Milla Vien 14/01/2023
Geography Essay
B/ question
To what extent can you say that globalisation is reducing inequalities in MICs and LICs?
Globalisation is the process of interaction and integration among people, companies, and
governments worldwide. As a cause of the constant rising of this globalisation over the past years, some
organisations have found bene ts in this situation regardless of other concerns such as the environmental
issues. However, already existing inequalities are impacted by the globalisation, like the ones we can observe
in low-income countries (LICs) and middle-income countries (MICs). These income categories are referred
as ‘developing countries’ by the World Bank to classify economies for operational and analytical purposes
based on their GNIs per capita. Therefore, looking at the various consequences of this geographical
phenomenon, we will discuss to what extent we could say that globalisation is reducing inequalities in MICs
and LICs.
To begin with, one could agree that globalisation has indeed reduced some inequalities in MICs and
LICs with the example of some countries concerned by these range of income, that have greatly bene ted
from globalisation.
One of the consequences of globalisation is the improvements made in trade and commercial
connectivity between countries. However, a correlation between a country’s way to trade and its income
could be made. In fact, many examples shows that the poor countries that have reduced trade barriers and
participated more in international trade have seen their GDP growth rates accelerate. It is the case of Qatar,
that was part of the LICs and is now considered an emerging/high income country since they highly
participated in international trade when they started exploiting their oil and natural gas resources, they are
now ranked fourth highest GPD per capita income. Thanks to globalisation, LICs and MICs are given the
opportunity to exchange and trade with other countries all over the world and consequently improve their
economical situation. Therefore, within this particular aspect, it could be said that globalisation is reducing
inequalities.
Another factor is the role of globalisation in people ow, and more particularly tourism.
Globalisation connects countries and regions and allows people to travel more, but as tourism is a source of
income for the visited countries, it can also be improving its economical situation. To illustrate that idea, we
could focus on the example of Macao in China. Macao’s overall economy thrived as visitors from Mainland
China began to surge in 2003 as travel restrictions loosened. The city's small population associated with its
large economy means its GDP per capita is now one of the world's highest. Tourism is a concept that can
bring a lot to a region or country, it is the case of Dubrovnik in Croatia which is now only existing for
tourism and is even almost empty in terms of inhabitants. Actually, many LICs and MICs relie on tourism to
keep a sustainable economical stability, globalisation creates a way for them to exist internationally and to
have an importance, and improving their nancial situation. With tourism and trade, both greatly improved
by globalisation, it could indeed be said that globalisation is reducing inequalities in MICs and LICs. (Chine
nouvelle route de la soie projet de co
However, even if some aspects of globalisation could give the impression that it is mostly bene ting
LICs and MICs, there are limits to its capacity at reducing inequalities.
Indeed, LICs and MICs pro ting from trade thanks to globalisation, does not mean high income
countries are not concerned. The income it brings them is certainly improving their GDP, but does not bring
them closer to the HICs’s GDP since it also evolves. As a matter of fact, the inequalities are only persisting
but are not solved. We come to this conclusion by looking at the Elephant Curve in relation to globalisation’s
effect on income inequality : it re ects the low growth that has occurred in the poorest countries, speci cally
countries in sub-Saharan Africa, compared to the tremendous growth experienced by the global elite. The
Elephant Charts shows that globalisation is based on the inequalities between the Global North and the
Global South. Continuing on a more global scale, with the example of the Triades, trade is indeed spread on
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Milla Vien 14/01/2023
the whole globe but its bene ts are only shared by a few countries : the United States (US), the European
Union (EU) and Japan (JP) which are already developed countries. Thus, globalisation does not reduce
inequalities in MICs and LICs.
Furthermore, Globalisation can even increase wage inequality in a relatively rich country by
increasing the imports of manufactured goods using predominantly low-skilled labour from developing
countries. It would even be fair to assume that inequality increases if globalisation further reinforces the
economic growth of the already globalised regions. This concept of “low-skilled” labour coming from the
LICs and MICs is really important to understand the impact of globalisation. For instance, Bangladesh is
producing textile because their workforce is low skilled and cheap, while HICs like France or even Germany
can produce cars because they are more skilled and specialised. When a country opens itself to the
international market and trade, then it might facilitate technology diffusion from High Income Countries to
Low and Middle Income ones, and it is very likely that the new technologies would be more skill
demanding. If such is the case, then openness – via technology – would imply a counter-effect : an increase
in the demand for skilled labour, meaning an increase in wage dispersion and so an increase in income
inequality. The Brain drain is indicative of how the skilled students and the international elite nds HICs’
university and companies more attractive, and are willing to quit MICS and LICs because they know they
would not be recognised, would not have access to the best education, and could not be paid for their skills.
Therefore, globalisation is preventing LICs and MICs from evolving within international relations and
market and thus created more inequalities.
All things considered, globalisation could at rst seems to reduce inequalities in LICs and MICs
when looking at the opportunities they are given with trade and tourism, and looking at the speci c cases of
some countries that made it through that bene ting system. However, it is not the case when studying the
general situation of LICs and MICs and the actual impact of globalisation. It would not be fair to consider
that globalisation is reducing inequalities in MICs and LICs, since it is even worsening them in some areas
and will still be an issues in the future concerning the education they are given and their status of “low-
skilled” labour.
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