GLOBALIZATION AND POVERTY

Globalization and free markets is imagined as an effort to increase global efficiency. Global trade helped many countries to grow more rapidly. Globalization also makes developing countries have access to knowledge that can not be obtained previously. Globalization (which is usually associated with receiving a true capitalist style, American style) is progress of developing countries must accept it, if they want to grow and fight poverty effectively. But for most people in developing countries, globalization has not brought the promised economic benefits (Stiglitz, 2002:6).

Globalization, in practice the weak efficiency of the world should pay for the welfare of the strong. South finance global efficiency for the benefit and progress of the North. The increasingly wide gap between the rich and the poor has led to more and more people in the Third World became increasingly poor. In 1990, 2718 billion people live on less than $ 2 per day, whereas in 1998 the number of poor people who live with less money than $ 2 per day estimated at 2801 billion. This happens with respect to the total increase in the actual world income by an average of 2.5% per year (World Bank, 2000:29).

Globalization has not succeeded in reducing poverty and has not managed to guarantee stability. Crisis in Asia and Latin America have threatened the economy and the stability of developing countries, even the crisis of 1997 and 1998 is a threat to the entire world economy. Even greater crisis happened before. Economic crisis, the largest financial and banking in the United States in the 1930s, which is closed or assisted 9106. In Table 1.1, indicated the number of banks in the United States are closed or assisted (Federal Deposit Insurance Corp., 2004).

Globalization and the introduction of market economy has not given the results promised in Russia and for most other economies that are doing the transition from communism to a market economy system. Instead the system produces such great poverty (Stiglitz, 2002:7). Petras and Velmeyer (2001) more strongly than that mentioned above, globalization is the new Imperialism, in its form as the new international system of global capitalist class, the TNCs (transnational corporations) that currently amount to 37,000), the World Bank, IMF , IFIS (international financial institutions as the global financial network), G-7, TC (Trilateral Commission and the WEF (the World Economic Forum).

Mid-1997 crisis also hit Indonesia, and even Indonesia is a country that suffered the most severe. Economic growth the previous year of about 7% per year fell sharply to - 13.7% and inflation reached 77.6% in 1998 (Sabirin, 2003:45). It turned out that globalization is not increasing prosperity, but for the third world, globalization actually increases poverty.