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                                  Is there a world without walls?
                                            Ruchira Bajaj

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Encarta defines globalization is defined as the emergence of global society in which economic, political, environmental and cultural events that occur in one part of the world affect the people in other. It describes the growing economic, political, technological, and cultural linkages that connect individuals, communities, businesses, and governments around the world and hence, resulting in a world without walls. The most dramatic evidence of globalization is the increase in trade and the movement of stocks, bonds, currencies, and other investments. From 1950 to 2001 the volume of world exports rose by 20 times. By “2001 world trade amounted to a quarter of all the goods and services produced in the world. As for capital, in the early 1970s only $10 billion to $20 billion” (Free Trade, www.encarta.com) in national currencies were exchanged almost daily. Globalization results in creating a world that has torn down walls, collapsed distances and spread information.

Embracing free trade as a golden ideal is easy, however with blurring of boundaries of our personal worlds the international institutions that oversee world trade and finance play an increasingly important role. Three key institutions helped shape the current era of globalization are: the International Monetary Fund (IMF), the World Bank, and the World Trade Organization (WTO). Items common to our everyday lives—such as the clothes we wear, the food we eat, and the cars we drive—are the products of this world without any barriers and therefore it is important that some entity governs this newly changing environment.

The WTO that overlooks the negotiations between the various trading nations, since its birth in 1948 has faced much criticism mainly directed at the rich countries, which possess the greatest bargaining power. One of the WTO's meetings in December 1999 in Seattle began with grand intentions from many countries that professed a commitment to global trade, but remained unbending when it came to protecting their domestic interests. The meeting was a gamble from the start. There were promises to clear up quarrels piling up on the world's negotiating table. The push to slim down tariffs and quotas had progressed to more complicated issues. Global issues like farming, anti-dumping laws, labor conditions and environmental disputes all needed addressing. Instead, the bickering increased along with the tear gas. Developing countries complained about “high-minded demands from the big traders for labor reforms and green laws. Free trade, that glittering goal embraced by so many, proved impossible to obtain. The outcome left the 135 member nations to cope with the present landscape” (Rodrik). With protesters wreaking havoc outside, the WTO was unable to prevail on the assembled government officials to conclude an agreement that would launch a new round of trade negotiations.

The next meeting held November 2001 in Doha, the capital of Qatar, set in motion a multiyear negotiating process aimed at further liberalizing trade, with focus on the needs of the developing countries. Still reeling from the experiences of Seattle, Qatar was the choice location of the meetings, because of conveniently repressive laws about the right to demonstrate and protest. Doha took place scarcely two months after the September 11 terrorist attacks, and the pressure was high, particularly on the advanced countries, to prevent another failure that would have sapped confidence in the global economy's ability to weather the shock (Shah). The world's trade officialdom was spared another embarrassment in Doha. But the eventual outcome remains very much in doubt. Negotiations practically deadlocked over agriculture, as they were over TRIPs (Trade-related Intellectual Property Rights). Few knowledgeable observers believe that “much progress will be made before trade ministers next meet in Cancún, Mexico, in September” (Globalization, www.encarta.com) of this year. And even if there is progress, it will be difficult to hail it as a great success for development, no matter what the official appellation of the round.

Protests—like the one in Seattle, by what is called the anti-globalization movement are seldom directed against globalization itself but rather against abuses that harm the rights of workers and the environment. The question raised by non-governmental organizations and protesters at “WTO and IMF gatherings is whether globalization will result in a rise of living standards or a race to the bottom as competition takes the form of lowering living standards and undermining environmental regulation” (Globalization, www.encarta.com). One of the key problems of the 21st century will be determining to what extent markets should be regulated to promote fair competition, honest dealings, and fair distribution of public goods on a global scale and what aspect of the economy should be guarded by fences.

Many economists who thought that, lifting trade barriers and increasing the free movement of capital across borders would narrow the sharp income differences between rich and poor countries (Bhagwati, 18). However, excluding the two most heavily populated countries in the world, India and China, “poverty and inequality have increased in less-developed and so-called transitional (formerly Communist) countries. For low and middle income countries the rate of growth in the decades of globalization from 1980 to 2000 amounted to less than half what it was during the previous two decades from 1960 to 1980” (Commerce, www.encarta.com). Although this association of slow economic development and the global implementation of neo-liberal economic policies is not necessarily strict evidence of cause and effect, it contributes to the dissatisfaction of those who had hoped globalization would deliver more growth and decrease the walls that are currently separating the various nations that have great potential in this world. The lack of progress on indicators of social well-being, such as life expectancy, infant and child mortality, and literacy, also has lowered expectations about the benefits of globalization.

Critics of globalization believe aspects of the way globalization operates should be changed. The debate over globalization is about what the best rules are for governing the global economy so that its advantages can grow while its problems can be solved. On one side of this debate are those who stress the benefits of removing barriers to international trade and investment, allowing capital to be allocated more efficiently and giving consumers greater freedom of choice. On the other side of the debate are critics who see neo-liberal policies as producing greater poverty, inequality, social conflict, cultural destruction, and environmental damage. “Taken together, positive and negative forces are a stunning reflection of the most extraordinary degree of global interdependence in human history” (Clinton). They say that the most developed nations—the United States, Germany, and Japan—succeeded not because of free trade but because of protectionism and subsidies. They argue that the more recently successful economies of South Korea, Taiwan, and China all had strong state-led development strategies that did not follow neo-liberalism. Mike Moore, former prime minister of New Zealand and Head of the WTO, states that "it's all too seldom about the customers or countries, it's about the expansion and power of the various institutions, whether in Geneva, Wellington or Washington DC…The excesses and ignorance of the more extreme protestors [is a] voluntary global democratic caucus” (Moore, 269). In his book titled the “World Without Walls” Moore suggests’ that the solution to the aforementioned issues lies with greater democracy, transparency, and openness is often quite cynical about the way the political process works.

Powerful nations like the United States, using its own direct-aid programs and its influence over development agencies, has encouraged other nations to adopt the features and institutions of post-Cold War American capitalism. But this approach—the so-called Washington consensus—has often yielded disappointing results. Many economies in Latin America, Eastern Europe, and elsewhere are stagnant or backsliding, and most of the world's poorest economies show few signs of new life. However going forward, the Washington consensus should not be abandoned, as some development economist’s advocate, but it must be improved. In order to succeed it is important to develop a “multifaceted "system" for nurturing high-impact entrepreneurship -- a system that, with the right development policies, might be cultivated in many other countries as well”. The macroeconomic issues such as finance and trade, along with general institution building, privatization, deregulation, and invest in infrastructure and basic education are Governmental and Corporate responsibility (Schramm). Since real opportunities arise only when a nation is the initiator: a breeder of new firms, based on new ideas that add unique value.

It is time to re-think, these inequalities “the walls” in living standards and participation in the global economy are a serious political problem in an era of globalization. Some countries have been unable to function at even a minimum standard of basic competence in the globalized economy. Governments that are helpless to stop unethical activity or to collect taxes to meet basic public service needs are characterized as failed states. Sometimes failed states can become havens for terrorists and foreign criminals who use them as bases for activities harmful to other governments and their people and “brings to mind a wide open horizon, the absence of memory, a certain degree of terror replacing the safety, the immense unknown of a world without walls” (Govier). In parts of Africa, for example, where diamonds and other valuable resources attract criminal despots, mercenary armies have been engaged in mass killing to terrorize local populations into giving them what they want. Not everybody who is “angry wants to destroy the civilized world. A lot of people are angry because they want to be a part of tomorrow, but they cannot find the open door” (Clinton). We as a world have to prepare for that tomorrow together, because any imbalance in one nation is now directly effecting others nations.

In conclusion, the world's national and international institutions may not be ideal, but they are better than any of the alternatives that have been tried. When all is said and done, democratically elected governments and markets will respond appropriately to the challenges they face. The forces of openness, freedom, competition, and, of course, free trade will prevail and the world will be without walls.

Work-Cited

1. Bhagwati, Jagdish. In Defence of Globalization. Oxford University Press, 2004.

2. Clinton, William J: World Without Walls: Struggle for this century’s soul. (January 11, 2002). The Times of India. pp. 3A.

3. "Commerce," Microsoft® Encarta® Online Encyclopedia 2004 http://encarta.msn.com © 1997-2004 Microsoft Corporation. All Rights Reserved.

4. "Free Trade," Microsoft® Encarta® Online Encyclopedia 2004 http://encarta.msn.com © 1997-2004 Microsoft Corporation. All Rights Reserved.

5. "Globalization," Microsoft® Encarta® Online Encyclopedia 2004 http://encarta.msn.com © 1997-2004 Microsoft Corporation. All Rights Reserved.

6. Govier, Katherine. (2004, February 9) What We Talk About When We Talk About Books. Retrieved September 10, 2004, from http://www.govier.com/journal_archives.htm

7. Moore, Mike. A World Without Walls: Freedom, Development, Free Trade and Global Governance. New York: Cambridge University Press, 2003.

8. Rodrik, Dani. (2003 May/June) Building Free Trade Optimism: Lessons From the Battle in Seattle. Retrieved on Septerber 2, 2004, from http://www.foreignaffairs.org/20030501fareviewessay11225/dani-rodrik/free-trade-optimism-lessons-from-the-battle-in-seattle.html

9. Schramm, Carl J. (2004 July/August) Building Entrepreneurial Economies. Retrieved on Septerber 2, 2004, from http://www.foreignaffairs.org/20040701faessay83410/carl-j-schramm/building-entrepreneurial-economies.html

10. Shah, Anup. (2002) Free Trade and Globalization. Retrieved September 2, 2004, from http://www.globalissues.org/TradeRelated/FreeTrade/Doha.asp