Because of its sheer force and power, many people are wont to think that it can automatically eradicate poverty. Economic, political and social factors within the domestic arena play a big part in ensuring that inequality and poverty are addressed with sustainable solutions.
This paper argues that without internal governance and social stability in the domestic arena, globalization can exacerbate rather than mitigate the problem. It will argue this point by examining the case of Brazil, and why, despite its large land size and the investments in bioethanol, the economic benefits have yet to trickle down to the poor and inequality and poverty remain to be pervasive. This paper will proceed as follows: first, it will give a brief background of globalization, second, it will give a brief overview on Brazil, third it will provide an analysis of the internal political and social conditions in the country that explain why the benefits of the globalization are not spread equally across the population.
Globalization did not take place by happenstance. It was the culmination of a long process that began after the end of World War 2 in what was called the Bretton Woods Agreements. The Bretton Woods Agreements resulted in the creation of three organizations: the International Monetary Fund or IMF, the World Bank, and the General Agreement on Tariffs and Trade or GATT. (ibid, page 2) Powerful countries converging around a specific set of economic interests came together to hammer out the specifics and details of these institutions that they believed could shepherd the world out of the wreckage of the Second World War and out of the specter of Communism, and create a new world order based on the Capitalist framework. The United States played a lead role in making this all come together.