Part III. Supplementary Reading Text a: The Debate on Globalization

Asia’s financial crisis has started the debate over globalization. The latter is a whirlwind of trade and investment that builds economies and speeds up development in even the world’s poorest nations. But it can also bring economies low overnight.

Globalization raises some of the most important issues facing humankind today. These are challenges that must be addressed at the highest level and on a continuing basis.

Globalization’s effects have been overwhelmingly good. Intensified by unprecedented liberalisation; world trade continues to expand faster than overall global economic output, inducing a wave of productivity and efficiency and creating millions of jobs. Even more impressive is the stunning increase in international investment, i.e. building roads, airports and factories in poorer countries. In 1990s alone, foreign investors have poured $1 trillion into developing economies. This trade and investment is raising living standards in some countries faster than many thought possible. Until recently it took at least two generations for living standards to double, but in China, living standards now double every 10 years.

But while globalization has raised living standards for many, it has made life more difficult for those dislocated by change and it threatens to leave part of the world behind. It is no coincidence that the disappointing economic performance in much of Sub-Sacharan Africa reflects a failure to integrate into the world economy, thus, to trade successfully and attract investment.

The foremost challenge of globalization is to ensure that its fruits extend to all countries. Most forecasts say that economic growth in the developed world will continue to slow, and that expanding markets in developing countries are needed to ensure that living standards continue to rise.

The second challenge of globalization is to minimize the fear that the growth it brings is inherently destabilizing. The Asian crisis, threatening some of the most formidable economic competitors in the world, amplifies these fears. Nevertheless, the costs of being left behind by globalization are usually much greater than the losses caused by instability. The third challenge of globalization is to address the concern in wealthier countries that international competition will harm living standards. There is evidence that stagnant wages in the United States and unemployment in Europe have other causes – technological change, poor education, Europe’s inflexible labour markets, high taxes and an aging workforce. But polls show more and more people believe the cause lies in worldwide trade and investment. This undermines the kind of leadership needed to respond to the Asian financial crisis and deal with other global problems.

The fourth challenge of globalization is to solve the problems complicated by expanded trade and investment – environmental degradation, diseases, migration, crime and terrorism. The world’s ability to confront this set of new, post-Cold War challenges will require greater global cooperation.

There is no doubt that globalization of trade and investment has in some ways weakened the independence of national governments and made life less predictable for many individuals. But those who would erect barriers to trade and investment to try to recapture an earlier era of independence confuse the cause and effect of globalization. In pursuit of higher living standards a new world of global markets and instant communication has been created to deliver gains in efficiency and competition that are beyond the powers of national governments. The goal is not to disenfranchise the individual, but to lower costs, to broaden choices, deliver more capital and open more markets, giving the individual more chances to control his or her destiny.

The challenges raised by globalization yield no easy answers. They lessen the ability of national governments to confront them independently. Collective consideration, in the form of a world summit and ongoing consultative process, will be a crucial confidence-building effort.

Notes

whirlwind – вихрь; ураган

overnight – быстро; вдруг, неожиданно

overwhelmingly – очень, чрезвычайно; в подавляющем большинстве случаев

induce – вызывать; стимулировать; убеждать, побуждать,

склонять, заставлять

stunning – ошеломляющий, оглушающий

coincidence – совпадение; случайное стечение обстоятельств

foremost – передовой; самый главный, выдающийся

challenge – сложная задача, проблема; вызов

inherent – присущий, неотъемлемый; прирождённый

poll – опрос, голосование

undermine – разрушать, подрывать

disenfranchise – лишать гражданских прав

destiny – судьба, удел

yield – приносить, давать, производить

crucial – решающий; критический