Globalization Debate Heats Up Again

Despite Economic Progress, Gaps Between Nations Widen

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DAVOS, Switzerland, FEB. 3, 2001 ( The latest gathering of business and political leaders at the town of Davos finished last Tuesday. The event drew vehement protests from anti-globalization groups, including a countersummit held in Brazil.

The World Economic Forum (WEF), its formal title, was founded in 1971 by Klaus Schwab to act as a think tank made up of business, political and academic leaders. It is now regarded as a symbol of the global economy. Its role is mainly as a forum for global leaders to be able to exchange views and attend talks.

A «closed club»?

Some consider the WEF a malign force. Some nongovernmental organizations accuse it of being a closed corporate club that secretly sets a global agenda that harms the environment and the developing world, said an article published Jan. 26 by Forum News Daily, a Web site set up by the Earth Times Foundation.

According to Peter Bosshard of the Berne Declaration, a Swiss-based nongovernmental organization, «The forum provides a unique club atmosphere for discussions and negotiations of the world´s political and economic elite, for setting the agenda of international public affairs. There is no legitimate role for this. The days of the private elite approach are over.»

In an effort to appease the opposition, this year organizers of the forum invited more leaders of nongovernmental organizations (NGOs) and included them as participants in some of the most prominent sessions. Of the approximately 3,000 participants, 58 were from labor unions, philanthropic organizations, or other NGOs. That´s up from 45 last year.

A coalition of protest groups was determined to disrupt the WEF, the Wall Street Journal warned Jan. 22. Last year about 1,000 people managed to slip past checkpoints set up by Swiss authorities to limit access to Davos. After the growth in violence by the anti-globalization movement, this time Swiss officials outlawed demonstrations.

The high point of the protests was Jan. 27. Police prevented the majority of demonstrators from reaching Davos itself, so radical groups vented their frustrations elsewhere. Unrest spread to other cities, especially Zurich, where 1,000 demonstrators gathered; four cars were set on fire during protests, Reuters reported. In Davos itself several hundred demonstrators defied the protest ban but were confronted by a huge force of riot police, who sealed off the streets.

The authorities´ tactics drew criticism from some of the NGOs participating in the forum. «Davos has become a fortress with ominous consequences for the future of global dialogue,» several of the groups said in a statement. In reply Claude Smadja, managing director of the World Economic Forum, defended the tough response. «They decided to break the law; they have to assume the consequences,» he said.

Globalization criticized

The WEF meeting renewed debate on globalization. Tanzanian President Benjamin Mkapa told leaders that the wealth gap between rich and poor countries was widening. «Further support for globalization and deregulation can only be built if we have something to show to our people in terms of concrete returns and rewards,» Mkapa said, according to a Jan. 26 report by Reuters.

India´s Finance Minister Yashwant Sinha said the present system of globalization was unfair in a number of respects. An example of this unfairness was provided by Brazil´s agriculture minister, Marcus Vinicius Pratini de Moraes, who pleaded for liberalization of world agriculture trade. He said Brazil could not compete with the $1 billion-a-day of farm subsidies granted by the United States, European Union and Japan.

In an article published Jan. 26 on the eCountries Web site, Rachel Holmes observed that economic growth in Latin America has not been fast enough to close the gap between rich and poor. Despite economic reforms during the 1990s, and bigger annual growth rates — 3.2% regionwide, compared with 1.6% in the 1980s — social inequalities haven´t narrowed significantly, Holmes noted.

In his speech to the WEF, Vicente Fox, Mexico´s newly elected president, called for an end to a world in which 1.2 billion people live on less than $1 a day, and where the gap between rich and poor continues to grow. Fox contended that globalization has created dangers which must be addressed, the Financial Times reported Jan. 27.

President Thabo Mbeki of South Africa called for a radical change in Africa´s relations with the West. Along with Nigerian President Olusegun Obsanjo, he made an appeal to allow the continent a greater say in its economic dealings with the rest of the world, the Wall Street Journal reported Monday.

Foreign investment in sub-Saharan Africa increased by 17% during the 1990s. But more recently, bankers are reducing the flow of funds, put off as they are by spreading wars, disease and what they see as poor political and economic management.

On the other hand, many Africans are angry at an «international community that demands too much, offers too little and does not spare the criticism,» says Marina Ottaway, an expert at the Carnegie Endowment for International Peace.

Mbeki´s plan, called «The Millennium African Renaissance Program,» will be revealed in its entirety and endorsed by the Organization of African Unity later this year. Its main aim is to shift the balance of dealings with multilateral agencies such as the World Bank and the International Monetary Fund away from powerful American and European interests. The plan calls for massive investment on terms set by Africans.

In defense of globalization

In an interview on Newsweek´s Web site Jan. 26, Klaus Schwab admitted that it was necessary to «to look at the divisions between haves and have-nots and to see what can be done to make globalization more compatible with the expectations of large sections of the worldwide population that may feel they´re not benefiting from it.» He was critical, however, of the violence of some protesters who are «anarchists and fringe political groups opposed to the market economy in general anyway.»

The Financial Times on Jan. defended globalization noting that it is the result of two distinct forces: reductions in the cost of transportation and communications; and liberalization of barriers to movement of goods, services, capital and labor.

Governments have chosen to integrate, affirmed the Financial Times, «because experience has shown that self-sufficiency is a sure route to impoverishment.» The paper insisted that globalization «is an opportunity, not a threat.» Given the benefits and pitfalls of globalization, what´s needed is serious debate, not anarchical protests, on what can be done to improve the lot of poor countries.

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