Poverty Governance
An excerpt from McMichael,
The Globalization Project in Practice:
"Structural adjustment policies (SAPs) spawned in the 1980s preceded the universal adoption of liberalization policies through the WTO from the mid 1990s. But the international financial institutions (IFIs), recognizing that SAPs increased the poor's vulnerability, were compelled to create a Social Emergency Fund (World Bank) and a new Compensatory and Contingency Financing Facility (IMF) in 1998 to target those who fell through the cracks. In the 1990s, the IFIs evolved "humanizing" global policies, starting with the Heavily Indebted Poor Countries (HIPC) Initiative of 1996, to provide exceptional assistance to countries with unsustainable debt burdens. The IFI's goal was to stave off a legitimacy crisis by elaborating "governance" mechanisms that continue to this day as poverty elimination remains unfulfilled. And legitimacy is crucial, since both institutions depend increasingly on loan repayment by borrowing from countries to bankroll their operations, as northern countries have significantly reduced their contributions.
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And so, in order to secure legitimacy, they had to democratize the SAPs which strongly encouraged them to take ownership of the formation and implementation of any policies put forth. Then, in 1999 the "civic society revolution" was pitched by the bank director as he wanted to base the development of this project on inclusion and participation of all parties. It was meant to bring civil society together as one, including local competition, NGOs, the private sector, and the poor residents themselves. This unification was meant to "foster trust and sustainability" between all parties of society.
Voices of the Poor project was a widespread survey taken by 60,000 poor residents in 50 different countries who were dissatisfied with the corrupted system in place and showed greater interest for the involvement of the World Bank. It started out as a simple legitimacy test, it ended up revealing that the HIPC-eligible country debt had quadrupled from 1996-99. From this the Poverty Reduction Strategy Papers (PRSPs) were born; plans that allowed states to "author their own development plans, subject to IFI approval, on which loans, debt rescheduling, and debt forgiveness can be made." It was basically their way to handle the current crisis at hands and the World Bank and IMF described the attempt as "a new approach to the challenge of reducing poverty in low-income countries based on country-owned PRSPs."
Poverty Governance enhances institutional legitimacy at the same time as it subjects societies to the market calculus. By encouraging and allowing market access, they reconstruct the state-civl society relationship by complementing/compromising the state's authority with the authority of
civil society. Conditionality is then secured by using budget monitoring, so-called, and establishing a surveillance which "includes extending microloans through NGO intermediates to the poor."The intension is to, with this microlending, redirect existing social capital networks into entrepreneurial activities.
Outsourcing
"Outsourcing relocates goods and services production as a cost-reduction strategy and a means to increase operational flexibility of an organization." This would include offshoring if production shifts overseas. There are two reasons Outsourcing has become prominent and a significant part of Industrial Capitalism:
- The hyper mobility of capital in an era of deregulation and expanding access to cheap and flexible labor.
- The privatization of states.
Under neoliberalism, in addition to corporate outsourcing, governments outsource service contracts to reduce public expenditure and/or privilege the private sector.
For Example:
When the South African government outsourced Telkom, the state telephone company, in 2003, it completed the privatization of this essential service, which already had increased tariffs for the poor households while rates for rich families and firms were reduced. They ended up cutting 80% of new land lines because the poor subscribers couldn't afford the rise in costs.
This illustrates how outsourcing not only forces people deeper into poverty than they currently are but also cuts off the small luxuries they can afford, if any. Industrial capitalism was another cause of poverty, as they forced native residents off their land. In modern society we label people as poor if they have no land or property. However, before the industrial revolution those were the same people who had learned to live off the land and survive from Mother Nature's provisions. They had respect for the land and fostered a strong relationship with their surroundings and environment. Now a days we wouldn't be able to live off the land if our lives depended on it. We have grown alien to it and therefore would become impoverished if our technology and industries didn't exist. The entire system and society would be reversed and those impoverished would be rich off the land that they are so close to. So we must ask the question who is really poor and who really suffers more? We don't have a tiny sliver of our connection to nature left, so we are the ones who are truly lacking.
Displacement:
The continually expanding global economy has put many people out of the job rather creating jobs for the unemployed. Since 1973, unemployment in the global North has risen from 10 to 50 million. This is the dilemma where outsourcing of work to other areas eliminates stable jobs for local residents. Around the world there is a constant theme of displacement in developing areas; where the SAP mandates the dismantling of ISI sectors and the privatization of public enterprises, as well as the common resettlement due to infrastructure projects. For an applicable example: about 1.2 million peasants were resettled and displacement due to the development of the Three Gorges Dam project. The dumping of cheap food, land concentration, and decrease of farm subsidies are other factors that input equal affects on poverty numbers.
"Displacement begins with depeasantization, even though agriculture is the main source of food and income for the majority of the world's poor." Migrant labor is becoming increasingly popular in the global economy. As people are forced out of their current areas they seek different futures in places geographically opposite than their current situation, places that can hopefully offer them more. The economic and environmental refugees in the early twenty-first century was estimated at about 175 million people that were living as expatriate laborers around the world due to displacement and poverty. An excerpt from McMichael's
The Globalization Project in Practice (Ch. 6) reads:
In restless despair, the hopeless masses of the periphery will witness the spectacle of another hemisphere's growth. Particularly in those regions of the South that are geographically contiguous and culturally linked to the North---places such as Mexico, Central America, or North Africa---millions of people will be tempted and enraged by the constant stimulation of wants that can't be satisfied...With no future of their own in an age of air travel and telecommunication, the terminally impoverished will look for one in the North...The movement of peoples has already begun; only the scale will grow: Turks in Berlin, Moroccans in Madrid, Indians in London, Mexicans in Los Angeles, Puerto Ricans and Haitians in New York, Vietnamese in Hong Kong.
And so, this illustrates that when native peoples are forced out of the land they learned to live on and resettle elsewhere, it gives them no option that to seek a future somewhere that can provide for their families and offer them jobs and enough to get by on. Our global economy was suppose to help those in need of it most but it failed and is turning it's back on them forcing them deeper and deeper into an unescapable poverty labyrinth.
Works Cited:
The Globalization Project in Practice (cite) Development and Social Change
https://prezi.com/sgj2_rutofm6/philip-mcmichael/?utm_campaign=share&utm_medium=copy -Leo's Chapter Prezi
