2/1/02

IRONIC REVERSAL: POOR WORLD NOW FAVORS GLOBALIZATION, WHILE RICH HAVE DOUBTS

By Jagdish Bhagwati

Jagdish Bhagwati, a key critic of globalization, is a professor of economics and political science at Columbia University.


NEW YORK -- Over the past year, there has been an ironic reversal of views on globalization. There is more enthusiasm for it in the poorer countries than in the richer ones. This is reflected in the first "global public opinion poll" commissioned by the World Economic Forum.

In most of the urban poor and developing world -- except countries such as Turkey and Argentina, where there has been an immediate financial crisis -- public opinion has turned in favor of globalization as something positive for individuals and their families.

The attitude in countries from Mexico to Nigeria to even Kazhakstan seems to be that they have tried anti-globalization and it hasn't improved their lives. In urban China, 83 percent think globalization will make their lives better; in India, 69 percent think so. They expect that market reforms, freer trade and foreign investment with the rest of the world is for the better.

In the rich world, on the other hand, doubts have grown about job loss due to freer trade and outflows of investment to the developing world. This no doubt accounts not only for the emergence of anti-globalization protests, such as the one in Genoa, but the general public sympathy for them, as well.

In Great Britain, the United States and Canada, nearly as many people think globalization will cost them jobs as think it will be beneficial. In France, 72 percent think unemployment will get worse because of globalization; in Germany that figure is 70 percent, and in Spain it is 48 percent. Italy and the Netherlands stand out as the two developed countries that think
employment will improve, not worsen, as a result of globalization.

One has to be careful, however, in defining globalization. While market reforms and more openness in investment and trade have gained sympathy in the poorer world, there is still a view -- correct as far as I am concerned -- about the enormous destructive potential of unregulated short-term capital flows that can reverse the fortunes of a country in world markets at the whim of investors and traders.

It is important to identify this culprit, lest the anti-globalization sentiment latches on to the wrong target. In Argentina, for example, much of the protest and criticism have been aimed at the liberalization of markets -- which have, in fact, been largely successful-- when the problem is actually exchange rates and capital flows.

(c) 2002, Asharq Al Awsat/Global Viewpoint. Distributed by Los Angeles Times Syndicate International, a division of Tribune Media Services
For immediate release (Distributed 2/1/02)