increases incomes on average, it does not guarantee that inequalities will
not increase and poverty continue. Trade liberalization also produces
‘adjustment’ costs as labour and capital shift to export industries. For exam-
ple, according to Action Aid, globalization for the Indian state of Andhra
Pradesh has meant agricultural mechanization, the consolidation of small
farms into large landholdings, contract farming by international agribusi-
nesses, the accelerated introduction of GM crops, and the impoverishment
of small and marginal farmers (The Guardian, 7 July 2001). Global compe-
tition has led to a growth in ‘flexible’ (i.e. precarious) employment condi-
tions. For example, 30 per cent of workers in Chile and 39 per cent in
Colombia have no contracts of employment, or less secure ones than before
(UNDP, 1999, p. 4). Only states can provide safety nets to protect vulnera-
ble people or manage the political conflict and crime caused by poverty
(Hirst and Thompson, 1999, p. 267). The costs of economic adjustments
also need to be moderated by retraining policies, health care, and macro-
economic policies that produce economic stability. Social policies are
needed to protect people not only in the context of changing labour markets,
but also of declining cultural diversity and the damage done to public serv-
ices by deliberate reductions in state resources. This calls for policies that
invest in skills, promote job-creation, strengthen workers’ rights, generate
tax revenues, improve the efficiency of tax administration, reduce military
spending, and support culture and the arts. The state is also needed to
remove barriers excluding people from the benefits of information technol-
ogy through policies in developing countries for group access, training, and
adapting technology to local skills (UNDP, 1999).
In the Third World the state continues to be the context for sustaining a
dignity restored after independence and for resisting outside pressure.
Attempts to make state sovereignty a reality reflect the need for political
communities to enjoy the dignity which comes from self-government and
resistance to external forces, even when such ‘interference’ is unavoidable
(Blaney and Inayatullah, 1996, pp. 86–7).
The state also has the leading role to play in environmental protection. The
complaint that globalization means more environmental degradation and
pollution is more against the consequences of economic growth, whether or
not generated by globalization. However, insofar as globalization stimulates
economic growth, whether this entails pollution depends on environmental
policies pursued by national governments, such as the removal of subsidies
from environmentally harmful activities, transparent environmental regula-
tion, and information and education about environmental problems (e.g. the
public disclosure of factory pollution, as in Indonesia and the Philippines).
130 Understanding Third World Politics