The spring meeting of the Bretton Woods institutions, the International Monetary Fund and the World Bank in Washington, once again brought to question the state of health of the global economy. The event highlighted the phenomenon of what is perceived as a “guerrilla war” against global corporate structures controlled from Washington.
Late last year in Seattle, the meeting of the World Trade Organization, the newly created trade entity promoting globalization, failed against the backdrop of stubborn street protests. It may be too simplistic to say that anarchists, new radicals, the far left or terrorists were solely responsible for organizing the determined protests in the very heartland of capitalism.
The upsurge in street protests against economic globalization is multifaceted. The last few decades saw many promises made at global summits about preserving the environment and improving the lot of the world’s poor, women and children. Following the end of the Cold War, promises were made to developing countries to enhance aid, provide better education, improve hygiene, transfer technology and provide more financial support, and expectations ran high.
The hopes proved to be false, however. Notwithstanding the rosy pictures of the world economy painted by World Bank architects in their ritual world development reports, the world economy appears crisis-ridden and much of the Third World now feels marginalized.
Countries in Asia and Latin America have suffered economic trauma. Images of an Africa plagued by draught and HIV-AIDS are terrifying. The chasm between North and South, as well as societal gaps within the North itself, have been increasing, as has the technology gap. Little has been done to remedy environmental problems. There is little in the world that can be called order now.
Globalization, deregulation/liberalization and privatization have been the hallmarks of international economic maneuvers in recent years. Even with giant corporate mergers and transnational tie-ups, however, there is little order in the global economy. Price and exchange-rate fluctuations as well as the tumble in the world’s major stock markets are indicative of fundamental systemic flaws.
Economic self-interest, sans enlightenment, seems to set the order of the day. Volatility in world markets frequently sends prices and interest rates falling or soaring, often with devastating effects on poor countries.
The technological boom that turned into the Internet revolution brought immense wealth to the rich, making them richer still. In contrast, Third World countries are suffering from hunger, rampant crime, drug trafficking, disease and violence. There are also concerns about the devastating effects of gas emissions on the environment.
World policymakers must address these “problems without passports” with vision and perspective.
Peace may indeed be the bedrock of all human development, but the question of how to strive for it remains unaddressed.
Demands exist for the richer nations to forgive the debts of the poorer states, provide market access, share technology and give poorer nations a greater say in the use of international development funds. There is also a call for shifting more decisions from groups controlled by the rich nations, such as the IMF and the World Bank, to the United Nations to facilitate the creation of a new global “human order” aimed at reversing the growing disparities between rich and poor nations. The G8 summit in Okinawa, hosted by Japan, should address what was promised and what was delivered by the major global players.
The rhetoric of human development must be replaced by pragmatic policies pursued by the developed world. The promise of “globalization with a human face” must include concrete strategies to combat global hunger and famine, HIV/AIDS and environmental concerns. Feeding the starving and treating the ill certainly are, of course, a priority, but the deeper malaise underneath requires calculated action. Otherwise there would be little enduring benefit from a globalized international system. As for the developing world, the current “begging bowl” strategy must be replaced with a more moralistic, practical one that is spearheaded by good governance.
Welfare economics should not be seen as mere literary jargon. When it comes to development and life, the plea has to be for what is both moral and practical. The world has witnessed tremendous financial restructuring, but the prevailing regime appears to be one of repressed finance.
A greater poverty reduction/development strategy coupled with massive investment flows and reallocation of resources, including technology, to the developing world as well as equitable market access, are essential. A major effort must also be made to eradicate illiteracy and renovate Third World education systems.
As the world’s second-largest economy, a donor superpower and Asia’s only member of the “rich nations’ club,” Japan should use the upcoming G8 summit in Okinawa to highlight the global divide. Tokyo must play its part in balancing and shaping the future of the global economy and developmental assistance.
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