Resolved: On balance, economic globalization benefits worldwide poverty reduction
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Let's get this started! Good luck to Con
The most significant challenge for developed countries is the large number of unskilled-jobs that have been exported. In Europe a bit less than the US, since said exports went to Eastern-Europe countries that have become members of the EU.
Which does not mean that the EU is off the hook. There still exists a daunting challenge amongst its founding nations who have significant levels of unemployment, most of which is located amongst unskilled workers, and the young who (though skilled) cannot find jobs due economic factors.
Too often when considering the EU and the US, we think of both in equivalent terms. Both have similar socioeconomic contexts (though the EU is almost double the population of the US). Both have long-standing trading ties, which link companies in tight cooperation as well as competition amongst multinationals. And yet both are remarkably different economically.
Despite these factors, whereas the US has significantly reduced its unemployment level (down from 10% at its height and around 5.5% today), the EU has not had quite the same success. It's unemployment rate is a bit less than double that of the US at 9.6%. For Europe to reduce its rates further it must most certainly stimulate growth. But how?
The conventional wisdom of employing Keynesian Stimulus Spending is deemed by many as not possible with the high debt-levels of some EU-countries. (Remember, the Maastricht Treaty requires national debt to be maintained at most 3% of GDP. ) Without Stimulus Spending, the Central Bank is reduced to Quantitative Easing to nudge banks to offer easier lending conditions. Which may or may not work.
Efforts should be made to forgive national-debt exceeding Maastricht levels for at least the next 3 years, thus allowing more Stimulus Spending in the countries. This is likely not to please Germany, however, that has been against breaches of the Maastricht rules.
The present situation therefore does not augur well for the EU, and therefore there is a tendency to seek more growth from external trade (beyond the EU and into the Globalized Economy). We can only hope this strategy works - because it must ...
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Katherine Barbieri, University of South Carolina “Economic Globalization and Civil
"How large is the effect of globalization in reducing the risk of civil war presence? To answer this question, we estimate how much the probability that a state will experience civil war would change if it moved from the average level of some attribute of globalization to one standard deviation above average, holding all other variables at their mean values. We find that states
with high Trade are about 28% less likely to experience War than those with average Trade;
LDCs with high Trade are 29% less likely. States with high FDI are 14% less likely to experience War than those with average FDI (17% for LDC). High FPI reduces the likelihood of War by 29% (27% for LDCs) compared to the average level of FPI. For LDCs with high Internet, the likelihood of War is 52% less than with average Internet. 2"
Contention 2- Technology Advances
Globalization creates the sharing and importing of new technologies that greatly affect countries.
According to PRABHU PINGALI AND TERRI RANEY Agricultural and Development Economics Division, Food and Agriculture Organization of the United Nations,
"The Green Revolution was a large increase in crop production in developing countries achieved by the use of fertilizers, pesticides, and high-yield crop varieties.
Over the past 40 years, much of the increase in agricultural output has come from an increase in yield per hectare rather than an expansion of area under cultivation. For instance, FAOSTAT data indicate that for all developing countries wheat yield rose by 208% from 1960 to 2000; rice yield rose 109%; maize yield rose 157%; potato yield rose 78%; and cassava yield rose 36% (FAO 2004b).
The Green Revolution led to huge increases in the world food supply. This impact has alleviated hunger in many developing countries and has substantially reduced poverty.
According toJulie B. Milstien, Miloud Kaddar and Marie Paule Kieny, Center for Vaccine Development, Department of Geographic Medicine, at the University of Maryland School of Medicine
The eradication of smallpox, the success of the polio eradication initiative in reducing polio’s global incidence by 99.9 percent (350,000 cases per year in 1998 to fewer than 800 in 2002), the achievements of the Expanded Programme on Immunization, and the recent 39 percent decrease in the number of measles deaths worldwide all illustrate the benefits of vaccination. Immunization against vaccine-preventable diseases prevents nearly three million deaths per year, according to the UN."Economic globalization has allowed countries to share technological advances, saving lives.
Contention 3: Globalization increases Wages
Subpoint A- Direct Income
Salvatore and Campano, Fordham University Economics Professors, 2012
Dominick and Fred, “Globalization, Growth and Poverty”, Global Economy Journal, Volume 12, Issue 4, Article 5, 2012, CD-Scott
"Tables 3a, b, c summarize the changes in the three measures of central tendency for all developing countries, for globalizers and for non-globalizers.
Note that the means in Tables 3a ,b, and c are the means estimated by the model and are slightly different than those shown in Table 1. The models indicate that over the period, the poorer populations in developing countries increased their incomes by more than 4 times around the mode, 3.3 times around the median, but only doubled around the mean. This is a much better situation than having high growth around the mean and low growth around the mode, but when we disaggregate the developing countries into gobalizers and non-globalizers we see that for the globalizers the measures of central tendency shifted far more to the right than for non-globalizers. In 25 years the mode of the non-globalizers increased only slightly from $150 to $175, whereas the mode on the globalizers increased by 9.8 times. One possible contributing factor that might explain the better performance of globalizers is that they receive more Foreign Direct Investment than non-globalizers. Mariam Khawar (2005) has found a large positive relationship between FDI and economic growth, and that could account for a good part of the gains made by the globalizers.
The countries included in this study had 2.9 billion out of the 3.7 billion people living in the developing countries in 1980 and 4.6 billion out of the 5.5 billion people in developing countries in 2005. We see from Table 1a that the per capita income of our sample of developing countries almost doubled (1.9 times) over the 1980-2005 period while per capita income in the developed countries in 2005 was 1.6 times that in 1980. More importantly, the percentage of people living on less than $300 a year was sharply reduced from 60.3% to 9.6% for the developingcountry sample. This is the group which is generally considered as living in abject poverty. However, the next income class, namely those having an income between $300 and $500, has a larger percentage in 2005 than in 1980. This has become the dominant income class with the highest concentration of people, roughly 1.1 billion people from the sample or about ¼ of the total population of developing countries. While this is certainly better than having the highest concentration of developing country people below $300 per year, as in 1980, it is still a very low income. Furthermore, there are still almost 10% of the developing country people below the $300 per year income level. On the other hand, the percentage of developing country people achieving incomes above $2,000 a year more than doubled by 2005. In fact, all the higher income brackets have higher percentages of developing country people in 2005 than in 1980.
In Tables 1b and 1c we separate the 24 developing countries that globalized from the 39 non-globalizing developing countries, as defined by Dollar and Gray of the World Bank (2001).1 This added-up to about 3.35 billion people in 2005. From these tables we see that in 1980 the globalizers had a lower per capita income than the non-globalizers, but in 2005 their income per capita had surpassed that of the non-globalizers. Their average annual growth rate of per capita income over the 25 years was 3.5%, whereas, the non-globalizers only grew at 0.7 %. The globalizers reduced the percentage of their population with less than $300 per annum from 66% in 1980 to 4.1% in 2005. That is, about 1.35 billion people moved up and out of that category. The non-globalizers also reduced the percentage of people below $300 per annum, but not nearly as much. In 2005, they still had 24.4% of their population in that category. Furthermore, the absolute number of non-globalizers still left below $300 per year in 2005 was over 301 million, while for the globalizers it was down to 137.8 million. In terms of mean incomes, the globalizers started the period in 1980 with a mean income of $669 per person, and the non-globalizers with a higher mean income of $929, but by 2005 the globalizers had surpassed the non-globalizers with $1,577 as compared to $1,165. "
Subpoint B- Remittances
Remittances are an important asset to migrating workers and families
According to David Andrew Singer , Assistant Professor ,Department of Political Science Massachusetts Institute of Technology
"Remittances—which arise when migrant workers send money back home to their families—constitute a steady stream of foreign exchange that helps to alleviate poverty and stimulate economic growth in migrants’ countries of origin. Remittances are an important lifeline for some of the poorest countries in the world, but also constitute a sizable share of GDP for emergingmarket countries. In countries such as El Salvador, Haiti, Honduras, and Jordan, inflows of remittances exceed 15 percent of GDP. In 2004, a total of 34 developing countries had remittances inflows greater than 5 percent of GDP. The World Bank estimates that total recorded flows of remittances reached $167 billion in 2005; this is a staggering sum that dwarfs other financial sources, such as official development assistance, bank lending, and private investment."
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