Global Policy Forum

By David Crane

In the aftermath of the Sept. 11 terrorist attacks in the United States and the turmoil this has brought to the world, the future of globalization is in doubt.

The tensions and fear created by Sept. 11 may make many people turn back from further engagement with the world. But the bigger risk to a safer world is that we fail to continue to extend our global engagement. In particular, globalization has to be made to work much better for the developing world. While globalization is seen to benefit the advanced economies, it is not seen to be working very well for the people of the developing world, where most of the world's people live.

As Bradford DeLong, one of the brightest American economists, points out in a recent e-mail, "the gaps between rich and poor across the world are far greater than in any previous generation, and there are only a few muddied indications that the world will draw together over the next few generations."

Reducing that gap is one of the world's critical challenges. It is also vital if breeding grounds for terrorism are to be reduced.

Over the next 15 years, for example, the developing countries will add about 1.1 billion people, bringing their total population to about 6.1 billion or about 87 per cent of the world's population.

In contrast, the advanced economies will add fewer than 50 million people, bringing their total population to about 950 million.

It's convenient in rich countries like Canada or the United States to blame the failure of development on corruption and incompetence by governments in the developing world.

"But this is at best a half-truth," DeLong says. "Developing-country governments have on balance done a very bad job of climbing the cliff, but the industrial core has not let down many ropes for them to grasp." DeLong uses the example of Bangladesh to show how the rich countries actually thwart development in poor countries.

In the 1970s, Bangladesh was viewed as a country with little chance for success. But by the early 1980s, it had developed a competitive, export-oriented clothing industry. However, the free-market Reagan administration quickly imposed stiff import quotas on clothing from Bangladesh. Canada also restricts clothing imports from Bangladesh. "Today — 15 years later — the economic development of Bangladesh, Pakistan and many others continues to be hobbled by First-World quotas on textile exports that create unemployment and depress incomes," DeLong argues.

But the time has come when the advanced countries of the industrial core have to deliver on the promises of globalization to the developing world.

We have spent the past 50 years writing global rules that work for us. Now we have to make the rules work for them.

This is why, next month, when the world's trade ministers meet in Qatar and the world's finance ministers meet in Ottawa, they must give priority to the developing world. Failure to do so will have a high price. "When governments cannot provide the very basics — law and order, education, hospitals, famine relief, the promise of a job, the promise of a standard of living better than one's parents saw — false prophets who promise a Puritan paradise and the imminent arrival of the reign of God have an easy time finding followers for their message," DeLong warns. So, launching a new round of global trade talks under the World Trade Organization when trade ministers meet in Qatar is one priority, with the principal concern to make the global trading system work better for developing countries.

Foreign aid is also important. According to the World Bank, private capital flows to developing countries are falling sharply, so that it is "even more imperative that governments increase official assistance to fill the financing gap."

As the World Bank points out, foreign aid has fallen to just 0.22 per cent of the gross national product of the rich countries, a big decline, and well below the often-repeated commitment to achieve aid equivalent to 0.7 per cent of GNP.

The United States is the least generous donor but Canadian aid has fallen as well.

So when the finance ministers meet in Ottawa next month, they should make increased aid to the world's poor a top priority.

Reducing global poverty and bringing hope to the world's poor is one of our planet's greatest moral and practical challenges. If we are to gain the trust of the developing world and reduce global tensions — as well as build a safer and richer world for the next generation — then we have to respond to the challenge with resources and commitment.

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