Why a section on globalization? This blog has attempted to address topics and information in regard to Caracas, within the last ten years or so. However, because history is so relevant to the state of contemporary times, there has been some overlap. Globalization has definitely been happening for more than the last ten years, but other than the advent of the computer and the internet, globalization has never taken place at a more furious rate than it is today. 7 years ago, it would have been difficult to connect to a wireless connection in nearly every residential and commercial building—today, wireless is ubiquitous. Moreover, 7 years ago I would have had to call it a “wireless internet” connection for many people to understand what exactly was meant. Not until the Apple Iphone (unveiled 4 years ago) were we able to do so much from anywhere with such ease. At any rate, I am explaining globalization from a technology savvy consumers perspective, but in the case of Caracas, today I can read the Caracas local newspapers, buy shares of a company operating in Caracas, read translated twitter updates (Chavez hates twitter)from Caracas residents, and read and comment of the blogs of Venezuelans, from my computer at home in Canada. This is how I know we are extremely connected and that we are sharing culture, ideas, and status updates.
A note in regard to globalization and Twitter: the impact of technology and social media has recently made the president very angry. Students have been using Twitter to coordinate their protests much more effectively and opposition groups have used Twitter to denounce Chavez and get away with it. Unlike traditional mass media, which is merely banned or cut off, Chavez has fought back by declaring that “’using Twitter, the Internet (and) text messaging’ to criticize or oppose his increasingly authoritarian regime ‘is terrorism.’”[1] He says this when there is a facebook group with approximately 80,000 members (and growing) titled "Chavez esta PONCHAO!" ("Chavez, you struck out!").[2] By this saying, the members mean that he is finished, he has not done a good job and that he should step down from the presidency. I am curious if Chavez actually thinks that those 80,000 members and all the people using Twitter are terrorists…I doubt that. Chavez is just angry that--thanks to globalization and innovation--people in Caracas and Venezuela are able to freely express their opinions to each other and the world, and denounce the government anonymously.
There are a number of characteristics that make Caracas a unique city within Venezuela. It is the capital, the center of government, has many national and international business connections. It has technologically advanced economic activities and has the role of a nationwide service node.[3] Yet, even as a city that is part of the hierarchy of global cities and is taking part in globalization, Caracas is still characterized by marginalization and exclusion of portions of society.
Due to globalization the formal economy in Caracas has expanded and become increasingly interconnected. Today there are luxury hotels, massive shopping centers, a headquarters for the Stock Exchange, buildings for banks and corporations have been built, and the telecommunications system is highly advanced.[4] As an effect of the globalization process, transnational corporations located in Caracas cultivate the localized development of legal and accounting services.[5] Thus, globalization in Caracas has fostered burgeoning high technology, professional and financial sectors, leading to a sizeable amount of high paying jobs for skilled workers; however, the number of jobs in this highly formal sector of the economy is very small relative to the number of citizens in Caracas (3.15 million)[6]. The small number of high paying jobs only adds to the atrocious distribution of income:
Source:[7]
The above graph shows that the wealthiest 10 percent of the population thrive with 48 percent of the wealth, while the poorest scrape by with 10 percent. This graph is a generalization of all Latin American countries, but because Caracas is a capital city--highly susceptible to, and affected by globalization--and is known for its small middle class, one can deduct that the wealthiest 10 percent in Caracas control a certain degree more than 48 percent of the wealth. For a clarity’s sake, a study by Briceño-León (2005) revealed that the income disparity between the classes in 1970 was: the top 1 percent of the population’s income was 363 times that of the poorest 1 percent and by 1995 the ratio had risen to 417.[8] For the poorest of the poor to become poorer than they already are is not usually possible because these are the people with extremely little, to no income at all. Therefore, the only way for the income gap to increase is for the wealthy to become wealthier. In this case it is not poverty that grew, rather, inequality between the classes increased.
The influence of globalization in Caracas has lead to a restructuring of production and consumption[9]; those who are forced to deal with the concomitant consequences of globalization are the poor. While some of the fragments of the population are able to fully integrate into the global economy, others are excluded and become connected to the economy of poverty. Just as growth in the formal economy occurred because of globalization, employment in the low-productivity, low-income informal sector has also increased[10], but social mobility is reduced:
“Different forms of self-employment substitute for the contraction of jobs in the formal sector, the traditional channels of social mobility through education and employment lose their effectiveness, and the formerly adequate incomes from a number of occupations and professions are eroded.”[11]
As the relative income of society increases from the effects of global integration, the real wage of workers—that is, the worth of their money--decreases because when parts of the population have more money to spend, prices rise. In this type of social environment, education for the lower classes of society becomes difficult. Education becomes more expensive and they must work more hours to afford the same living standards they were used to before real wage decreased. The time spent working takes away from their time to spend on education therefore this traditional route of social mobility becomes much more difficult and their poverty is reinforced in this way.
The spatial arrangement of Caracas coincides with the class stratifications, but one of the indirect effects of globalization, is that the expansions of the city are physically shifting the classes around, and out. The center of Caracas has seen land values increase drastically as space becomes increasingly saturated and transnational corporations and businesses that pay top dollar for the central real-estate.[12] The core has become an alcove for the elite. This has forced many of the cities inhabitants to leave the expensive Caracas Metropolitan Area (CMA) and move to one of the four peri-urban areas located in the Caracas Metropolitan Region (CMR).[13] Thus, population growth in Caracas has been decreasing, while surrounding areas are expanding at a quickening rate because of more affordable housing and highways and public transportation systems. Within the CMA there are with the best public utilities and services, the most extensive infrastructure and/or the most comfortable climate.[14] Although the population that moves to the CMR periphery can afford a better standard of living than they could in the CMA, they lose the benefits of the city, not to mention the advantages of not having to commute long distances. In the following picture, the dark areas are the four peri-urban areas of the CMR; for many, the commute to Caracas for work or medical reasons etc. would be quite long and would cost them time and money.
Source:[15]
The changes brought about by globalization such as, the informalization of labor and falling real wages have increased social inequality in Caracas. This inequality is reinforced as the city fragments into multiple unequal territories; the fragmentation “is reinforced by each urban segment’s functional specialization depending on its greater of lesser articulation to the global network of economic relations.”[16] These spatial segments embody the social differences and increasing intricacies within society. The closer economic relationship a segment has in the game of globalization, the better off it is financially, and if a segment of the city is not functionally useful to the economic developments it becomes the underdeveloped and unkempt segment of the city. The wide range of differences that develop between these separate segments is why some have called them “multiple cities”.[17] They become so easily contrastable that these segments can be considered different cities. For example, think of a large metropolis, there are always areas that are more beautiful and safer than other areas in the same city. In Caracas, the contrast between city segments is extreme, some are beautiful, others are ugly. In essence globalization has gentrified Caracas; the core has become the residence of the wealthy and the peri-urban areas (black areas in above picture) become the residence of the vulnerable groups and the “new poor”, who have recently been displaced from the city. Once the “new poor” are displaced, they become worse off than they were before because their distance from the center of Caracas makes it more difficult to be part of the globalization and thus, they become systematically poor. Not only does the social order, which they likely already deal with, hold them back, but also the socioterritorial order and segmentation becomes a barrier and weakens their relationship to the globalized economy, with its epicenter based in the core of Caracas.
[1] Amar Toor, "Twitter Undermines Hugo Chavez's Media Takeover." AOL SWITCHED, February 4, 2010. http://www.switched.com/2010/02/04/twitter-undermines-hugo-chavezs-media-takeover/ (acessed April 19, 2010).
[2] Ibid.
[3] M. Lacabana and C. Cariola, "Globalization and metropolitan expansion: residential strategies and livelihoods in caracas and its periphery." Environment and Urbanization 15, no.1 (April, 2003), 66, http://www.eau.sagepub.com/cgi/reprint/15/1/65.pdf (accessed March 28, 2010).
[4] Ibid.
[5] Ibid., 68.
[6] "Cities Of The World: Caracas, Venezuela, South America." City-data.com, http://www.city-data.com/world-cities/Caracas.html (accessed April 20, 2010)
[7] Roberto, Briceño-León, "Urban violence and public health in latin america: A sociological explanatory framework." Cadernos De Saúde Pública 21, no. 6 (2005), 48, http://www.scielo.br/scielo.php?pid=S0102-311X2005000600002&script=sci_arttext&tlng=en (accessed April 15, 2010).
[8] Ibid., 50
[9] M. Lacabana and C. Cariola, 65.
[10] Ibid., 66.
[11] Ibid.
[12] Ibid., 67.
[13] Ibid.
[14] Ibid.,68.
[15] Ibid., 67.
[16] Mark Amen, et all., Relocating Global Cities: From the Center to the Margins (Rowman & Littlefield, 2006), 181, http://books.google.ca/ (accessed April 15, 2010).
[17] Ibid., 182.
Top image Source: Unnamed Author, The Consequences of Globalization, Katrina Hindman, December 18, 2008 http://khindman.wordpress.com/ (accessed April 20, 2010).
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