Global Policy Forum

Many predictions have been made of violence from the protesters gathering in Prague this week ahead of the autumn meetings of the World Bank and the International Monetary Fund (IMF). But there is more on their websites about banner-making than about gas masks. Since the dramatic scenes in Seattle last November, there has been a tendency to pour scorn on the demonstrators' incoherent critique of globalisation. But that misses the bigger point. Their demonstrations sent shockwaves through governments and they succeeded in focusing attention on issues such as the legitimacy of the IMF, and the clash between World Trade Organisation rules and UN environmental conventions. It is paying off. A dramatic shift is developing in the climate of discussion and policy-making on globalisation.

Evidence for this can be found in two reports published last week. The more important is the Bank's World Development Report. It acknowledges revolutionary concepts, such as the fact that economic growth does not automatically reduce poverty, and states that inequality is bad for growth. Most controversially, it recognises that poverty is not simply an economic problem but a polit ical one. Sadly, many aid agencies have belittled the Bank's shift, preferring condemnation to the slow, difficult process of reform.

One of the Bank's toughest critiques is of the world's trading system - it claims that $63bn a year is lost by poor countries due to agricultural protectionism - and trade is also the subject of a report published last week by the Performance and Innovation Unit (part of the Cabinet Office). Here, for the first time, the UK government is grappling with the issues identified by demonstrators and non-governmental organisations. For example, it acknowledges that there are serious environmental costs to trade liberalisation. This honesty surfaces only in the text; unfortunately, the recommendations can be broadly summarised as a smug business as usual. That trick will not wash in the white paper on globalisation being drawn up in the Department of International Development and due out on the first anniversary of Seattle. The pressure is mounting on the policy makers to produce convincing responses to the accusations which will be aired in Prague over the next fortnight that global capitalism is failing the vast bulk of the world's population.

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