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Mercy Global Concern - 2003
Two Views of Globalization
Recently at Colombia University, a panel comprising Joseph Stiglitz,
Jeffrey Sachs, George Souros and Mark Malloch-Brown discussed
Globalisation and Inequality.
Jeffrey Sachs
- He presented a tableau showing that the issues of global inequality
are deeply structural -This inequality is deeper than ever before.
These structural causes must be addressed.
- Many unaddressed issues in the political, economic and cultural
areas are contributors to this inequality - 1/6 of the world's
population has a high income and 5/6 are living in poverty.
- We notice that this poverty is distributed in Africa, South
Asia, Southeast Asia and the Caribbean. This is not a random
distribution. It is not a North/South distribution but an ends
vs. middle, temperate vs. tropical.
- There is wealth on the coastal regions where international
trade routes are located; the interiors of Africa and Asia are
the poorest regions.
- In 7% of the land mass there is 60% of the wealth; the larger
economies are growing faster than smaller. They have larger
external markets.
- He looked at where the wealth is by country (he had a map
on an overhead) -more wealth in North America, Brazil, Chile,
South Africa, Western Europe, India, China and Japan [surprise
omissions were Australia and New Zealand].
- Globalization is not cruel to poor countries, but neither
is it going to save them. They must get connected to trade.
This raises questions about trade rules worked out by the WTO
that do not disadvantage poorer nations. Gave the example of
Deng Xiao Ping in China where the "workshops of the world"
are located on the coast of China. He saw China as a microcosm
of the global economy where we are seeing 150-200 million people
migrate from the interior to the coast.
- The rising tide of globalization is lifting 2 billion people
but it doesn't work where it doesn't reach. He calls this the
"Global Hotspot Theory"
George Souros used a narrower definition of globalization
- global financial markets.
- He dates globalization from 1980 - in the era of Margaret
Thatcher and Ronald Reagan, following the Soviet Empire collapse.
There was a similar period before WWII, but it didn't last.
He identified 3 kinds of inequality:
- inbuilt systemic inequality between rich and
poor, where the owners of capital are those who have benefited
from globalization of financial markets;
- between the centre and the periphery - where
the centre is defined as a country able to borrow in its own
currency and the periphery can not. This means in effect that
they cannot access financial markets because they don't have
strong enough domestic savings. There is serious inequality
and we need to change the way that international capital markets
operate.
- between countries with good governments and those with
bad governments. He said anti-globalization activists
are naïve because they ignore this issue of good governance
versus bad national governance, corruption etc. The Millennium
Challenge Account could be a step in the right direction but
he is not happy with the structure because there is too much
emphasis on opening the economy. He suggests an in-depth study
of Africa and claims that countries with natural riches often
have the worst governments e.g. Mali, Senegal, Angola, and Congo.
Joseph Stiglitz
- Globalization can make a difficult situation worse. East Asia
is an example of an export-led growth with access to technology.
So, managed growth can lead to a reduction of poverty.
- At the end of the 80s and the beginning of the 90s there was
pressure to liberalize capital markets, but rapid capital liberalization
has a high risk. Treasury pushed this capital liberalization.
But economic globalization proceeded more rapidly than other
elements - e.g. democratization, so it is an unbalanced globalization.
- Advanced industrialized countries make rules to their own
advantage - e.g. Latin America borrowed heavily in the 1970s
but in 1980 with the increase in interest rates, the debt burden
became unbearable.
- In the international economic scene it is only trade minister
who sits at the WTO table. Health, Development, Science minister
etc. are not present. So, decisions made by the WTO, which bind
all countries, are made from an economic, not from an integrated
development view. On the national scene the debate on debt includes
both debtors and creditors, but not at the international level.
Only creditors sit down to discuss the issues about it - this
is an unbalanced debate.
- IMF views deficits as devastating. However the Bush Administration,
as one influential example, is pushing deficits as good. There
is a link to inequality - the management of global inequality
causes problems.
- Higher volatility - asymmetry in global markets is an inequality
generator - terms of trade effects. Capital writes the rules
and this makes for inequality. There is a crying need to address
the gap between global trading partners at economic level
Mark Malloch-Brown - UNDP
- Using the analogy of tectonic plates, he said that countries
no longer have the luxury of falling back behind their national
walls, but they touch others too. Isolationism will not work.
- Using the image of tectonic plates of social policy, it is
not plausible to leave structural poverty the way it is. We
need a more robust international system to work with development
activities if we are to see the stable, prosperous world that
we are all interested in.
- He believes the boundaries of what constitute acceptable government
are ready to change. He claims that we are in the process of
a fundamental shift -e.g. as in West Africa and the terrible
tragedy of Nigeria which brought about by a high degree of corruption…
the US has made it clear that it is going to increase its dependence
on the oil of west Africa; the guerrilla movements financed
through oil resources set up the states to fail.
- We sow instability. We still live in a distorted global society
- where private goods take precedence over public goods. This
will become worse if the present round of GATS negotiations
proceeds with its intention to force Developing countries to
privatise public goods such as water as the condition of aid.
Conclusions:
There are deep structural problems, but these are not impervious
to human wisdom.
Globalization means the close integration of a country into the
worldwide market. So there is a need to have collective
action, which benefits all equally.
In landlocked countries, the challenge is to get connected.
US, the champion of free trade and no barriers, places punishing
trade barriers and tariffs which are higher than any others. So
the USA is making it the creation of a more level playing field
more difficult. A more effective and a more equitable multilateralism
must underpin decisions of the future. The power players should
be ready to moderate their behaviour in the economic decision-making
bodies for the benefit of all players.
One week later Mary Robinson addressed "An Ethical and
Humanitarian Approach
To Globalisation". She has recently completed her
term as UN High Commissioner for Human Rights (UNHCHR).
Now she is involved in creating a think-tank entitled "Ethical
Globalisation Initiative"
She said she is more worried now about the state of the world
than ever before. She stressed that women have a crucial role
to play in reshaping the world of the new millennium. Women analyse
differently from men. So both analyses are needed.
In her role as UNHCHR she sought to mainstream a human rights
framework into the whole of the UN agenda. Now, she asserts, there
must be a mainstreaming of a HR framework into the whole globalisation
debate.
Through the new initiative Ethical Globalisation Initiative (EGI)
she aims to bring a Human Rights approach to 3 major target areas
that affect the life of the world:
- Access to health and attempting to address the pandemic
of HIV/Aids which is a massive crisis, the dimensions and
impact of which have not yet been realized or acknowledged.
The providing of access to treatment must be done without stigmatization
or discrimination.
- The waves of migration caused by displacement and the
creation of ever more refugees. Lacking an overview, this human
tragedy is also open to all forms of abuses, trafficking etc.
How can we bring Human Rights to bear on the treatment of people
who have no papers of identity? We have to find more constructive
ways to offer some hope to the dislocated and to speak to the
anxiety and panic of the receiving countries.
- The mono-cultural dominance, which is the driver of
economic globalisation. Mono-culturalism does not respect
of diversity.
She aims to interact with the corporate world,
with research groups and with activists.
Internationally it is a very rough time for minorities, indigenous
peoples, and women. In an increasingly globalising world HIV/Aids
knows no borders; Poverty has a woman's face.
- Post September 11, 2001, there is a very different climate
for Human Rights.
- There has been a surge of fundamentalism.
- Military language has become the norm
- There is a shared universal experience of insecurity.
- A concerted attempt to break resistance to the corporate-driven
domination of the rest of the world by rich, developed countries.
- A mono-cultural, monolithic view of life and solutions for
dealing with terrorism.
- In the face of these trends we must "harness togetherness"
to address the crisis of imagination.
The phenomenon of globalisation has transformed the way we relate
to each other. Her conclusions are similar to those of the Columbia
discussion of the week before.
- Human wisdom and a recovery of shared imagination exercised
in a harnessed togetherness for the benefit of all must
be the way into the future.
- Only an ethical and compassionate globalisation
can survive into the future.
Deirdre Mullan RSM
Mercy Global Concern
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