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Globalising poverty, globalising hunger The idea of globalisation is sold to us by the developed world as a panacea for world poverty. In fact it is making Bangladesh’s rich better off as it pushes our poorest over the edge of impoverishment. Tanim Ahmed explains how we were sold lies photo by GMB Akash Had she taken up employment at a garment factory for a monthly wage of Tk 930—the going rate for an unskilled worker—Jarina would have been the classic example. From being a skilled agricultural labour, she would have joined the ranks of ‘unskilled industrial labour’ through a phase of unemployment or seasonal agricultural employment.    That is the trend, according to a recent report by the United Nations Conference on Trade and Development, which shows that farm employment in Bangladesh dropped from 65 per cent of the labour force to 54 per cent between 1990 and 2002. Between 1990 and 2004, agriculture’s contribution to the GDP dropped from 30 per cent to 21 per cent.    This would imply that small farmers are gradually becoming further marginalised and these people are heading towards the cities to look for work. They call it rural-urban migration. The UN agency’s report on the least developed countries also predicts increased international migration from Bangladesh.    Jarina, however, still lives at Char Jatrapur. Her tiny hut on the bank of river Dudh Kumar is about 25km from Kurigram district town where the nearest hospital is located. The trip would cost her at least a fourth of one day’s wage that she might get during the harvest season when rural wages tend to rise. Her father and his father before him were farmers with reasonably large tracts of farmland. Thus Jarina was by default a farmhand, and a skilled one at that. Her father’s lands were lost to river erosion while her in-laws, who weren’t as well off, lost out to the economies of scale and market forces.    So, Jarina is now reduced to working for others, a ‘landless farm labour’ as she would be called, but only during the harvest seasons when there is considerable work for women in the homesteads. Her husband used to have some arable land but he had to sell it off many years ago. Several consecutive harvests had been damaged and Jarina’s ageing husband was up to his ears in debt.    Jarina, however, is indirectly party to urban migration. She sent off two of her sons, one is 15 and the other 13, to Dhaka where they would find work as domestic aid an acquaintance had promised. Although she does not know their whereabouts, Jarina is at least content that they don’t starve every other day.    Reena is one among the thousands of garment workers who swarm a small stretch of the cantonment connecting Mirpur with Banani. She lives in Mirpur and walks about two kilometres to her work place near the Kakoli crossing. Reena came to Dhaka recently with a cousin who is also a garment worker. Back at her village near Jessore, she said her father could not feed her six siblings.    Having no skills or experience she started work for just about Tk 1,000 a month. That is barely 50 American cents for a 9-hour workday. For the time being, Reena has no complaints. Her workplace is apparently dimly lit, has congested stairs and has still not started the practice of a three-month maternity leave. At least it is better than it was back home. No matter how hard it is, she can get by, Reena insists. She has started living with her cousin two months ago and in just about a few more months she hopes to be able to send home some money.    Reena’s cousin had started work at a garment factory almost a year ago for similar wages. Minimum wages of the garment workers have not increased for more than 10 years. But Reena is not that concerned.    At the other end of the spectrum, the immediate past commerce minister, Altaf Hossain Chowdhury, declared in December last year that Bangladesh could export everything—from frog legs to aeroplanes—explaining his achievements at the ministerial summit of the World Trade Organisation that he had just returned from.    The 150-member trade organisation strives to attain gradually higher levels of free global trade. Besides goods, the trade forum also focuses on liberalising services and ensuring intellectual property rights. Currently the negotiations hinge on reduction of farm subsidies and industrial tariffs since these distort world prices and hinder free trade, which by neoliberal logic penalises those naturally efficient in similar modes of livelihood.    The trade forum, besides international financial institutions, champions open market economy and gradual liberalisation of trade and commerce where it envisions a world without borders, where capital will have full mobility. The vision also implies that commercial interests will rule supreme in such a globalised world.    The current round of the multilateral trade organisation is dubbed as the ‘Doha Development Round’—more of a rubber stamp to placate developing and least developed countries than a sincere effort to help the poorest members of the forum develop.    Several studies—by the World Bank, European Union, Carnegie Endowment for International Peace and the Food and Agricultural Organisation—show that a likely Doha agreement would result in minimal increase in the volume of global trade, but the bulk of it would go to developed countries. The rest of the gains, shared among the developing countries would be distributed in a highly uneven manner. While studies vary in projecting the volume in terms of money, each observe that Bangladesh is certain to face net losses from any Doha round agreement.    As is typical of the poorest group of countries around the world, Bangladesh’s export basket is extremely small. As a matter of fact, Bangladesh has overwhelming dependence on apparels export for foreign currency earnings. Another point to note is that service sectors dominate over 70 per cent trade of the developed countries. But developing countries with a weaker base in services typically concentrate on manufactured goods and farm products.    Increasing global competition leads to gradual reduction of prices of these products originating from the developing world while those of the developed countries seldom face such deteriorating terms of trade in the international market. Consequently the developing countries use up increasingly higher amount of resources to attain the same levels of exports in money terms.    All the while that global trade volume increases, a larger portion is taken up by products that few developed countries produce. As a result the least developed countries combined, control less than half a per cent of global trade currently. Needless to say, global income is grossly unequal in distribution as is the situation within most poor countries. It is even more alarming that the inequality within countries, and between countries is growing with little signs of levelling out. Apparently 70 per cent of this global inequality is explained by the difference of income between countries than within them, according to another UN report, the World Economic and Social Survey of 2006.    This UN report’s observation clearly implies that most of the inequality, not just an indication of economic disparity but also injustice to fellow human beings, could be eliminated by changing the global economic order where the poorer countries have little sway.    It asserts that integration into the global economy—a phenomenon more pronounced between 1980 and 2000 than any other period—saw import surges, contraction and deindustrialisation in certain economies. ‘Many economies where trade liberalisation was implemented rapidly (through big bang) or prematurely have witnessed, contrary to the outcomes anticipated by the promoters of trade liberalisation, a process of deindustrialisation and a marked increase of imports, but not necessarily faster growth,’ the report observes.    The report adds that several of these economies that had witnessed strong import growth in the 1980s also experienced a severe import contraction in the 1990s owing to foreign exchange constraints, the debt crisis and resulting balance of payments adjustment.    The report stresses on the need for protectionist policies to encourage infant industries and quotes Robert Wade as saying ‘Protection has to be made part of a larger industrial strategy to nurture the capabilities of domestic firms and raise the rate of domestic investment, always in the context of a private enterprise, market-based economy.’    Trade liberalisation also led to deindustrialisation that was ‘particularly noticeable in manufacturing sectors that provided intermediary inputs and components, thus contributing to the delinking of export activities from local industry and reducing the potential positive impact of exports on the overall growth of the economy’.    As for the developed countries that now push for fast liberalisation promising rich returns, the report points out that today’s developed countries have used trade liberalisation selectively and in combination with other policy measures. ‘Almost all of them did not practise free trade while promoting their own industrialisation or, if they were late industrialisers, when catching up with the lead economies of their time.’    A global free trade regime without price distortions—tariffs and subsidies for instance—would lead to everyone’s development, particularly that of the poor countries. The currently running Doha round apparently envisions such an end.    Its advocates claim that free trade invariably leads to increased competition across the world. Since such a regime is also driven by the sole motivation to make profits, corporate commerce predicates the exploitation of input factors. The most vulnerable and exploitable input factor in the garment sector in the developing world are the workers, more so because most of them are women. It is only natural then, that the minimum wage of garment workers has not increased in more than a decade. Even today garments factory owners refuse to pay a worker above Tk 1,300 per month.    When the Reenas of Bangladesh cannot be exploited anymore, and that is quite a few years hence, factories will relocate to other places where labour is still abundant—Sub Saharan Africa perhaps. And Bangladesh will have to switch to high end apparel products or niche markets instead of low end voluminous production.    As propounded by these surveys and reports, domestic policies of poor countries are also important to reduce inequality and improve levels of human development. Foreign direct investment is dubbed as one of the most effective means to attain such goals. But in order to attract higher levels of foreign investment, encouraged by lending agencies and organisations, poor countries have embraced wholesale liberalisation with few performance requirement provisions.    In Bangladesh, for instance, there are few such requirements. Foreign investors are allowed to repatriate all their profits without sharing a farthing. They are not required to enlist with the stock market either. Any foreign investor is allowed to import all raw materials for production and building factories duty free. Neither are they obliged to share their technology with local companies.    As a result, there is little benefit to the general public from whatever foreign investment comes in. A recent newspaper report said foreign investors remitted 81 per cent of their investment between 1996 and 2005. When debt servicing is taken into account foreign currency expenditure outstrips earnings by far.    But any performance requirement imposed now, which would be considered a reversal of liberalisation, would be frowned upon by the lending agencies. They would also frown upon government spending in public utilities and essential public services. Instead, the government would be advised to gradually leave these services to private hands. Health delivery to water distribution, the government should not be involved in any of these operations.    The government should rather exert its efforts in regulating the private operators, the lenders would suggest knowing fully well that the governments of poor countries seldom possess such a capacity. Of course these suggestions, however meekly put, are tantamount to directives since they are often set as conditions for the next instalment of loan or credit.    It was in a similar line of liberalisation that the government rid itself of supplying agricultural inputs. Fertiliser and irrigation, two crucial inputs are now entirely in the hands of private operators. They have also been allowed to operate in seed distribution alongside the government agencies.    Although the government continues to provide subsidies for fertilisers and electricity rebates for irrigation, farmers do not benefit much from them. According to the agriculture minister himself, the subsidies for electricity are all taken by contractors of the Rural Electrification Board. He said he had notified the finance ministry in writing and asked that the 25 per cent electricity rebate be withdrawn. As for the fertilisers, prices appreciate by 40 per cent between the factory gate or the import stage and the farmer. It has been reported numerous times in the media that these subsidies do not benefit the farmers, only the importers, manufacturers and some of the middlemen.    Despite repeated calls from the civil society and a number of organisations working on agriculture, the government has refrained from intervening in the market by any other means. The small loan system for farmers is so riddled with corruption that for a Tk 5,000 loan they have to pay up to Tk 2,000 in bribes to have the loan sanctioned.    Almost all small farmers are thus forced to borrow at the beginning of a season to procure inputs with the hope of a good yield. Come harvest season, they are forced to sell off their produce quickly, often at nominal rates that do not even cover their costs. These produce, however, register a marked increase—500 per cent—between the farmer and the market. Once again the profits are raked in by the middlemen. One would not expect it to be much different in a free market where capital dominates. There is no place for Jarina to survive here or gradually attain higher standards of living.    Most of the rural populace are deprived of public services, especially health and education. Both of these could have had a profound impact in reducing the widening inequality and helped the poor graduate to higher standards of living. Jarina’s sons had never been to school and would in all likelihood end up doing menial labour all their lives. Jarina has not had much education herself.    The standard of health services for the poor is also pathetic. Most of the rural populace living in remote areas cannot even access what little service is available anyway. They end up spending substantial amounts of money for merely visiting the faraway health centres. For Jarina, a round trip to the nearest public health facility, at the Kurigram district town, costs a whole day’s wage during the agricultural lean season. Further expenditure on medicine and laboratory tests is enough to sink a family into debt for quite a few years. Any serious illness, according to a number of documents and surveys, is enough to spell doom for a family for an entire generation.    Thus with little or no state support, it is impossible for poor farmers to become sustainable. State policies are centrally responsible for this gradual marginalisation. Although the international financial institutions play a significant role in ensuring that the state removes itself from providing services and hand them over to private operators, the state can still make some changes with sincere efforts. Given that agriculture generates the highest employment, more than two crore people, and provides the livelihood of more than 60 per cent of the entire population, the farm sector becomes the most obvious vehicle to reduce poverty and economic inequality.    The poorest 30 per cent of the population of Bangladesh saw their share of the national income rise from 10.17 per cent in 1995 to 10.60 per cent 2000. This can principally be attributed to the fact that the Awami League government had undertaken serious efforts in the agriculture sector during its regime between 1996 and 2001. Since agriculture is still the means of livelihood of several crore people in Bangladesh, employing over two crore directly, it is an obvious vehicle to improve the lot of the general rural populace.    Considering the labour intensity of agriculture and its traditional al predominance in the domestic economy, the sector becomes an obvious vehicle for an amelioration of the plight of the general populace, eliminate poverty and reduce inequality.    Although the government’s dominant role in the sector becomes imperative in light of the potential welfare of poor masses, the state is surprisingly withdrawing itself. Subsistence farmers constituting a major portion of the agricultural community, find it increasingly daunting simply to cover their costs and keep their heads above water. This has reduced subsistence farming, generally held as a significant actor in agrarian economies, especially in the developing world. As result it becomes impossible for small farmers to sustain their generational vocation. A study conducted by Unnayan Onneshan, a research organisation, last year showed that farmers incurred a loss of Tk 9,000 crore in the fiscal year preceding the study. The small farmers bore the brunt of those losses.    As for the garments sector, it is not only the highest export earner for the country, but Bangladesh is also among the top five apparel exporters to the US in terms of volume and among the top 10 in terms of money earned. It should then be quite surprising that the workers of this sector should be deprived of even their basic rights and privileges. From the perspective of globalisation, Bangladesh’s progress, with a thriving garment sector and a booming mobile telephony sector, besides the substantial inflow of foreign direct investment can only be said to be promising. But the trends are only considered from a macro level and foreign direct investment or substantial exports are automatically presumed to be beneficial towards eradicating poverty.    It is however up to the countries themselves to ensure that domestic policies are conducive to poverty eradication. These policies and regulations can ensure whether economic growth is top heavy or is widely distributed. Even a perfunctory glance of official records will show that whatever the growth, its benefits have been largely restricted to the richest sections while exploitation and deprivation of the poorer sections continue.    Critics go as far as to say that foreign investment in Bangladesh only contributes towards benefiting the urban rich and does not translate into benefits for the general population. While the garment workers have begun a movement for better pay and other due privileges despite stiff opposition from their factory owners, and seem unlikely to succeed in having most of their legitimate demands met, the Jarinas of Bangladesh are resigned to withering away from one generation to the next. As it stands, this is a looming inevitability.