Multinational Monitor

JUL/AUG 2003
VOL 24 No. 7


Grotesque Inequality: Corporate Globalization and the Global Gap Between Rich and Poor
by Robert Weissman

Left Behind: Domestic Inequalities and the Fate of the Poor
by United Nations Development Program

The Hogs of Rosebud
by Winona LaDuke


Inequality in the World Economy, By the Numbers
an interview with Branko Milanovic

Losing the Farm: How Corporate Globalization Pushes Millions Off the Land and Into Desperation
an interview with Anuradha Mittal


Behind the Lines

Patents, Profits, Power and Poverty

The Front
For Wealth, Not Health - A Light Homicide Charge

The Lawrence Summers Memorial Award

Book Notes

Names In the News


Left Behind: Domestic Inequalities and the Fate of the Poor

By the United Nations Development Program

Even for countries that on average have made good progress towards the Millennium Development Goals designed to cut in half the worst manifestations of global poverty, domestic inequality often runs high. In countries throughout the world, both where economies are growing and where they are stagnant, there are plentiful examples of increasing or lingering gaps -- where entire areas or groups (or both) have been left behind in one or more spheres of development.

China: Fast Progress, Driven by the Coastland

China is among the few countries performing well over-all on the indicators for the Millennium Development Goals. Yet in recent decades China has shown large disparities in economic and social outcomes between coastal and inland regions -- a trend that also reflects cleavages between urban and rural areas.

Coastal areas have consistently experienced the fastest economic growth: between 1978 and 1998 per capita incomes increased by an astonishing 11 percent a year. Ignoring inflation, that means that $100 in 1978 would have jumped to $800 just 20 years later. Moreover, the performance of coastal areas sped up in the 1990s, with annual growth averaging 13 percent -- five times the level in China's slowest-growing northwestern regions, which are far from the commercially thriving coast. As a result, the bulk of national income is concentrated in metropolitan and coastal regions. The wealth of coastal areas -- with their large ports and harbor cities -- owes much to exports.

In 1999, China's three richest metropolises -- Shanghai, Beijing and Tianjin -- stood at the top of the human development index (HDI, a United Nations Development Program measure of well-being that takes into account a wide range of factors not limited to per capita income) ranking. Those at the bottom were all Western provinces. Moreover, the poorest provinces have the highest inequality. Tibet had the lowest values for education attainment and life expectancy. In income, education and health, only some parts of China will achieve the Millennium Development Goals, leaving behind the vast inland areas -- and particularly the Western provinces.

Brazil: Leaving the North Behind?

Brazil has a long legacy of high inequalities. The richest 10 percent of households have 70 times the income of the poorest 10 percent. Over the past 10 years, illiteracy rates have been widening between the richest and poorest states.

And though poverty started to decline in the early 1990s, it did so unevenly -- and is not falling fast enough for Brazil to achieve the first Millennium Development Goal of halving poverty by 2015. At current rates of progress, the South is the only region expected to meet the goal. But the Northeast, the poorest region, has also reduced poverty dramatically, as have the Central and South-eastern regions.

The North is the only region that has seen poverty increase, rising from 36 percent in 1990 to 44 percent in 2001. (Data for the North are limited to urban areas.) Why are so many people being left behind when overall growth is good? The culprit is not a shortfall in average resources but persistently high inequality. Not only is the North seeing poverty increase, it is also lagging on the HDI -- unlike the wealthy, urban South (S“o Paulo, Rio de Janeiro and Rio Grande do Sul) and unlike the Northeast, which has seen substantial improvements in its HDI.

Mexico: development excluding the South
Since the early 1990s, Mexico's economic, social and political performance has been mixed at best, with its recovery from the debt crisis of the 1980s suffering a blow from the 1994-1995 financial crisis.

But as a whole, Mexico is on track to achieving most of the Millennium Development Goals. Poverty was lower in 2000 than in 1992, dropping from 15 percent to 13 percent (though in 1995 it jumped to 18 percent). The poorest areas are the South and Southeast. The wealth gap also got worse in the 1990s: by the end of the decade the top 10 percent of earners had 35 times the income of the bottom 10 percent, compared with 33 times in 1992. But other development indicators -- mainly for health, nutrition and education --improved in the 1990s.

While inequalities divide Mexican society along ethnic and social lines, the most notable gap is that which splits the South from the North, with the South lagging behind in nearly all of the Millennium Development Goals. Southern states are also mainly indigenous and rural, and their economies are largely agricultural and lack infrastructure. Because of poor performance in the South and progress in the North, this historical cleavage has persisted since Mexico's opening to international trade in the 1990s. The North and Northwest have tended to benefit, while distance from the U.S. border has excluded the South, from economic integration with Canada and the United States. In the Southern state of Chiapas, more than 30 percent of the population lives in extreme poverty, and episodes of violence are frequent -- as elsewhere in the South. Moreover, large numbers of people in the South are illiterate. This pattern also reflects gaps between male and female literacy rates, which are much deeper in the most illiterate states of the South.

The Philippines: Integrating Ethnic Minorities

The Philippines is highly fragmented economically and socially. Difficult topography and unfavorable climate make the Southeast more vulnerable to natural disasters than the milder Central and Northwest (metropolitan Manila) states.

Some areas contain large concentrations of minority populations: Moro secessionists in the Autonomous Region of Muslim Mindanao (ARMM) in the Southwest and Central Mindanao in the South and the indigenously dominated Cordillera Administrative Region in the North.

Large areas in these regions are lagging behind in many socio-economic indicators relative to the national average. The East Asian financial crisis in 1997, coupled with the El NiÒo weather phenomenon the following year, contributed to a resurgence in the poverty rate to 28 percent in 2000. This trend has not been uniform, with poverty increasing in the mountainous central areas of the Northern island of Luzon and the western areas of Mindanao in the South.

Regional disparities in income poverty remain wide, from a low of 12 percent in the Manila area to 74 percent in the ARMM. This is reflected in the uneven distribution of the HDI, reflecting closely the ethnic distribution of the population, with ethnic minority areas performing worse. Similarly heterogeneous performance appears when looking at other indicators, including child mortality rates, with the smallest improvements again recorded in the Mindanao area.

India: General Progress, Slower for Some

India, home to one in six of the world's people, has achieved great progress on most fronts. Poverty has been dramatically reduced and improvements made in education for both males and females. There has been tremendous improvement in gender literacy gaps, particularly in the poor Central states of Madhya Pradesh and, to some extent Rajasthan, Uttar Pradesh and Bihar.

Still, a number of areas appear to have been excluded from these trends, particularly along the Pakistani and Nepalese borders. Furthermore, gaps in literacy between low social classes and the rest of the population remain extremely high, particularly in the poorest states -- Rajasthan, Uttar Pradesh, Bihar -- and in Karnataka. Researchers have found that female literacy rates among members of scheduled tribes were as low as 7 percent in Rajasthan and 9 percent in Madhya Pradesh.

There are also grave concerns in health. Largely due to widespread undernutrition and poor infrastructure, mortality rates remain high in the poorest, rural, scheduled caste states, particularly among mothers and children. Between 1992/93 and 1997/98, infant mortality fell in all states except Madhya Pradesh and Rajasthan. Moreover, infant mortality rates are substantially higher in rural areas, particularly in Maharasthra and Andhra Pradesh. High immunization rates are still an almost exclusive characteristic of provinces in the South and Southwest. In numerous areas, particularly in the North and Northeast, less than one-third of children were immunized in 1999.

Guatemala: Progress on Gender and Ethnic Gaps

Since 1990, the pace towards the Millennium Development Goals in Guatemala has been slow and uneven. In recent years, shocks have included serious drought and lower world prices for coffee, the country's main export staple. In the 1990s, while many groups and areas experienced improvements in human development, outcomes in the North and Northwest were disappointing. These regions, where most indigenous Guatemalans live, had the highest extreme poverty in 2000. There appears to be some overlap between the discrimination facing these ethnic minorities and women. Maternal mortality is highest in the North and Northwest, suggesting weak health systems in rural areas with a prevalence of ethnic minorities and women.

Literacy rates illustrate another aspect of the problem. Women in the Northwest were the only group not to see the literacy rate improve. Discrimination by gender and by race occurs in the same areas and probably affects the same people: indigenous women. These trends are compounded by persistent inequalities, especially in land concentration, all of which may impede Guatemala's development. According to a recent study, land concentration increased between 1979 and 2000, hindering diversification and better distribution of property and risk.

But while in absolute terms the situation is worrisome, during the 1990s the greatest percentage reduction in extreme poverty occurred among indigenous households, from 32 percent to 26 percent. Income poverty also fell fast among female-headed households. While the income progress recorded in many of the indicators relevant to the Millennium Development Goals has been satisfactory, mal- nutrition (mainly due to droughts) has increased in the Northwest and particularly in the North -- overwhelmingly affecting rural indigenous populations and probably suggesting infrastructure deficiencies.

Mali: Leaving Women Behind

Mali has made important progress on many of the indicators for the Millennium Development Goals. Despite some variability, 1992-1999 saw overall development improve in each region. Still, in many important areas of development, too many women are suffering. In education, 40 of 100 men are literate -- and only 33 of 100 women. The Northern rural regions exemplify this national picture, particularly as a consequence of cultural attitudes towards women in rural areas.

Women are also disproportionately hit by HIV/AIDS. In 1992, the infection rate was about 3 percent. Female sex workers have the highest infection rates. The disease has contributed to the high maternal mortality ratio of about 580 deaths per 100,000 live births -- unchanged in the past five years.

Burkina Faso: Facing Drought and Disease

One of the world's poorest countries according to the human poverty index and GDP per capita, Burkina Faso presents sharp differences in development between its Eastern and Western regions. The East is dry, which complicates agricultural practices. The West is more humid, creating a climate suitable for cotton production.

Furthermore, poverty incidence is five times higher in rural areas (50 percent in rural areas in 1994 and 1998). Between 1993 and 1999, malnutrition increased in all provinces. Stunting increased from 29 percent in 1993 to 37 percent in 1999, with rural areas driving the trend. In the capital city of Ouagadougou, an estimated one-fifth of children suffer from malnutrition. In the rest of the country, one-third of children do.

The rural population has barely improved primary school enrollment rates. In 1994, this figure for rural girls was 22 percent, compared with 69 percent for urban girls. Four years later the figures had changed to 24 percent and 99 percent, indicating extremely slow progress in rural areas.

Russian Federation: Development Shocks and Gender Bias

The Russian Federation has undergone a profound transformation since its transition to a market economy. Moreover, two shocks in the 1990s undermined its development indicators. The first was HIV/AIDS, with the number of HIV-positive people reaching 178,000 in 2001. The disease has mainly affected people between the ages of 15 and 29 and those in urban areas (Moscow, Saint Petersburg, Sverdlovsk oblast).

The second shock was an increase in poverty and inequality between and within regions. In 2000, Moscow, Tatarstan and oil- and gas-producing Tyumenoblast were the only regions with HDI levels comparable to those of richer countries such as the Czech Republic, Hungary and Slovenia. At the other end of the spectrum were the republics of Siberia and the Far East, with HDI levels comparable to those of Gabon and Nicaragua.

Mirroring these differences between regions are gaps within regions. The three richest regions are also experiencing the sharpest polarizations of wealth and poverty. Poverty in Russia has increased in both urban and rural areas, particularly between 1997 and 1999, peaking at 57 percent in rural areas compared with 47 percent in urban areas. Poverty has affected different regions in different ways: economic instability in particular (such as the financial shocks in the late 1990s) appears to have exacerbated regional disparities in living standards, with less developed regions getting poorer faster.

The growth of poverty has hit elderly women and female-headed households particularly hard, illustrating a worrisome "feminization" of poverty in Russia. A driving force behind this trend is job instability and, even more, wage discrimination against women. In early 1999, the female-male wage ratio was 56 percent. At the end of that year, it was down to 52 percent, and in mid-2000 it reached 50 percent. Another study saw this ratio fall from 70 percent in 1998 to 63 percent in 2000. Furthermore, women's political representation was very low in the transition period. Gender gaps in education have stayed low, however -- close to their levels before the transition.

This article is excerpted from the UN Development Program’s Human Development Report 2003: Millennium Development Goals: A compact among nations to end human poverty. It is available on the web at <>.

About the Millennium Development Goals

Meeting at the United Nations in September 2000, countries of the world agreed on a set of “Millennium Development Goals” to work toward a world in which sustaining development and eliminating poverty would have the highest priority. The UN Development Program’s Human Development Report 2003 offers a snapshot of efforts to achieve the goals, and highlights how country policy, imbalances in the global economy and global inequalities are undermining achievement of the Millennium Development Goals.

1. Eradicate extreme poverty and hunger

Target: Halve, between 1990 and 2015, the proportion of people whose income is less than one dollar a day.
Target: Halve, between 1990 and 2015, the proportion of people who suffer from hunger.

2. Achieve universal primary education

Target: Ensure that, by 2015, children everywhere, boys and girls alike, will be able to complete a full course of primary schooling.

3. Promote gender equality and empower women

Target: Eliminate gender disparity in primary and secondary education, preferably by 2005, and to all levels of education no later than 2015.

4. Reduce Child Mortality

Target: Reduce by two thirds, between 1990 and 2015, the under-five mortality rate.

5. Improve maternal health

Target: Reduce by three quarters, between 1990 and 2015, the maternal mortality ratio.

6. Combat HIV/AIDS, malaria and other diseases

Target: Have halted by 2015 and begun to reverse the spread of HIV/AIDS.
Target: Have halted by 2015 and begun to reverse the incidence of malaria and other major diseases.

7. Ensure environmental sustainability

Target: Integrate the principles of sustainable development into country policies and programs and reverse the losses of environmental resources.
Target: Halve by 2015 the proportion of people without sustainable access to safe drinking water.
Target: Have achieved by 2020 a significant improvement in the lives of at least 100 million slum dwellers.

8. Develop a global partnership for development



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