Culpepper 1

Kadisha Culpepper
Professor Marion Bruner
English 120 002
8 April 2015
How has globalization affected poverty in Latin American countries?
According to BBC Bitesize, globalization is the process by which the world is becoming
increasingly interconnected as a result of massively increased trade and cultural exchange (BBC
Bitesize). Globalization is characterized by the opening of international trade and removal of tax
barriers in many developing countries and is known to have the greatest impact on these
countries. A developing country as defined by the World Bank is one with a Gross National
Income of eleven thousand, nine hundred and five thousand. Latin American countries make up a
large percentage of developing countries. These Central and South American countries are
known to face great poverty. Globalization can be seen as both a plus and negative to the
socioeconomic status of residents in developing countries. Although globalization has benefits, it
seems to cause more harm than good in these countries.
The book Fighting the Diseases of Poverty supports the fact that globalization is
beneficial to poverty in terms of health. Through globalization, there are new medicines and
methods to treat certain diseases. There is also easier and cheaper access. In Guatemala, there are
many pharmacies around the towns and cities. They sell many prescription drugs over the
counter to make it easier for people to access especially the poor as most cannot afford to visit
the doctor. However, with this comes the issue of inequality. Although there is easier access to

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health benefits for the poor, the upper class members of society tend to take advantage of these
opportunities leaving the poor with nothing.
In an interview with Nina Pavcnik from Yale University in April 2009 entitled How has
globalization benefitted the poor? she explains that it creates employment for the people and
reduces poverty. She also mentions that even though it creates an issue of child labor,
employment is still created for families who live in extreme poverty and need their children to
work to sustain them. It allows them to get money to support their families hereby increasing
their living standards.
However, according to Anne Harrisons report, the poor in countries with an abundance
of unskilled labor do not always gain from trade reform ("On the Links between Globalization
and Poverty"). The inequality will become greater and there will be increased scenarios of child
labor and unprotected and abused workers as the demand is greater. Also, the benefits of
globalization can only be widespread if the government implements certain complimentary
policies. Unfortunately, this is not the case in most countries and the systems are only set up so
that the rich get richer and poor remain poor. Globalization to an extent cripples social mobility.
Guatemala is a developing Central American country with a population of about fifteen
million. Many of the people live in extreme poverty. Guatemalas society can be seen as a five
story building according to Edelberto Rivas. About 67.7% of the population make up basements
one and two and live in poor conditions. At the top level, the pent house which is made up of
about 1.5% of the population. The people at this level earn about 40% of the Guatemalan wealth.
Although remittances may be about 13% of the Gross Domestic Product, Guatemala still has a
higher import rate than export rate. Therefore Guatemala is the perfect example of the effects of
international trade and globalization on poverty (Guatemala Socio-Economic Analysis).

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Guatemala has many American companies. In the cities there are many franchises like
Burger King, McDonalds, North Face and even Walmart. These companies replace local
businesses and put them out of business. Therefore, the money made from these companies do
not really benefit the Guatemalan economy. Also, many people bargain with market vendors to
purchase items like clothing, bags and home dcor which they export and resell for twice the
price. Hence, there is no real profit to the original makers of the items. This applies to food
products which are obtained from cheap labor and sold in the United States.

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Works Cited
BBC Bitesize. Globalisation. BBC Bitesize. BBC, 2014. Web. 4 Apr. 2015.
Brooks, David. "Good News about Poverty." New York Times, Late Edition (East Coast) ed.Nov
27 2004. ProQuest. Web. 4 Apr. 2015.
Harrison, Ann, and McMillan, Margaret. "On the Links between Globalization and Poverty."
Journal of Economic Inequality 5.1 (2007): 123-34. ProQuest. Web. 3 Apr. 2015.
Morales, Esmeralda. Guatemala Socio-Economic Analysis. CEDEPCA Office. Guatemala. 9
Mar. 2015. Lecture.
Pavcnik, Nina. How has globalization benefitted the poor? Yale School of Management. Yale
School of Management, 2014. Web. 3 Apr. 2015.
Stevens, Philip. Fighting the Diseases of Poverty. Great Britain: Transaction Publishers, 2008.
Print.