Globalization, Done Right,


By Peter Woicke

International Herald Tribune
September 20, 2000

We have heard a lot of debate recently about globalization from both detractors and promoters. But we tend to hear very little from one group of people affected by globalization: those in developing countries who are running businesses and providing jobs - sometimes to thousands of workers, sometimes to just a few.

All these people are part of the developing world's burgeoning marketplace. The businesses range from sophisticated, technology-driven operations to dirt-floor factories where dough is draped over bamboo rods to make noodles. Entrepreneurs of the developing world and many of the people they employ see globalization as their path out of poverty.

An insurance company president, rose-grower or cabinet-maker in Uganda will tell you what it is like trying to do business where the power can shut off at any time. Their scarce and unreliable electricity supply means that Ugandans consume about 1/200th of the amount of power used in developed countries, with all the implied privations in human and economic terms.

But there are prospects for a better future. A multinational power plant builder wants to work with international organizations to construct a hydroelectric dam that will benefit the people and not harm the environment. Ugandans do not see that as a threat of domination by foreign corporations. They see it as bringing welcome investment, expertise, technology, training, protective controls - and the opportunity to build their own lives and businesses.

Globalization gave a banana grower in Ecuador the markets in Russia and China that have turned his farm into an integrated agribusiness with packaging, fertilizer, transport operations and even a new container port. But his proudest achievements are the schools that the profits have financed around the banana groves, the tropical rainforest he has protected as a scientific preserve and the international award he just won for environmentally friendly business practices. It is global competition, he will tell you, that spurred him to set the highest standards for social and environmental responsibility. In his case, globalization was not a race to the bottom.

The International Finance Corporation, the part of the World Bank that invests in private enterprises in developing countries, works to tap the potential of globalization. We have worked with nongovernmental organizations who rightly insist on sensitivity to the environment and indigenous cultures, and more equitable distribution of rewards.

In large part, the corporation owes the strong environmental and social standards that it attaches to all its investments to extensive discussion with - and criticism from - activists. As we elevate our standards from "do no harm" to an even stronger level of responsibility, we welcome continuing dialogue with local and international activists.

We have also cooperated with the biggest mining corporation in the world to resuscitate the copper industry in Zambia. We have invested in an aluminum smelter in Mozambique. We have helped nonprofit organizations in poor countries convert themselves into banks that lend to small business.

The corporation financed creation of a network of entrepreneurs in South Africa. It runs programs for Ukrainians to learn how to conduct business to international standards of accounting and corporate governance. It has invested millions of dollars to raise the sophistication of banking services in Latin America and lower the costly leakages in Manila's privatized water supply.

We recently approved an investment in a controversial $3.7 billion pipeline through Chad and Cameroon because World Bank Group involvement will seek to ensure that resource development is matched by social development. We believe that the very real concerns about the environment, human rights and corruption were best addressed by leveraging the prospect of prosperity, rather than depriving some of the poorest people in the world of a better future until all the best conditions are in place.

Some might cast these efforts as corporate welfare. We see them as investment to reduce poverty and improve people's lives. Globalization can bring the people of Uganda and Chad the resource development that will give them a better chance of a future free of poverty. Globalization is what can help the business owners and would-be industrialists change the label of their countries from developing to developed.

If critics listen to the people of developing countries and talk to both entrepreneurs and employees, they will hear that globalization - done right - is what is wanted and needed.

The writer is a managing director of the World Bank and executive vice president of its private sector arm, the International Finance Corporation.

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