Global Policy Forum

Pace of Globalization Quickening: Process Will Be as Influential as Democracy Movements of the Last Century

Globalization will change the world as radically in the 21st Century as democratization changed it in the 20th Century, says the State of the World Forum, a non-profit organization working for sustainable globalization.

The group's first-of-its-kind review of the comprehensive effects of globalization shows that its pace has increased dramatically in recent years and now affects virtually all of the world's six billion people.

However, the benefits of globalization have not reached everyone equally. While some people, particularly in the developed world, have enjoyed economic, educational and cultural gains from globalization, many others who are poor or live in the developing world have been left behind and are becoming increasingly marginalized.

The State of the World Forum will convene its fifth annual meeting in New York from September 4-10, 2000. The event will take place concurrently with the UN Millennium Summit and will have as its theme, "Shaping Globalization: Convening the Community of Stakeholders." Forum 2000 will be the first meeting to include all of globalization's stakeholders, from major business leaders and heads of state to the organizers of the WTO and World Bank protests in Seattle and Washington, D.C. The goal of the Forum will be to create a dialogue and develop working relationships among these disparate groups.

The State of the World Forum analyzed scores of trends and projections compiled by the United Nations and other agencies in economic development, international trade, communications, culture, labor, environment, health, human development and religion.

Many of the indicator groups showed historically-unprecedented tendencies toward the increased interaction of peoples, governments and businesses across international borders during the last 20 years, demonstrating the tremendous economic, political and social effects of trade liberalization and the recent internet and communication technology revolution.

The speed of information flows has increased fluctuations in stock markets around the world and influenced opinions toward global issues in real time. The percentage of people with access to telephones, television, the Internet and radio is at its highest level ever, empowering many with information they never had access to before.

"Globalization has become a powerful force to be reckoned with," says Jim Garrison, president of State of the World Forum. "It is fundamentally changing every aspect of our lives, from the way we conduct business to the way we define our communities. It has as much power to change lives as the move from monarchy toward democracy that took place in the 20th Century," he continues.

The spread of democracy has been widely credited for increasing human rights across the world and opening doors for economic and human development. Like globalization, the democracy movement was also partly due to advances in communication technology. Decreased printing costs and the proliferation of radio, television and telephone services, for example, empowered communities to better share information, which ultimately led to popular organization.

In 1900, not a single country in the world had universal adult franchise (voting rights for all adults). Today, fully 70 percent of countries have universal adult franchise, according to the United Nations Development Program.

"The trick will be to make sure that globalization has as positive an effect on the planet as democratization has had in the last 100 years," Garrison continues. "A lot of what globalization has to offer is good, but unless we work to protect all of its diverse stakeholders, we are in danger of leaving most people behind."

The analysis identifies several global trends, many of which have never been observed before. Examples include:

"There is no question that the economics of globalization have been incredibly beneficial to many people around the world. The Internet and advances in telecommunications have improved the livelihoods and access to information of millions," Garrison says. "But globalization comes down to much more than just communications and economics. We must look at it in terms of workers' rights, the environment, culture, health, ethics and development as well.

"We believe that by expanding the definition of globalization to include these issues, we will increase dialogue and understanding between diverse groups and better ensure economic and social benefits for all," says Garrison.

In the developed world Ð particularly the United States, Western Europe and developed Asian countries Ð the communications revolution has allowed residents to enjoy increased speed and efficiency of business, interactions with colleagues and markets outside of their political borders, educational opportunities and more.

However, the changing economy has also left many people in these countries behind. The gulf between the richest and poorest 10% of people in the U.S. in 1994 was the widest of any developed country, with 26.1 percent of

In the U.S. unskilled workers have become increasingly marginalized as the new economy has emerged. Many American manufacturing jobs are being replaced by high-technology jobs, leaving some workers without high-tech skills behind. Other low-skill and manufacturing jobs have been relocated to other countries where labor costs are lower.

In the developing world, where 80 percent of the world's population resides, the negative effects of globalization are being felt even more acutely. The lack of access to modern communications systems has contributed to much slower economic growth in developing countries and the largest ever income gap between developed and developing nations. The average GNP per capita in high-income countries is now $25,510, while it is only $520 on average in all low-income countries.

Many of the developing world countries that have attracted jobs from overseas because of their low labor rates also have poor protections for workers. Workers in many of these countries lack pension benefits and health insurance. Some countries allow employers to force long work hours or dangerous conditions without ample safety precautions.

The cultural issues surrounding globalization are also dramatic. The increase in communications flows from the developed world to the developing world necessarily results in the exposure of traditional cultures to Western values. Furthermore, American companies such as Starbucks and McDonalds have proliferated around the world in the last 10-20 years, bringing U.S.-style products and services to regions and cultures that had never experienced them before.

Similarly, American and other Western television and radio programming can be found in every country of the world, exposing audiences to Western values and epistemology.

Understanding these issues is critical to understanding the direction in which the world is moving and what we can expect in the next century. The State of the World Forum is one of the few organizations truly looking at the big picture of globalization. It looks closely at both the causes and effects of this process.

Some of the top-level participants at Forum 2000 will include: former Soviet president Mikhail Gorbachev, international financier George Soros, Her Majesty Queen Noor of Jordan, U.S. Treasury Secretary Larry Summers, former Joint Chiefs of Staff Chairman Colin Powell, primatologist Jane Goodall, US Web co-founder Joe Firmage, consumer advocate Ralph Nader, spiritual leader Deepak Chopra, South African President Thabo Mbeki, and more than 500 other speakers and panelists representing business, government, labor, science, religion and other fields.

Highlights of the trends identified by the Forum follow:

Economic Growth and International Trade

Increasing world trade and international financial flows are the hallmark of the globalizing economy. New trade agreements and advances in technology in recent decades have broadened markets and increased the speed with which investors finance business worldwide.

One of the most unique elements of the world's economic status today is the increased integration of global financial markets. The market liberalization of the 1970s and 1980s has resulted in more than just increased trade in goods and services. It has led to unprecedented private capital flows to emerging market economies, which many economists believe will result in unsustainable levels of growth.

The growth of international trade has also reached record levels during the last decade, expanding by more than 55 percent between 1990 and 1998. Trade volume has been more than double real GDP rates during that time, although trade generally dropped beginning with the 1998 Asian economic crisis, according to the International Monetary Fund.

The increase in export of goods during the 1990s was most dramatic in developing countries.

Growth in trade notwithstanding, however, the current performance of the world economy is due primarily to the record expansion in the U.S. The strong U.S. economy in the second half of the 1990s only raised the average world growth rate for the decade to three percent. This is significantly lower than the 1980s average of 3 1/2 percent and the 1970s average of 4 1/2 percent.

A recession or serious slowdown in the U.S. economy without the concomitant strengthening of European and Japanese economies could spell disaster for the fragile recoveries that are now taking place in Asia, Latin America and Russia.

Telecommunications

Telecommunications (including telephone landlines, mobile phone service, fax machines and the Internet) have been another guiding force behind globalization. For those with access to them, these communications resources have been a valuable commodity.

However, developing economies have traditionally been underserved in this respect. The average industrial country has 251 fax machines per 10,000 residents, while the average developing country has only five per 10,000. Similarly, a person in an industrialized country spends an average of 43 minutes on international telephone calls per year, while the average developing world person spends only 3 minutes on average.

However, the expansion of mobile telephone service around the world has, to some degree, increased access in areas where bringing in ground lines has been difficult. The share of the mobile market held by developing countries nearly quadrupled between 1990 and 1998. In Cambodia, for example, fully 72% of the total telephones are mobile phones.

The growth in Internet traffic has been dramatic, but it has been limited primarily to those in developed economies. This trend is also true of the number of phone lines per capita in countries around the world. Hence, the economic and educational benefits that these technologies provide are effectively being kept out of the hands of the vast majority of those in developing and transition economies.

Furthermore, there is often a large gap in teledensity (phone lines per 100 inhabitants) within countries. In Thailand, for example, the teledensity in urban areas was 27 in 1995, while it was only 2.6 in rural areas. Meanwhile 81 percent of the country's population lives in rural areas.

Culture

The advance of communications technology and the globalization of economies have remarkably influenced all cultures. Cultural influence among developed, technology-savvy countries has been reciprocal, with trade in arts and literature, fashion, movies and television and news information moving across borders freely.

However, those in the developing world have experienced a largely lopsided exposure to Western culture. Western corporations and organizations are disproportionately represented in telecommunications content, meaning that exposure to the inherent culture in Western movies, for example, constantly influences the worldview of those it reaches. While the worldwide movie market is saturated with Hollywood productions, the reverse is not true. On average, 79 percent of films are imported worldwide. In the United States, however, only 22 percent of films are imported. A similar trend exists with worldwide television programming.

And the U.S. generates nearly one-fifth of the entire world's music publishing, again a lopsided exchange of cultural goods which may contribute to the erosion of traditional culture in favor of Western trends.

These trends have been a particular influence to young people in developing and transition economies. Traditional cultures such as that found in the Arab world have seen a gap develop between older generations and those that have been exposed to highly appealing (if sometimes misleading) Western influences. Such gaps run the danger of eroding long-standing traditions in favor of modern alternatives.

Health

Globalization has brought with it serious medical consequences. The increase in trade and travel across international borders has exposed many populations to diseases that were unknown in their regions until recently, a recent study by the Institutes of Medicine found.

One of the most important factors in the increased emergence of infectious diseases, especially in the United States, is the excessive and indiscriminate use of antimicrobial drugs in both developing and industrial countries, a practice that has promoted the emergence of drug-resistant organisms. It represents one of the main dangers that globalization has brought: drug resistant strains rapidly spreading across the globe, the result of the misuse and overuse of the few remaining drugs available. Drug-resistant tuberculosis, for example, has become increasingly common worldwide over the last 25 years despite the fact that its incidence had been reduced significantly in the years leading up to that point, the study showed.

Another trend in global public health is the increasing number of developed world health concerns that are being found in the developing world. In 1990, the most important global health risks were lower respiratory infections, diarrheal diseases and conditions arising during perinatal periods. By 2020, major global health threats will match those in the United States and other industrial countries Ð heart disease, major depression, traffic accidents and cerebrovascular disease.

Other public health concerns include food-borne diseases and diseases transported in consumer goods; the potential for diseases to be introduced through terrorism and diseases caused by environmental toxic wastes.

Some examples from the last ten years include:

Work Place

Workplace habits have also changed dramatically in recent years. In a study published earlier this year, the International Labor Organization (ILO) found that the total number of migrants around the world now surpasses 120 million Ð up from 75 million in 1965 Ð and continues to grow.

Flows of goods and capital between rich and poor countries will not be large enough to offset the needs for employment in poorer countries, the ILO reported. Instead the social disruption caused by economic restructuring is likely to shake more people loose from their communities and encourage them to look abroad for work.

However, the falling prices for transportation and the increased speed of communication have changed the character of international migration, making it a much less permanent move. By 1990, air transport costs per mile had dropped to 20% of their 1930 level. Between 1930 and 1996, the real cost of a three-minute telephone conversation between London and New York fell from $300 to $1.

These changes have made departures to unknown lands less daunting and traumatic. Migration flows, as a result, have become more complex and diverse.

One major shift is that many more countries have become suppliers, receivers or both of these international labor migrants. An ILO analysis of current migration patterns in 152 countries showed that between 1970 and 1990, the numbers of countries classified as major receivers of labor immigrants rose from 39 to 67. Over the same 20 years, the number of countries designated as major international labor suppliers rose from 29 to 55.

As a sign of the increasing complexity of migration patterns, the number of countries that functioned as both major senders and receivers of migrants rose over the same period from four to 15.