More with Less: Disasters in an Era of Diminishing Resources

Globalization, Growth, Poverty,Governance, and Humanitarian Assistance

| 11 | This chapter examines humanitarian assistance to populations af- flicted by major natural and man-made disasters in the broader context of the evolution of world poverty in our rapidly globalizing world. Although many natural disasters can and do occur in rich and poor countries alike, they have been, and are generally, more common in the latter than the former, and it is in poor countries that they inflict the most suffering—thus creating the greatest need for humanitarian assistance . When a rich country faces a natural disaster (as for example, Japan from the earthquake and tsunami in 2011), it generally has adequate resources to come to the rescue of the afflicted populations. When the disaster occurs in a poor country on the other hand, it usually leads to a greater human tragedy and much greater suffering because the poor country usually does not have the resources or the ability to deal with the crisis, especially if it is man-made, as in the case of civil wars or other forms of internal strife. It is in these cases that humanitarian assistance is most needed and urgent. In short, poor countries seem more prone to natural, but especially to man-made, disasters, and are much less prepared to deal with them, thus necessitating large-scale outside assistance. Rapid growth and development is crucial to reduce the occurrence of man-made disasters and to make the nation better prepared and able to deal with them, as well as with natural disasters when they occur. Both of these goals can be achieved if a poor country grows and develops rapidly and reduces Globalization, Growth, Poverty, Governance, and Humanitarian Assistance DOMINICK SALVATORE 12 | Dominick Salvatore its level of poverty. This chapter examines humanitarian assistance in this broader context. I will first examine how globalization has affected growth and development during the most recent period of rapid globalization that started in the early 1980s, and how growth and development in turn has affected and affects the level and extent of poverty in developing countries. Then, I will examine what the United Nations (UN), the World Bank, the International Monetary Fund, and other international aid organizations, as well as rich nations individually, can do to facilitate and encourage more rapid growth and development. I will also focus on how world governance can be changed to allow a poor country to receive a greater share of the benefits emanating from rapid globalization as well as to empower poor people everywhere so as to reduce the occurrence of man-made disasters and to be better able to deal with them and with natural disasters when they do occur. The Growth Report In 2008, the high-powered Commission on Growth and Development (CGD) published The Growth Report, which provided an in-depth analysis of the common characteristics of the thirteen high-growth economies during the postwar period. The high-growth countries are defined as those that achieved an average real growth rate of at least 7 percent per year over a period of at least twenty-five years from 1950 to 2005.1 Although the CGD could not find any unique blueprint for ensuring high growth, it found that the high-growth countries shared five common characteristics. They all: 1. fully “exploited” the world economy; 2. maintained macroeconomic stability; 3. mustered high rates of savings and investment; Globalization, Growth, Poverty, Governance, and Humanitarian Assistance | 13 4. let markets allocate resources; 5. had committed, credible and capable governments. While not specifically mentioned by name, globalization and international competitiveness seem to be essential characteristics of a high-growth strategy. Characteristic 1 (fully “exploited” the world economy) means globalization and characteristic 4 (let markets allocate resources) is an essential ingredient of international competitiveness and growth. Globalization of Production and Labor Markets There is a strong trend toward globalization in production and in labor markets in the world economy today. For those firms and nations that do take advantage of this trend the results are increased efficiency, competitiveness, and growth. Global corporations play a crucial role in the process of globalization. These are companies that are run by an international team of managers, have research and production facilities in many countries, use parts and components from the cheapest sources around the world, sell their products globally, and are owned by stockholders throughout the world who finance their operations. More and more corporations today operate...