but also by education and other indicators of social status, predicts health far more effectively than even genetics, exposures to carcinogens and smoking. Most of the social status indicators generally, and certainly among the market oriented societies, are directly correlated with material wealth. This research therefore shows that a wide variety of illnesses, including cardiovascular disease, diabetes, arthritis, infant mortality, many infectious diseases and some types of cancer, varies with relative wealth or poverty. The higher one is on the social ladder, the lower the risk of such diseases. It is not difficult to explain these conclusions. After all we are social human beings and relative status produces among us all sorts of stress and poisonous emissions through envy, anger, etc. We all feel good in families, communities and neighborhoods where we have a sense of belonging. That is why Gandhiji pleaded so much for swadeshi and village development. "If relative standing in thecommunity is what matters most in protecting public health, then the modern world has been headed in the wrong direction for at least 20 years. Inequality has been increasing for 20 years, and not by accident. Most households in the US have lower net worth than they did in 1983, and the wealthy few are far wealthier than they were in 1983. Between 1983 and 1995, the inflation-adjusted net worth of the top 1 per cent of Americans swelled by 17 per cent while the bottom 40 per cent of households lost 80 per cent. In other words, the gap between the rich and the rest of us has widened. It is this widening gap that gives rise to disease, research shows." (Erica Goode, "For Good Health, It Helps to be Rich and Important," New York Times. June 1, 1999, pgs D1, D9.)

To be concluded

The author is a professor of economics at the Rensselaer Polytechnic Institute, New York

Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.


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