Essential Leader

Globalization and Poverty

Is there a positive correlation between globalization and poverty? One of the guiding premises of Global Envision, where I have the priviledge to be a Director, is a recognition that “The immense forces of globalization are changing the lives of hundreds of millions of people.” Our guiding underlying assumption is that “The growth of economic globalization and free markets holds great promise for poor communities around the world.” (Guyer)

Several recent studies point to the notion that there is indeed a positive relationship between economic growth as a result of globalization and poverty reduction. A study by Shaohua Chen and Martin Ravallion, “Absolute Poverty Measures for the Developing World, 1981-2004,” published in March 2007, suggested that the percentage of people in the world who are absolutely poor is generally declining. But wait! How can that be? Everyone knows the number of poor in the world is rising. That too, is true. In an intriguing study published in 2002, Satya Chakravarty, Ravi Kanbu, and Diganta Mukherjee document this rise in absolute numbers of poor people as the world’s population continues to increase. But because of more and better access to markets and sources of income, the relative number of the world’s people who live below the international poverty line ($1 - $1.25 a day) has actually declined.

There are some interesting exceptions to this general rise in world income. Urban areas generally have a lower-than-average pace of poverty reduction while rural areas, which are home to three-quarters of the developing world’s poor, have a higher-than-average pace of poverty reduction. Why? Largely because the rural poor are moving to the cities (Chen and Ravallion). According to the World Bank, Sub-Saharan Africa, which has experienced little economic growth, has had little change in the number of people living in abject poverty (Soubbotina, 2000).

Conclusion? While the percentage of absolute poor is dropping, there is spotty success in reducing the total number of the poor. In some regions, like Sub-Saharan Africa, poverty continues to rise. One of the reasons why some areas are more successful than others in reducing the percentage of people living in absolute poverty is that globalization has allowed the poor to access more lucrative markets and given them more options for developing income sources.

Losing Trust

President Obama’s recent firing of General McChrystal raises some interesting questions about the role of trust. Having been a part of several battle staffs during my military career, I would suggest that these scenarios engender at least two levels of dialog. At the “public” level there is the dialog that I’m sure McChrystal would have preferred to see in the Rolling Stone article: What’s going on? Where are we going? What do we need to do to get the mission accomplished? There is almost a dance-like quality to the activity that it takes to smoothly coordinate the innumerable pieces of a highly fluid battle situation.  At the center, like the conductor in an orchestra, McChrystal and his key advisors would be focused quite intently on the business of the moment and largely ignorant, by choice, of anything that did not directly contribute to the focus of his attention. At the public level, the atmosphere of a professional, highly trained, highly motivated battle team that is working smoothly to make sense of the “sh*t storm” of information flowing into and out of the room is one that almost crackles with radiant energy.  Imagine sitting in a pressure cooker trying to string beads in a windstorm and you get the idea.

People under that kind of pressure need an outlet and that leads to a second, “non-public” level of dialog. Just as one can find in any sports team locker room or any office break room, there is trash talk, jibs, jokes, and general banter that has little to do with the business at hand, but is vital in relieving the pressure of the situation. It builds and reinforces the bonds of the team and actually nurtures and facilitates the complex web of informal relationships that bind the team. A team without some form of non-public pressure-relief mechanism can implode and disintegrate or grind itself to a state of ineffectiveness. The general and his or her key advisors set the tone for what is acceptable in this non-public dialog. Like some famous basketball coaches, the tone can be mercurial, vulgar, and politically-incorrect or it can be “family friendly” and jovial.

Whatever form this non-public dialog takes, no one really expects to be held accountable until or unless it crosses some threshold. For the most part, this side dialog is background noise to the public conversation and the dance of the battle staff. In this particular case, the threshold was crossed when McChrystal, or more likely, one of his key advisors allowed the comments to be made public record.

No transcript of the conversation between President Obama and General McChrystal has been made public. But I would suspect, and hope, that when McChrystal was summoned to explain what happened, he pointed the finger of responsibility right where it belonged, at himself. Regardless of any personal animosity that existed between Obama and McChrystal, a public trust had been violated. As Hamish Taylor, Strategy Consultant & Coach put it, “the outcome was probably in both men’s interest the right one.”

Could trust be rebuilt through a process of reconciliation? Possibly. Given a different set of political circumstances and given different individual personalities, it might have been possible to take the time, and it would require time, to forge anew the bonds of trust. But McChrystal is who he is. He was famous for his brusque, rough-edged manners. Obama also is who he is, someone who tolerates, in private, a certain brashness and bravado in his advisors, but in public suffers no rogue players.