We must also acknowledge that globalization benefits people unevenly. It produces losers as well as winners. But we can and should take measures to ease the pain. And, when economic changes have a significant and growing international dimension, we need not only appropriate national policies but also well-functioning global economic and financial institutions and internationally agreed rules and regulations. Globalization and poverty A rallying point for many critics of today's global economy and of the IMF is that while the advanced countries are becoming more and more prosperous, extreme poverty remains prevalent in many parts of the world.
Many critics believe that globalization is somehow responsible for the plight of the poor.
Many critics have characterized globalization as a race to the bottom in which the free play of market forces drives wages and labor standards in the poorest countries even lower as the latter attempt to attract foreign investment. Some critics even question the benefits for the poor of policies aimed at stimulating economic growth. The notion that trade and economic growth aggravate poverty is unfounded, however. Experience has confirmed time and again that trade generally benefits the poor, by forcing economies to become more efficient and boosting growth, which are key to raising living standards. Conversely, restrictive trade policies tend to dampen productivity and growth and worsen conditions for the poor.