Political economic inequalities, globalization, and international terrorism

Rapid innovations in technology, particularly telecommunications and transportation, have accelerated the globalization process in recent years, and a number of positive outcomes have been associated with these trends, including increased levels of international commerce and improved cross-cultural understanding and communications. Despite these significant positive outcomes, the same globalization processes have also further exacerbated existing economic and political inequalities between developed nations such as the United States and the United Kingdom. These glaring disparities between the very rich and the very poor have also been cited as a major contributor to the incidence of international terrorism, making the need for informed and timely approaches to resolving these inequalities more important than ever before in human history. To this end, this dissertation/thesis provides a review of the relevant literature concerning political and economic inequalities that are attributable to globalization and how these inequalities have contributed to international terrorism in recent years, and a case study of these issues as they relate to the Gaza Strip. A summary of the research and important findings are presented in the study's concluding chapter.

Table of Contents

Chapter 1: Introduction

Chapter 2: Globalisation, Inequalities and Terrorism

Political Inequalities

Economic Inequalities

Contribution of Inequalities to International Terrorism

Chapter 3: Case Study of the Gaza Strip

Chapter 4: Conclusion

Definition of Key Terms

GINI

This is a measurement of the income distribution of a country's residents

GNI

Gross national income

IDA

International Development Association

Table of Figures

Figure 1. Per Capital Income Growth for Average Income of the Poorest One-Fifth

(percentages)

Figure 2. Numbers of NGOs having Members in Low Income, Middle Income and High

Income Countries 1991-2001

Figure 3. Global GNI per capita (2001)

Figure 4. Global population required to subsist on $2 a day or less: 1984-2001

Figure 5. Regional percentages of population living on less than $2.00/day

Figure 6. Comparison of regional poverty rates using $1.25- and $2.00-a-day cutoffs

Figure 7. Gini Inequality in Africa

The Inequalities Caused by Globalisation that Promote International Terrorism

Chapter 1: Introduction

The process of globalization is certainly not new, and many of the processes that are shaping the world today have been at work for thousands of years. The processes of globalisation began to gain momentum during the mid-19th century as the impact of the Industrial Revolution created a global search for markets and raw materials (Jones 2005). During this latter period in human history, imperialism managed to overcome any resistance to the spread of globalization, and by the early 20th century, an integrated global economy had already been established (Jones 2005). Following the outbreak of World War I, though, this initial global economy was devastated by a series of political and economic shocks and the Russian Revolution further eroded the economic structures that had fueled the globalized process up until this point in time (Jones 2005). Despite these setbacks, the process of globalization quickly picked up pace thereafter. For instance, according to Jones, "Barriers to the mobility of people were erected which have never been removed. Barriers to investment and trade grew to dramatic heights. Multinationals proved flexible. Many existing organizations remained intact, although there was not a great deal of new investment during the 1930s and 1940s" (2005: 40).

Following the end of World War II, the forces driving globalization became the focus of the international community once again. In this regard, Farazmand notes that, "With the emergence of the Soviet reformist leader Mikhail Gorbachev, who called for global restructuring, openness, a new way of global thinking, peace for all, superpower cooperation, and an end to the Cold War, the concept of a new world order reemerged" (1999: 509). Likewise, after the Helsinki Summit in September 1990, then-U.S. President George Bush also employed the term "new world order" to describe the emerging globalized marketplace (Farazmand 1999). Not surprisingly, the issue of globalisation has also become the focus of an increasing amount of research in recent years (Farazmand 1999).

The concept of globalization remains controversial, though, and there remains a paucity of agreement concerning precise definitions. In this regard, Bierema, Bing and Carter define globalization as being "the crossing of financial, technical, and cultural boundaries to facilitate a global flow of goods, information, and services. Terminology aside, many companies have developed a global presence in the past two decades through technological advances and eroding trade barriers" (2002: 70). Not all of the effects of this increasing globalization have been negative, of course, and the positive effects of globalization include increasing international commerce, cross-cultural understanding and communications (Bierema et al. 2002). Despite these positive effects, a wide range of negative outcomes for emerging nations in particular have also been attributed to the process of globalization which also formed the focus of this study discussed further below.

Statement of the Problem

Although the processes are not new, Jones (2005) emphasizes that the forces driving globalization have become increasingly accelerated in recent years as a result of innovations in technology, particularly telecommunications as well as transportation. As noted above, there remains a lack of a consensus concerning what globalization means to different people, but Kiggundu (2002) suggests that irrespective of the definition that is used, the adverse effects of globalization remain firmly in place. In this regard, Kiggundu emphasizes that, "Globalization is multidimensional and, therefore, means different things to different people across time and space. Globalization is about transformational change with intended and unintended adverse effects" (2002: 17). Many of the adverse effects of globalization, of course, are economic in nature. For instance, according to Held (2004), "It is now almost impossible to pick up a newspaper or listen to the news without either being confronted by the word 'globalization' or being faced with issues relating to its economic impact" (86). Moreover, Held (2004) suggests that even as the processes of globalization have intensified in recent years, the ability of national governments to address the inequalities it produces has declined and international bodies increasingly lack the authority to enforce agreed policies. Indeed, Friedrichs and Friedrichs report that, "International financial institutions such as the World Bank are key players in an increasingly globalized capitalist system. [In fact], the policies and practices of international financial institutions such as the World Bank, the World Trade Organization, and the International Monetary Fund can only be understood in the context of the notion of 'globalization'" (2002: 13). Furthermore, Kiggundu also emphasizes the inexorable and irresistible qualities of globalization, particularly for emerging nations and suggests that because they are at the mercy of international trade, they have no real choice in the matter but to hang on as best they can in the globalization process. For instance, "Because the key drivers of globalization come from industrialized countries," Kiggundu notes, "individual developing countries have no realistic option but to participate in the globalization process" (2002: 17). The adage that "a rising tide raises all boats" may be applicable in some ways to the processes of globalization. For instance, poor people may be able to benefit from societies growing richer as demonstrated by two World Bank economists, David Dollar and Aart Kraay, who studied 40 years of income statistics from 80 countries and found that growth benefits the poor just as much as the rich. According to Dollar and Kraay, "With 1% growth, the incomes of the poor rise by 1% on average; with 10% growth, they rise, on average, by 10%. Not always and not everywhere -- there are exceptions and variations -- but on average" (80). Dollar and Kraay illustrate their finding in Figure 1 below.

Figure 1. Per Capital Income Growth for Average Income of the Poorest One-Fifth (percentages)

Source: Norberg 2003, p. 79

The harsh realities for hundreds of millions of other global citizens that do not reach this "average," though, is the inequalities that globalization has further exacerbated. In this regard, Hammer reports that, "In a world where a few enjoy unimaginable wealth, two hundred million children under five are underweight for lack of food" (2003: 108). Not only do hundreds of millions of people lack enough to eat in a world of otherwise-plenty, fully two-thirds of the world's citizens do not have access to clean drinking water on a regular basis (Hammer 2003). These fundamental inequalities, though, represent just the tip of the inequities iceberg, making the purpose of this study particularly timely and valuable and this purpose is discussed further below.

Purpose of Study

The overarching purpose of this study was to use a political economy approach to analyze the inequalities that have been caused by globalization and the effect of these inequalities on promoting international terrorism. By identifying opportunities to address these inequalities, policymakers, nongovernmental organisations and other interested actors may be able to help eliminate the fundamental causes of terrorism and provide a framework in which further progress can be achieved in the future.

Importance of Study

Although the precise causes of international terrorism are multifaceted, many authorities cite the political and economic inequalities that exist between major industrialized nations and emerging nations that are being caused by the processes of globalization as being a proximate cause. For example, Hurrell and Woods emphasize that, "Within weak states globalization and widening inequality are eroding the capacity of governments to deal with an increasing set of social, economic, and political conflicts" (1999: 2). At the regional level, the inequalities being generated by globalization are creating instability and the further marginalization of the already impoverished (Blank 2007). At the global level, the implications of the inequalities being caused by globalization are even more severe. In this regard, Hurrell and Woods add that, "As globalization creates sharper and more urgent problems for states and international institutions, increasing inequality reduces their capacity to manage these problems effectively. In this context, it is unsurprising that the sense of unease about globalization has increased and that political and media attention has come to highlight its negative consequences" (1999: 2).

Rationale of Study

Notwithstanding its importance, the implications of globalization remain unclear and understudied (Kiggundu 2002). In fact, to date, there has not been a unified theoretical or conceptual framework developed that can even adequately explain globalization; rather, various authorities have advanced different models (Fine 2002; Bartelson 2000; Held 2000 and others), a trend that has only further contributed to the complexity of the analysis as well as confusion concerning what globalization means to different peoples (Fine 2002; Kiggundu 2002), causing some observers to question whether such a unified theory is possible. What is known with some degree of certainty, though, is that the processes of globalization are challenging the bases of order in profound ways including exacerbating inequalities both within and among states and by diminishing the ability of traditional institutions to respond to new threats to national security (Hurrell & Woods 1999).

Description of the Study Approach

This study used a combination of two methodologies, a qualitative review of the relevant peer-reviewed, scholarly, governmental and nongovernmental organizational literature together with a case study approach, to achieve the research purpose described in the introductory chapter. This approach is highly congruent with numerous social researchers who emphasize the need to review what is known about a given topic prior to formulating opinions and drawing conclusions. For instance, Fraenkel and Wallen report that, "Researchers usually dig into the literature to find out what has already been written about the topic they are interested in investigating. Both the opinions of experts in the field and other research studies are of interest. Such reading is referred to as a review of the literature" (2001: 48). Likewise, Wood and Ellis (2003) suggest that one of the most important outcomes of a well conducted literature review is the opportunity to identify gaps in the existing body of knowledge.

The second part of the study approach consisted of a case study of the Gaza Strip. According to Thomas, a case study is "...a general term widely used, especially in the social and behavioural sciences, to refer to the description and analysis of a particular entity (object, person, group, event, state, condition, process or whatever). Such singular entities are usually natural occurrences with definable boundaries, although they exist and function within a context of surrounding circumstances" (2004: 128). This description of a case study suggests that this research approach was highly suitable for the purposes of this study. Moreover, other authorities also confirm the value of a case study approach for social research applications. For instance, according to Neuman, the case study approach is "research in which one studies a few people or cases in great detail" (2003: 530). The ability to develop an in-depth analysis of a specific topic also makes the case study methodology a highly suitable technique for the purposes of this study. As Feagin, Orum and Sjoberg point out, "The study of the single case or an array of several cases remains indispensable to the progress of the social sciences" (1991: 1). There are some distinct benefits to the use of a case study approach as well. For example, Feagin et al. add that, "The case study offers the opportunity to study these social phenomena at a relatively small price, for it requires one person, or at most a handful of people, to perform the necessary observations and interpretation of data, compared with the massive organizational machinery generally required by random sample surveys and population censuses" (1991: 2). Taken together, the combination of a critical review of the relevant literature and the case study approach represented a useful framework for developing the research needed.

The data-gathering method used for this study proceeded in a step-wise fashion, beginning with a general review of globalization, followed by more focused research concerning the effects of globalization on creating inequalities in the political and economic spheres. Similarly, the case study component also proceeded in this fashion, beginning with a general overview of the situation and its historical antecedents, followed by increasingly focused research concerning inequalities in the political and economic spheres.

Overview of Study

This study used a four-chapter format to achieve the above-stated research purpose. Chapter two of the study delivers a critical review of the relevant and peer-reviewed literature, and chapter three provides a case study of the Gaza Strip. Finally, chapter five presents a summary of the research and the study's conclusions.

Chapter 2: Globalisation, Inequalities and Terrorism

This chapter provides a review of the relevant peer-reviewed, scholarly, governmental and nongovernmental organizational literature concerning the political and economic inequalities that have been associated with the process of globalization, followed by an analysis concerning how these inequalities have contributed to the incidence of international terrorism in recent years. A brief summary of the research concludes this chapter. In spite of its worldwide implications, the processes that are driving globalization must be interpreted and explained as they affect people at the local level (Kiggundu 2002). Modern economic definitions provide some indication of how the globalization processes are playing out at the local level, but these are insufficient to provide the robust analysis needed to understand how the inequalities being produced can be resolved (Fine 2002). In this regard, Kiggundu emphasizes that, "The key actors, who are predominately, though by no means exclusively, found in the industrial triad, drive globalization: the United States, Western Europe, and Japan. These countries, which form the G8 group, account for more than 80% of the capital, technology, and markets that drive globalization. These countries form the central core for globalization and try to ensure that the 'rules of the game' are favorable to their domestic constituencies" (2002: 18). Although the emerging economic powerhouses of the so-called "BRIC" countries (Brazil, Russia, India and China) remain influential in the globalization process and such influence will continue to increase in the future, at present, the United States remains the most powerful driver of globalization (Kiggundu 2002). In fact, Kiggundu stresses that, "One cannot understand globalization without understanding the United States: its economy, drive for scientific innovation and competitiveness, capital markets, global corporation and business management acumen, geopolitics and international relations, the military, domestic politics, and popular culture" (2002: 18). While some economists project China's economy to outpace the United States in the next decade or two, at present, the U.S. remains the key player involved in the process of globalization. As Kiggundu concludes, "In the twenty-first century, the United States is well positioned for globalization -- what the United Kingdom was for the Industrial Revolution about 250 years ago. Every globalizing developing country, therefore, must understand its relationships with the G8 countries in general and the United States in particular. Likewise, Americans must understand better how the rest of the world lives and works and is governed" (2002: 18).

The experiences with globalization to date have made it apparent that the processes are inextricably interconnected with various types of extremes. In this regard, Kiggundu emphasizes that, "Winners have tended to 'take it all' by accumulating wealth, assets, opportunities, income, and political and economic power as well as control of and access to technology. Losers, on the other hand, have tended to lose it all: income, assets, economic and political power, and dignity as well as control and access to opportunities such as education and training, technology, and government services and subsidies" (2002: 18). Consequently, political and economic inequalities have become more severe and their adverse effects felt far more significantly in some regions of the world than others (Kiggundu 2002). Because peoples' lives and the quality of life for their families are at stake, it is little wonder that these inequalities have become a global sore spot that have implications far beyond their effect at the local level. In this regard, Kiggundu emphasizes that globalization "causes economic, social, political, and cultural discord, especially for societies in which equality, egalitarianism, and social justice are core values. While most developing countries have always experienced inequalities, globalization makes them more pronounced and transparent" (2002: 18). The responses needed to these political and economic inequalities demand an informed and enlightened approach that has thus far eluded policymakers in the developed nations of the world, but which is an absolute necessity in order to prevent further erosion of the ability of the developing nations of the world to join the international community in meaningful ways while contributing to the incidence of international terrorism. According to Kiggundu, "It is therefore important for every globalizing country, organization, or community to develop a strategy for managing these inequalities without, at the same time, destroying the incentives that drive competitiveness" (2002: 18). Formulating effective strategies for better managing political and economic inequalities resulting from the globalization process, though, requires not only an informed approach but the political will to do so -- and this will has largely not been evident to date. Indeed, the positive effects together with the political and economic inequalities resulting from the processes of globalization are a dual-edged sword that demands new approaches and new strategies that can contribute to the former while attenuating the latter. In this regard, Kiggundu points out that, "As it presently exists in the world today, globalization is an asymmetrical and imperfect system. To be committed to globalization is to understand its lack of symmetry among the players and its inherent imperfections. Therefore, globalizing countries, governments, businesses, institutions, and communities must commit themselves to work toward its improvement" (2002: 19). While the major industrialized countries of the world have an important role to play in reshaping the inequitable effects of globalization, emerging nations as well must do their part. As Kiggundu notes, "For developing countries, this means, among other things, not to promote globalization as a panacea for all problems, but to build the necessary institutional capacities and competencies for the defense and improvement of globalization for the greater benefit of all citizens" (2002: 19).

On a final note, Kiggundu (2002) reports that notwithstanding the growing importance of the role being played by the private sector in fueling the processes of globalization, the role of the nation-state and governments continue to be driving force as well. Therefore, the manner in which the governments of emerging nations manage the effects of globalization on their own citizens, including the administration of domestic as well as international resources, developing strategies for implementation and action, and taking advantage of best practices from the private and public sectors, will all have a direct impact on how the processes of globalization will play out in the future (Kiggundu 2002). As this authority points out, "Globalization must be managed as a complex transformational change permeating all levels of society and institutions. In the past twenty-five years, most developing countries have had experiences with similar transformational changes" (Kiggundu 2002: 19).

During the closing decades of the 20th century, many of these emerging nations took steps to effect the structural changes that were needed to take advantage of the processes of globalization, including reform of their civil service and other public sector agencies and to provide more democratic institutions. Those emerging nations that took these initiatives rather than simply sitting back and allowing the processes of globalization to overwhelm them have fared far better (Kiggundu 2002). In this regard, Kiggundu adds that, "The same is true with globalization. Those countries or societies with the political will, institutional resources and capacities, and individual motivation and competencies to manage it as a strategic opportunity will benefit more from globalization and protect themselves from some of the extreme adverse affects better than others" (2002: 19). Taken together, the negative effects of globalization are profound and broad-based, but this does not mean that the adverse outcomes must be accepted as the ultimate outcome of globalization, but it does mean that action must be taken sooner than later to help address the political and economic inequalities that have resulted from these processes.

Political Inequalities

Throughout history, nations have experienced political inequalities to be sure, and these inequalities have frequently led to conflict and war. Today, political inequalities between the developing nations of the world and emerging countries have become even more pronounced as a result of globalization. For instance, according to Hurrell and Woods, "Inequality has long been a defining feature of world politics. Immense and increasing disparities of wealth, of power, and of security shape the world in which we live. Economic liberalization is exacerbating the gap between rich and poor within virtually all developing regions" (1999: 1). Concomitantly, other aspects of globalization are also creating further inequalities in political power and influence, as well as stressing new features of these inequalities. In this regard, Hurrell and Woods report that, "For one group of countries globalization is eroding the cohesion and viability of the state. However, other countries and actors are empowered by processes of globalization, since they are better placed to adapt and exploit its new opportunities. Equally, the disparity of power among states is becoming more marked and more visible as an increasing volume of ever more far-reaching rules, rights, and values are being asserted and imposed at the global level" (1999: 1). Since the end of the Second World War and the subsequent creation of several international institutions we have been witnessing the emergence of a global politics with their foundation in the 19th century, in which interests are articulated, decisions are made by the structures of global governance - States, International Organizations and public and private agencies- the function of which is to regulate the problems of humanity. These new networks are emerging due to the inability of States to deal with the new international problems; international crime, drugs cartels, terrorism. Global governance is determined by multiple actors which have responsibility for the formulation and implementation of global rules to regulate international activities. We have now a "Post-Westphalia" order: where politics have been globalized there follows a reordering of power relations between States, international organizations and agencies (Baylis, Smith & Owens, 2008: 20-27).

As a consequence we have multiple centers of National and extra-national governance located within the international organizations of world governance. The World Trade Organization regulates trade (WTO), the World Bank (WB) intervenes mainly in developing countries concerning loans and implementing policies of good governance, the International Monetary Fund (IMF) focuses on writing economic reports for the developed countries and granting loans as part of its structural readjustment programs. In the nongovernamental organizations perhaps the most important given their impact on the world economy are the credit rating agencies such as Standard's and Poors, which effectively determine the cost of State loans. These organizations have a huge interventionary power in the domestic affairs of the Nation-States.

These new power relations are a result of globalization. However, there has been a tendency for these new international relations and there corresponding organizational forms to reproduce and maintain pre-existing asymmetries between countries, resulting in the significant politicization of the new global concerns. In substance the problem is that these organizations, especially the United Nations (UN), a key actor of global governance, are a product of the balance of power immediately after the second world war especially as far as the victorious nations are concerned a consequence of which is that they assume a leading position in those institutions over and above other countries. So, we have an international system suffering from a huge democratic deficit in global governance, in the leading institutions. This can be seen in the unequal allocation of votes in the international institutions. For example, on the one hand, the voting system of World Bank is divided between the largest shareholders, the United States, Japan, Germany, France and the United Kingdom with 40% of the votes; on the other hand the forty two sub-Saharan countries have only 5.2%of the votes. Also in the IMF where twenty four industrial countries hold ten seats on the executive board and forty two sub-Saharan countries have only two seats. Issues of peace and security are determined by only 15 members of international society, and only five can exercise the power of veto. If there was a conflict and two hundred countries decided for an intervention, the veto of any one will block any solution (Held & Macgrew, 2000: 181-190).

There are huge asymmetries of power and authority at the global level, the group of seven (G7) has a great influence on the governing boards of the international institutions, excluding the voices and influence of the developing countries, in shaping global policy. As shown in Figure 2 below, the differences between actors that have a seat in non-governmental-organizations and those who do not are alarming, and represent a clear indication of the huge gap between the affluent and impoverished and their influence on global politics (Held & Kaya 2007).

Figure 2. Numbers of NGOs having Members in Low Income, Middle Income and High Income Countries 1991-2001

One criticism of this system of global governance is that there is a lack of justice and morality in the global governance institutions and that global politics is shaped by the interests of individual States in pursuit of their own agenda at the expense of the others, instead of pursuing the common good for global society. So we can conclude that national interest of each State is much more important than any international morality, their having manipulated the international institutions as a strategy to maintain their hegemony, their raison d'etat (Held 2004: 92). This was recently demonstrated in the Copenhagen summit where the States refused to accept any binding resolution to fight climate change, their national interests put above the common good.

Despite the enshrining of various principles of global governance in treaties, international law and trade rules, there is not yet in the international system a single power that can aggregate all these networks. The U.S.A. could, in concept, provide a valuable service by taking the institutional leading role on the global level and promote greater peace and prosperity to the world; however, following the terrorist attacks of September 11, 2001, the U.S. has been preoccupied with pursuing a more unilateralist policy in many areas. For instance, in the economic field is printing more dollars (quantitative easing) to recapitalize their economy which is leading to inflation and the export of inflation exacerbating even further the inequalities between rich and the poor countries. In the field of defense their unilateralist position in the Iraq war has lead to an upsurge of violence worldwide (Held & McGrew 2000: 182).

Globalization brought enormous disparities between States, cementing inequalities between winners and losers especially for those who have the capacity to make the rules, metapower. The international system need to be reformed, be more democratic, but the problem is that the established powers will resist any reform in the institutions which they dominate, so we should say we do not have true global politics, but instead a distorted global politics because those who have the power, shape the policies in their favor, colonialist power reestablished in the world institutions. It is clear we do not have a supreme authority to rule the world. Rather the international system is compounded in favor of who have the power to make rules (Held & McGrew 2000: 387).

Taken together, it is clear that the negative effects of globalization are being concentrated in a few key regions of the world, including Africa, India, parts of Asia and Oceania. Moreover, beyond the foregoing, the processes of globalization have also introduced changing systems of norms and rules regarding national security, investment, responsibilities for appropriate environmental management, and social structures; by and large, these changes are being imposed by the movers and shakers of globalization, rather than the emerging nations that must tag along in the process (Hurrell & Woods 1999). According to Hurrell and Woods, "Less powerful states are, even more than in the past, becoming 'rule-takers'. Equally, technological advances, far from creating more equality among states and other groups, are in fact widening gaps among states and regions" (1999, p. 1). Although these processes are affecting a broad-based array of human factors, national security issues have been placed at the forefront of many countries' ambitious as a result of the regional and local destabilization caused by terrorism. As the United States continues to seek hegemony among the world's nations, it is reasonable to suggest that increased military spending by the U.S. And other countries with little or no historical track record of massive military investments will become the norm. In this regard, Hurrell and Woods also note that, "In the military sphere, advanced technologies and the so-called revolution in military affairs may be leading to a recentralization of military and coercive power around the United States and its core allies. Overall, then, globalization is exacerbating inequalities of resources, capabilities, and, perhaps most importantly, the power to make and break rules in the international arena" (1999: 1).

Following the terrorist attacks of September 11, 2001, these issues became even more pronounced as the United States and its allies sought ways to counter these non-state actors that defied conventional military solutions. The asymmetrical warfare that has characterized the conflicts between Western countries (for the most part, but certainly not entirely) and developing nations since that time is not necessarily new, but like the other forces at work in the globalization process, they became far more pronounced after September 11, 2001. In this regard, Apostolov emphasizes that, "The challenge that the global system of states faced in September 2001 was not at all new. There were clear signs in the Christian-Muslim frontier zone, during the last decades of the twentieth century, that the construction of a global network of nation states was not going unchallenged" (2004: 37). One clear indication of how the political inequalities that have become especially pronounced as a result of globalization can be seen from Apostolov's observation that, "State institutions in [developing nations] had simply fallen apart under pressure from imploding communal strife. Political extremists in various countries, affected by communal conflicts in the zone of contact, capitalized on the historical animosity between Christians and Muslims" (2004: 37). Likewise, political inequalities in other regions of the world have been fueled by globalization in ways that have not been witnessed in the past. For instance, Apostolov also notes that, "Political entrepreneurs within the intermingled confessional communities struggled over the distribution of territory and political influence. They used popular fears of the cruelty of 'the other' who lived next door. These fears were deeply seated in the historical memory of the different communities" (2004: 37).

Overriding all of these factors is the ugly fact that many people are making a lot of money from geopolitical inequalities, and these powerbrokers have little incentive to see things changed. In this regard, Fine (2002) emphasizes that, "Far from simply being the victims of globalisation, some nation-states promote and benefit from it" (17). The military-industrial complex is well-known to benefit from strife, and these issues are cited time and again among marginalized people as being a major source of unrest, discontent and even terrorism. After all, what do people who are having drones attack them have to lose by fighting back? In sum, then, the political inequalities that have become exacerbated by the process of globalization have also contributed to an enormous array of negative outcomes, the full consequences of which remain to be seen. Adding further fuel to these fires are significant economic inequalities that have been caused by globalization, and these issues are discussed further below.

Economic Inequalities

The World Bank's main criterion for classifying national economies for operational and analytical purposes is gross national income (GNI) per capita. Based on its respective GNI per capita, every national economy is classified as being low income, middle income (subdivided into lower middle and upper middle), or high income; in addition, other analytical groups based on geographic regions are also used by the World Bank (Country classification 2007). The World Bank's analytical income categories (low, middle, high income) are based on lending categories such as civil works preferences, International Development Fund (IDA) eligibility, and so forth that were established three decades ago based on the notion that because poorer countries deserve better conditions from the Bank, comparative estimates of economic capacity needed to be established. Therefore, GNI, which is a broad measure, was regarded as being the single best indicator of economic capacity and progress and GNI per capita therefore represents the World Bank's primary criterion for classifying countries. As shown in Figure 3 below, there are some glaring inequalities among the world's nations in terms of GNI today:

Figure 3. Global GNI per capita (2001).

Source: World Bank HNP Atlas 2007, http://devdata.worldbank.org/hnpstats/HNPAtlas/gni.gif

The growth in percentages of the world's population forced to subsist on $2 a day or less is shown in Figure 4 below.

Figure 4. Global population required to subsist on $2 a day or less: 1984-2001.

Source: World Bank HNP Atlas, 2007, http://devdata.worldbank.org/hnpstats/HNPAtlas / day2.gif.

More recently, other redefinitions of poverty that include people living on $1.25 and $2.00 a day have provided some new indicators of global poverty levels. Based on these redefinitions, there are some profound regional differences in the incidence of poverty as shown in Table 1 and illustrated graphically in Figure 4 below.

Table 1

Regional poverty headcount ratio at $1.25 a day (PPP) (% of population)

Region

Percentage of Population living on Less than $1.25/day

East Asia & Pacific

16.8%

Europe & Central Asia

3.7%

Latin America & Caribbean

8.2%

Middle East & North Africa

3.6%

South Asia

40.3%

Sub-Saharan Africa

50.9%

Figure 4. Regional percentages of population living on less than $1.25/day

Table 2

Regional poverty headcount ratio at $2 a day (PPP) (% of population)

Region

Percentage of Population living on Less than $1.25/day

East Asia & Pacific

38.7%

Europe & Central Asia

8.9%

Latin America & Caribbean

17.1%

Middle East & North Africa

16.9%

South Asia

73.9%

Sub-Saharan Africa

72.9%

Figure 5. Regional percentages of population living on less than $2.00/day

Figure 6. Comparison of regional poverty rates using $1.25- and $2.00-a-day cutoffs

Source: Based on tabular data at http://data.worldbank.org/topic/poverty

According to Peacock, "Globalization does not have the same effects on all populations everywhere. [Researchers] strive to reveal how the new arrangements of capital and state power affect varied populations, in their health, in their ability to provide for themselves and their families, and in their struggle to climb out of poverty" (2001: 54). As the integration of international production by transnational corporations continued to accelerate, new business forms emerged that would have a lasting impact on the global economy (Peacock 2001). While these new business forms would involve various types of mergers and other strategic alliances, there were also indications that other features of a truly global economy were developing during this period as well (Jones 2005). According to Jones, "The new global economy was complex. Large corporations were powerhouses of innovation spending and market power. Yet the economy could also be seen as a worldwide web of inter-firm connections" (2005: 37).

Following the collapse of the Soviet Union, the political ideology of the former Soviet states also experienced some profound transformations during their transition from state-operated enterprises to a more free market economy. In addition, many nongovernmental organizations and international agencies were heavily influenced by Western powers to the extent that the International Monetary Fund and the World Bank became reflective of the same types of economic policies that were being advanced by U.S. policymakers (Baylis, Smith & Owen 2008: 120). This political ideology emerged in part in response to the issues that developed following the commodities crisis in the 1980s and the cessation of the Bretton Woods monetary system (Baylis et al. 2008). In addition, Baylis and his associates note that, "The structural adjustment programs (SAPS) were established by these international organizations, who claimed that the welfare of countries undertaking such programs would be maximized by these Washington consensus policies. However, the impact generally was very negative" (2008: 120). As a direct result of these policies, the majority of so-called "Global South" nations experienced lower per capita incomes in the 1990s and the 1980s than in the 1970s as shown in Figure 7 below.

Figure 7. Gini Inequality in Africa

The global economic policies promulgated by the western States that influenced the other countries of the world have been inconsistently practiced, though. In this regard, Baylis et al. report that, "This is evident when the IMF and WB demand a strong reduction of economic barriers and tariffs in poor countries more dramatically and more rapidly than for the global north whilst leaving unaddressed the serious problems this process creates and the deficiencies of national infrastructure in addressing these problems" (2008: 120).* These problems are compounded by the fact that the most impoverished developing countries have massive amounts of debts but are also heavily reliant on ongoing loans for their survival (Baylis et al. 2008). Complex problems such as these demand complex solutions and these problems are no exception. According to Held and McGrew (2002), the solutions needed currently involve more than simply negating these countries' debts, but rather require the implementation and administration of sustainable economic policies that will allow these developing nations to join the international community in a meaningful way. For instance, Held and McGrew report, "The solution is not just to cancel the debt, as in the Jubilee 2000 campaign, but also to help these countries with sustainable development. Countries considered as high risk by credit rating agencies will also have to pay more interest on their loans, in short all the poor countries, whereas the OECD countries generally have access to low cost credit and pay much less" (2002: 28). Furthermore, the World Trade Organization points out that, "The original GATT did apply to agricultural trade, but it contained loopholes. For example, it allowed countries to use some non-tariff measures such as import quotas, and to subsidize. Agricultural trade became highly distorted, especially with the use of export subsidies which would not normally have been allowed for industrial products" (Agriculture: fairer markets for farmers 2011: 1).

Taken together, it is reasonable to suggest that to the extent that such loopholes are eliminated from the corpus of international trade will be the extent to which the positive effects of globalization can help balance the negative effects through increased commerce and vaue-added activities by developing nations. As the former U.S. treasury secretary John Snow said "Developed and developing countries should be prepared to reduce their trade barriers and subsidies." This should be imperative not only for the developing countries but also for the developed, as a way to foment development and reduce poverty. (Scolte 2000: 312).

Figure 4

Figure 4. Global Income Distribution

Source: Held 2004

Unfortunately, the rising tide of globalization has not raised all boats equally, and many developing nations continue to suffer the adverse effects of globalization rather than experiencing the positive outcomes that can be achieved. In fact, it would seem that as the world's poorest citizens become poorer, its richest citizens are becoming even richer. As can be seen in Figure 4 above, 20% of the world's richest citizens receive fully 75% of the income while the 20% of the poorest citizens receive a miniscule 1.5% (Held 2004). Unfortunately, these trends do not appear to be shifting and in some cases even appear to be getting even more pronounced. For instance, Held emphasizes that, "One of the main problems faced by the poor countries are the hard economic criteria the western States require in economic agreements, consequently some children in Africa have to pay for their primary education" (2005: 196). The point at which these processes began accelerating roughly corresponds to the rise in America's hegemony vs. The failing Soviet Union during the 1980s, a period also marked by innovations in telecommunications and transportation that further facilitated international trade. The combination of these innovations and global economic polices have resulted in even more global income for the world's richest citizens, largely at the expense of the world's poorest citizens. For example, Pieterse reports that, "Global inequalities have increased most since 1980, the growth of extreme poverty coinciding with an explosion of wealth. Economic integration therefore does not mean a greater or an equal share of wealth" (Pieterse 2002: 37). Consequently, it is apparent that not all of the effects of globalization on the developing nations of the world have been positive, and in some cases these effects have worked to place emerging nations at even greater economic disadvantages. Proponents of globalization argue that in time, these disparities will be eliminated as developing nations gain the expertise and experience they need to add value to their products and services rather than serve as mere harvest-based economies for the world's raw materials. It is these same proponents that are already enjoying the full measure of benefits from globalization who occupy the top tiers of the economic pyramid, though. The fact that just a few dollars a day more could alleviate the massive suffering that exists in many developing nations makes these trends all the more disturbing. Indeed, approximately 200,000,000 people have died just since the end of the Cold War from starvation that could have been avoided by even very modest increases in per-day income (Held & Kaya 2007; Pogge 2001; Cornia 2004).

With respect to developing countries, the existing empirical evidence indicates that globalization in the form of financial liberalization rather than trade and technology are both significant factors in contributing to the increased inequality in developing countries during the last two decades; there remains a lack of basis, though, to believe that the contribution of the other relevant factors such as social norms, labor market institutions, unions and minimum wage policies, macroeconomic conditions are less significant in understanding the demonstrated distributional changes that have taken place in poor countries during this period (Cornia 2004).

Perhaps the most glaring example of economic inequalities in the 21st century is the enormous disparity between the very rich and the very poor. In this regard, Weissman emphasizes that, "There is something profoundly wrong with a world in which the 400 highest income earners in the United States make as much money in a year as the entire population of 20 African nations - more than 300 million people" (2003: 9). Global inequalities persist at staggering levels. The richest 10% of the world's population's income is approximately 117 times higher than the 10% that occupy the poorest tier, representing an enormous increase from the 1980 ratio when the income of the richest 10% was approximately 79 times higher than the poorest 10% (Wiessman 2003). Moreover, when the burgeoning economic powerhouse of China is excluded from this analysis, the disparities between the richest and poorest become even more pronounced (Wiessman 2003). According to Wiessman, "The income ratio from the richest 10% to the poorest 10% rose from 90:1 in 1980 to 154:1 in 1999. Despite these numbers, there is a significant debate among economists about whether overall global inequality is growing in the era of corporate globalization. That is due to the influence of China and India, huge countries which have been growing (very rapidly, in the case of China) while most of the developing world has been stagnant or shrinking economically and most of the rich world has been growing slowly" (2003: 9). It is apparent that the acceleration in globalization is being match by a corresponding acceleration in poverty among the poorest nations of the world, but whether this is a purely cause-and-effect relationship remains nebulous. In this regard, Wiessman advises "In most parts of the world, inequality within nations is growing - this is true in the rich countries of the United States and the European Union, most (but not all) of the transition economies of the old Soviet bloc, China and India - or persisting at very high levels, as in Latin America and Africa" (2003: 9). The cause of this economic malady, Wiessman (2003) argues, is the international community's use of the dynamics of unregulated global financial and other markets as well as organizations such as the WTO, IMF and World Bank to further their interests at the expense of the already downtrodden. While a case can be made for this argument (and a number of authorities do so), Wiessman is quick to point out that there are other forces involved in exacerbating existing disparities between the global rich and poor. In this regard, Wiessman emphasizes that, "There are other factors at work as well, most importantly domestic power struggles over everything from national tax policy to corruption to decisions over investment in healthcare and education. And not every aspect of corporate globalization pushes in the direction of more inequality. For example, despite the many and varied hardships corporate globalization imposes on women, in many circumstances it may open up opportunities for independence and economic self-sufficiency that traditional arrangements denied to women" (2003: 10). In sum, though, Wiessman concludes that the lion's share of the blame for these global economic disparities can be placed squarely on the developed nations of the Western world: "But these caveats notwithstanding, corporate globalization in many ways does generate, contribute to and reinforce rising and persistent grotesque inequalities, both between and within countries" (Weissman 2004: 9).

Table 1 below describes several of the mechanisms that operate to generate, contribute to and reinforce global economic inequalities.

Table 1

Mechanisms by which global economic inequalities are sustained

Mechanism

Description/Function

Financial liberalization and economic instability

Over the last decade, the International Monetary Fund and World Rank have pressured countries to remove restrictions on capital flows. The deregulation of the financial sector has made it much easier to move money into developing countries. In much of Asia and Latin America, and in Russia, foreign investment funds have poured money into short-term investments in various financial instruments. Capital flows to developing countries rose from approximately $2 billion in 1980 to $120 billion in 1997, a jump of 6,000%.

Debt

The developing countries collectively owe $2.3 trillion to foreign creditors. Sub-Saharan African nations owe more than $200 billion to foreign creditors. Developing countries must pay interest on these loans and pay back the principal.

Elevated interest rates

In an era of globalizing financial markets, the very high interest rates pursued by the U.S. Federal Reserve in the 1980s meant that the rest of the world would be forced to adopt high interest rates as well. Although rich countries have steadily reduced interest rates over the last decade, globalized financial markets have led developing countries to maintain high rates. Given the greater risk in developing countries, free-flowing capital demands a higher rate of return. Particularly in the wake of financial crises or near-crises, developing country interest rates have risen to extremely high rates - all in an effort to keep capital from fleeing. On top of these market demands comes pressure from the International Monetary Fund on developing countries to maintain high interest rates, and not to take steps that could stem capital flight while enabling interest rate reductions. Under such pressures, the new Brazilian government of Lula is maintaining interest rates of 26%. The impacts of high interest rates on inequality - both between and within countries - are severe.

Trade liberalization

Trade liberalization has heightened differences among wage earners. Unskilled workers in developing countries and industrialized countries alike have been particularly hard hit by international competition. The UN Conference on Trade and Development (UNCTAD) reported in its 1997 Trade and Development Report that "in almost all developing countries that have undertaken rapid trade liberalization, wage inequality has increased, most often in the context of declining industrial employment of unskilled workers and large absolute tails in their real wages, of the order of 20-30% in some Latin American countries. The growing gap in wages between skilled and unskilled workers maybe explained in part by extremely intense global competition to perform unskilled work (think of the apparel and shoe companies that switch from sweatshops in Mexico to El Salvador to Indonesia to Bangladesh and China in constant search of cheaper labor).

Agricultural dumping and agricultural trade liberalization

Grain-trading companies from rich countries are increasingly flooding developing countries with below-production-cost food exports. Companies such as Cargill benefit from market arrangements (especially highly concentrated markets among the trading companies) that drive prices below the cost of production, and enable them to buy and export grains at super-cheap prices to poor nations. Sometimes the trading companies benefit from subsidies that are targeted just to exports.

Source: Weissman 2003, p. 10

In sum, then, irrespective of their differing views concerning the causes or implications of globalization, there is a growing consensus among economists that "global poverty is now the defining issue" (Suarez-Orozco & Qin-Hilliard 2004, p. 12) and the effect of these trends is discussed further below at it applies to worsening the incidence and severity of international terrorism.

How Inequalities Fuel International Terrorism

The product of the inequalities created by globalization is the widening gap between the rich and poor and the powerlessness of States to solve the problems of their society. As a consequence sections of such populations turn to new entities to solve their problems and start to shift their loyalties with the objective of changing the political situation. The problem is the States are unable to control the fundamentalist movements that emerge in response to a dynamic political situation. During the period from 1968 to 1989, there were 1,673 terrorist actions per year, from 1990 to 1998, this number rose to 4,389 terrorists actions per year. There is a clear correlation between the spread of globalization and the increase in terror attacks (Rand Corporation). These trends also demonstrate that terrorists are now capable of inflicting asymmetrically harmful attacks on their enemies (i.e., the Western nations and their allies), causing Booth and Dunne to suggest that, "We can conclude that the terrorism of the twenty-first century is a manifestation and a reaction to the unequal processes of globalization" (2002: 22).

The individuals that commit these acts have nothing to lose but they are not necessarily poor or uneducated. Since the end of the 1990's until now we have seen more educated people recruited by the terrorist organizations committing attacks especially suicide attacks, a recent example was the failed attack on a plane by a Nigerian citizen that had a degree from a British university. A study conducted by the Rand Corporation compares the characteristics of suicide martyrs recruited from Hamas and the Islamic jihad from Gaza and the West Bank that found that more than 60% of the terrorist's attacks during the second intifada were led by people with a high school education, compared with less than 15% of the population at large. The study shows that the skill level of the average terrorist rises when economic conditions are poor, and high unemployment rates enable terrorist organizations to recruit more educated people.(Economist 2010). Moreover, suicide terrorists of high quality are associated with more complex terror attacks, more important targets, and better outcomes for the terror organizations. It is also interesting to note that terrorists previously detained in Israel travel shorter distances to commit a suicide attack. Undoubtedly economic conditions affect the frequency and severity of future suicide terrorists (Economic conditions and the quality of suicide terrorism).

According to Bueno de Mesquita there is a correlation between economic conditions and the frequency and severity of the types of terrorism that can be expected in the future. Individuals have to choose to work in a market economy or to be absorbed by a terrorist organization. They are more likely to become a terrorist because of the decline of the State and industrial sector, which leaves them with no opportunities (de Mesquita). Global market capitalism contributes to the erosion of local economic structures, this translates to a lack of income; inability to marry, and so on. Consequently their existence becomes more fragile and they are more readily corrupted by the terrorist organizations. Involvement in such organizations gives them meaning in their lives (Kaldor 2003). In this regard, Apostolov emphasizes that, "Uneven development around the world may have been the factor that allowed extremist political entrepreneurs to mobilize support for their operations. Even if many terrorists are not directly driven by poverty, the inequalities of globalization feed a general anti-Westernism that is a seedbed for Islamism" (2004: 140). Finally, according to Hammer (2003), the terrorist attacks in recent years can be viewed as being a direct manifestation of the disparities created by globalization, but it is important to keep in mind that terrorism is viewed differently by its proponents:

These events have provoked widespread discussions that have circulated problematic and restricted definitions of terrorism which conceal and ignore its multidimensionality in regards to violation of individual and global human rights, including multiple forms of violence directed at massive numbers of disenfranchised peoples, especially women, children and the elderly. Moreover restricted definitions of terrorism generally fail to recognize that it often finds its basis in patriarchal codes which permeate and organize a variety of political, social, economic and cultural relations of everyday life. (Hammer 2003: 108)

Summary

The research showed that the innovations in telecommunications and transportation that have fueled the processes of globalization have also worked to further exacerbate existing economic disparities between the world's richest and poorest citizens. Many authorities were shown to believe that these disparities have been intentionally created and sustained through international economic policies that favor the West at the expense of the Global South. Finally, the research was consistent in showing that most observers believe that the incidence and severity of terrorism will continue to increase in the future unless and until these fundamental disparities are recognized and resolved by the international community.

Chapter 4: Case Study of the Gaza Strip

Background and Overview

The Gaza Strip is about 28 miles (46 forty-six kilometers) long and about 6-1/2 miles (8 kilometers) wide. The region's total area consists of only 360 square kilometers, with the Gaza Strip being bordered by Israel to the north and the east and Egypt to the south; the Mediterranean Sea border the strip to the west (Gordon, Gordon & Shriteh 2003) (see political map of the Gaza Strip in Figure 5 below).

Figure 5. Political map of the Gaza Strip

Source: http://news.bbcimg.co.uk/media/images/48800000/gif/_48800170_gaza_strip3_ map466.gif

A high fence completely surrounds the Gaza Strip, with Israeli troops patrolling the northern and eastern borders on a 24-hour basis, the southern border being patrolled by Israeli and Egyptian troops (also on a 24-hour basis) and with Israeli Dabur gunboats patrolling the Meditarrean Sea (Gordon, Gordon & Shriteh 2003). Access to the Gaza Strip is highly regulated. For instance, Gordon et al. report that, "There are only five official entrances to the Gaza Strip. Karni passage is for transferring goods to and from Israel. Palestinians can use only the Erez entrance in order to enter Israel and the Rafah entrance in order to enter Egypt. The other two entrances are for Israelis, mainly settlers" (2003: 3). Furthermore, the Israel Defense Forces and the Israeli security service (the Shabak) have sole discretion concerning which Israelis and Palestinians are allowed access through these entrances, including the entrance to Egypt (Gordon et al. 2003). The population in the Gaza Strip is relatively young, with more than half (50.4%) being under age 15 years reflecting a high dependency ratio in the region (Tabutin & Schoumaker 2005). Furthermore, the Gaza Strip also has one of the world's highest birth rates. According to Tabutin and Schoumaker, although estimates by the Palestinian Bureau of Statistics indicate a modest decline in the birth rates in recent years, the Gaza Strip remains one of the most estimates densely population areas in the world with a birth rate of about 4.5% annually (Tabutin & Schoumaker 2005).

With respect to residential localities in the Gaza Strip, the three predominant forms are: (a) rural (villages), (b) camps, and (c) towns; currently, there are eight refugee camps, 14 villages, and four towns situated in the Gaza Strip, with the respective population for these regions being grouped as followed:

1. 9% of the general population lives in rural areas (villages),

2. 3% live in semi-urban areas,

3. 53% live in urban areas (towns), and

4. 35% live in refugee camps, where Palestinian families immigrated after the 1948 catastrophe (Thabet & Vostanis 2005).

The origins of the Gaza Strip are traced to 1948 when the region was created as a political and geographical entity after the end of the first Arab-Israeli war that resulted from the creation of the Israeli state (Gordon et al. 2003). One of the major sticking points in the ongoing efforts to forge a lasting peace in this region of the world has been the stated goal of many residents of the Gaza Strip to eliminate Israel from the face of the earth, a commitment that was made early on and has remained firmly in place since that time (Gordon et al. 2003). For instance, Gordon and his associates report that the first Arab-Israeli war:

. . . was a result of the decision of the Arab nations bordering Palestine and of many of the Arabs living in Palestine to fight against the United Nations decision to establish a Jewish State on part of the land that had been the British Mandate in Palestine. These nations notified the world that they would annihilate the Jewish State if it were established when the British Mandate terminated. True to their word, five Arab armies began to invade Israel on May 15, 1948, when the British Mandate in Palestine ended and the British troops evacuated the area. These invading armies were supported by some of the Palestinian Arabs living in Palestine. (2003: 3)

Following its seizure by the Israeli Defense Forces, the Gaza Strip was administered by an Israeli military governmental authority, an act that carried inevitable and predictable consequences. For instance, Gazit reports that, "The imposition of a military government was required both by international law and by the need to prepare for the inevitable resistance of the population, which would emerge sooner or later. The end of fighting in the war did not end the state of hostility between Israel and the Arab world" (2003: 45). The origins of terrorism as a tool of change in the region during these formative years can be easily discerned from Gazit's observation that, "On the contrary, Israel had to rule over a hostile Palestinian population, which was immediately subject to provocations by political and military parties. Both the Arab States and the Palestinian organizations beyond the border strove to renew the armed struggle in order to thwart any Israeli attempt to encourage co-existence and orderly life in the Administered Territories" (2003: 45).