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Time for Teach-Ins on Globalization

Robert S. McNamara was US secretary of defense during the Vietnam War and was president of the World Bank for 13 years. He spoke with NPQ just after the Genoa g-8 clashes.

NPQ | What do you make of the protests and protesters at the G8 in Genoa? What do they want?

Robert S. McNamara | Ninety-eight percent of the protesters are young people who are extraordinarily highly motivated, desiring to improve the welfare of the disadvantaged in the world, particularly in the developing countries in China, the Indian subcontinent or sub-Saharan Africa. But they are totally wrong in their judgment that globalization is somehow the cause of poverty, or standing in the way of reducing poverty. They are just totally wrong intellectually.

The problem in Genoa and back to Seattle is that a small group are anarchists whose only motivation is to destroy. They are the ones that create problems that lead to the violence.

NPQ | Surely, some of their criticisms are right?

McNamara | Yes, they are right in one important respect. There is one element of globalization-by which I mean the globalization of trade-that needs more attention: the dislocation of workers in the developed countries if their jobs go off to India or China. The nature of the globalization process is that the United States, for example, has a comparative advantage in high-tech with skilled workers, while India or China have an advantage in low-skilled labor-intensive products.

The differential is why there is trade in the first place-and it benefits both people. But there is a cost for some individuals.

When Nike or some textile factory picks up and moves from Europe or America to Asia, there is job loss at home. That is why, in Seattle, the trade unions joined the demonstrators.

In the developed world, we often do not provide adequate compensation, be it training or unemployment compensation, for job losses due to globalization of trade.

NPQ | What about debt relief, a key demand at Genoa?

McNamara | Well, debt relief is not related to the trade globalization process. Debt relief has been accepted in principle by the big lending countries if the country being relieved of the debt uses the savings to establish a foundation for addressing the problems of poverty-education, health care, etc. I strongly favor that.

However, debt relief will not be as great a benefit to the poorer countries as most people might think. Most of those debts have not been serviced. So, what good is relief from debts that you are not paying the interest for anyway? Though theoretically the credit rating of these countries can recover in the future, no additional funds are forthcoming in any immediate sense.

NPQ | Some critics say the Bretton Woods institutions established after World War II-the World Bank, the IMF-are no longer the right mechanisms to deal with the problems of globalization. Do you agree?

McNamara | Those who make that criticism are absolutely wrong. The World Bank and IMF make mistakes of course. I was president of the World Bank for 13 years, and I'm very proud of what we accomplished.

On balance, those institutions are doing more to advance the welfare of the poorest people in the poorest countries than any other institutions on the planet-and they are doing far more for the poor than the demonstrators in Genoa or Seattle.

In fact, demonstrators are weakening the only two institutions that exist to actually cope with the problems of poverty and the environment they want solved.

I wholly support the new emphasis at the World Bank on education and building institutions that foster development instead of just big infrastructure items like dams and bridges.

However, sometimes dams are needed for development if the displaced are taken care off-and the protests have made it almost impossible for the World Bank to get those projects built. To whose detriment? Of the poor.

This is illustrative of the adverse impact of the anti-globalization demonstrations.

NPQ | How should democratic governments respond to self-appointed non-governmental groups who are now a permanent fixture of all international meetings?

McNamara | If the majority of the protesters are highly motivated but wrong in their judgment, there needs to be communication.

The problem in Seattle was that (then President) Clinton said to the protesters: "You are right." But they weren't right. That should have been debated openly in Seattle, but it wasn't. And it still hasn't. Globalization of trade should be openly and completely debated. Those who favor it, as I do, have to explain how they will take care of displaced workers. Those who oppose it would have to explain just how they are going to lift the poor without more open trade.

In effect, to take a page from the anti-Vietnam days when I was a target of protest, today we need teach-ins by the power structure on the benefits of globalized trade.

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