Globalization should be more global

September 26, 2000|By Trudy Rubin

PHILADELPHIA -- Forget the Frenchman who drove his tractor into a McDonald's. Ignore the protesters last week in Prague demanding that we "Ban the [World] Bank."

The debate over how to deal with the downside of globalization is finally getting interesting. Serious people are seeking concrete ways to counter growing inequality in an interconnected world.

This shift is healthy. For too long, debates over the impact of open markets have been dominated by a sterile squabble -- between those who claim the free-market gospel is sufficient by itself to produce prosperity and those who fear a wide open world.

Mercifully, this is changing. The so-called "Washington consensus" has frayed. I refer to the U.S. mantra that once insisted (pre-Asian crisis) that the same formula of rapid market opening could fit every developing country.

On the other side, the debate has progressed beyond the muddled messages of protesters against the World Trade Organization (in Seattle) or the International Monetary Fund and the World Bank.

Calls to end the WTO or "Ban the Bank" (the main lender to poor countries) do little to address real problems. At a time of unprecedented world prosperity, globalization creates both winners and losers. Critics need to recognize the upside while searching for ways to expand the numbers of winners.

Open markets have nearly halved the poverty rate in populous East Asia, according to World Bank figures, and had some positive impact in South Asia. But they have barely budged the rate in Latin America, sub-Saharan Africa and the Arab world. And poverty has risen sharply in Russia and other countries struggling to emerge from the wreckage of communist economic systems.

Most private foreign investment has flowed to about a dozen big emerging markets, such as China and Brazil. Meanwhile, many poor countries don't have the infrastructure -- or honest leadership -- to benefit from open markets.

Even in the wealthy West, the changes wrought by globalization make many nervous. The hero status of Jose Bove, the anti-McDonald's farmer, indicates French (and European) fears that an open world means U.S. domination.

And in the United States, where people are flush and unemployment is low, the middle class fears a changing work structure. Many worry they will lose health and retirement benefits, or have to shift jobs, or be forced to work longer, compulsory hours. In the midst of plenty, globalization causes free-floating angst.

What's new is the growing recognition of the need to face up to globalization's downside -- by U.S. politicians as well as many international economic leaders. "The majority view is that growth is good, but not sufficient," says John Sewell, president of the Overseas Development Council. "The argument is about what else is needed."

At home, Vice President Al Gore's proposals to help working families are a sign of this shift, as is George W. Bush's rush to make similar-sounding appeals. In an era of unprecedented wealth, the politicians seem to grasp that many Americans feel unfairly treated. They are receptive to ideas about enhancing education or health care or retirement benefits in ways that make them feel more secure.

On the international scene, the World Bank and United Nations development agencies are focusing on ways to help poor countries benefit from globalization.

High on the list:

An effort to ensure that double the number of poor nations receive debt relief (though this is no panacea) and to ensure that money saved goes to building up health and education.

A push to get the U.S. and Europe to lower their tariff barriers to imports from poor countries, especially textiles and agricultural products.

A focus on making development aid more effective -- for example, helping non-governmental organizations, fighting HIV/AIDS, mobilizing public and private sector groups to find concrete ways to narrow the digital divide.

An effort to persuade Congress to up the less than 1 percent of the budget allotted to foreign aid.

These practical goals provide an antidote to fantasies about "rolling back" globalization. They aim at more globalization for more people -- not less.

Trudy Rubin is a columnist and editorial board member of the Philadelphia Inquirer. Her e-mail address is trubin@phillynews.com.

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