Defending Globalization

Hardly anyone can dispute the World Bank's utopian motto -- "Our Dream is a World Free of Poverty." The big question is how to achieve such a lofty goal when the G8 summit, hosted by German Chancellor Angela Merkel, kicks off on June 6-8 at the Baltic Sea resort Heiligendamm.

Should the rich G8 industrial nations pour tens of billions of dollars into development aid programs? Or should they encourage greater economic integration through trade and investment, "globalization" in other words, to help lift the developing world out of poverty?

Defining globalization

The word "globalization" has gotten a bad rap according to experts, a catch-all term encompassing everything that is bad about go-go capitalism -- hedge funds that can crash the world's entire financial system, Asian sweatshops, and wealth disparities, in which a prosperous few condemn the masses to a life of misery.

Environmentalists, too, have gotten on the bandwagon, denouncing ecological destruction and the perils of greenhouse warming, another focal point of the G8 summit.

Multinational corporations, meanwhile, are blamed for undermining not just local subsistence economies, but indigenous cultures in Africa or Latin America as well.

The ubiquitous Coca-Cola logo and McDonald's arch, which penetrate the most remote corners of the earth, are globalization's visible signs, but also powerful symbols of American cultural hegemony.

In defense of capitalism and open competition

Proponents, however, say globalization is about raising the world's living standards through free trade, even though market economies inevitably create winners and losers.

"Everyone can benefit from open markets," said Rainer Hank, a German book author and journalist who has written extensively on the subject. "The G8 critics ignore the fact that globalization has triggered significant overall growth in the last 25 years."

The average per person income has doubled in the world since 1980, and 450 million people have emerged from absolute poverty, which the World Bank defines as a daily income of less than two dollars a day.

Hank pointed out that socialist China and bureaucratic India, which account for one-third of the world's population, are developing countries where economic growth has boomed due to market reforms, even though the income gap among individuals has widened considerably.

"That Chinese farmers are poor and entrepreneurs in the big city are rich can hardly be blamed on globalization," he said.

"Why should social and economical inequities be unfair?" Hank recently wrote in the Frankfurter Allgemeine Zeitung. "It's part and parcel of the human condition. This is not to be confused with the principle that everyone must be equal before the law, but we cannot ignore the fact that human beings are not all born with the same potential, nor do they have the same chances in life, because of gender, health, rich or poor parents, or just plain luck."

Globalization has left much of Africa left behind

Hank added that it's unfortunate that Africa is the one continent that has been to a large extent been left behind in the globalization process. But pledges of aid, aid and more aid are not the solution.

"Africa is a catastrophe," he said. "In the post-colonial era, Africa is again the 'white man's burden.' Development aid is well-intentioned, but makes beggars out of people. They become dependent, corrupt and it robs them of any initiative."

Hank added that Europe must do its share in stimulating growth by completely opening up its markets to goods from poor countries.

Other globalization experts who are free marketeers, such as the World Bank's Richard Newfarmer, say so many African countries are unable to enter the global village because they are still grappling with desperately needed infrastructure and civil strife.

Although the long-running bloodshed and genocide in places like Darfur have reduced Sudan to one of the continent's poorest nations, Newfarmer pointed out that Kenya, Tanzania and Botswana have experienced steady growth for the past decade, because those countries have benefited from both development assistance and commerce.

The debate is not aid vs. trade, but the need for both

"We need to get away from the aid vs. trade approach," he said. "Both are important. The question is how to make globalization work for poor people.

"If the G8 fulfill their pledges, they will be making an important contribution," Newfarmer added. "The US and Europe spend more on potato chips in a year than they do than on aid to developing countries."

There's even room for improvement in trade policy, since a further lowering of protective trade barriers across the board would provide Africa with more access to world markets, he said.

Globalization impacts on daily lives

Globalization is not just an economic process, but can positively influence politics and personal lives, according to Nayan Chanda of the Yale Center for the Study of Globalization.

"China, India, Vietnam, Brazil are countries that have improved living standards enormously in a short time," he said. "Now political changes are coming too, especially in China. People are protesting more vigorously now, such as dissent over government attempts to block and filter the Internet. Economic growth feeds political liberalization."

Even the fall of Soviet communism and the Berlin Wall were a consequence of the global impact of television, as those behind the Iron Curtain realized there could be a better life in other countries, say some experts.

Traditional family systems, too, are being challenged around the world, as more women work outside the home and stake a claim to greater gender equality. But there's room for improvement, according to Newfarmer.

"Opening up the economy means opening up to new ideas," he said. "The notion of globalization being good or bad is not terribly meaningful. The issue is how we can achieve better globalization."