Sorting out the Debate on Globalization

CAMBRIDGE: Confusion reigns supreme in the heated debate on globalization. For some, globalization is the road to prosperity for poor countries, and it certainly seems that countries such as Singapore, Taiwan, Korea, Chile and a few others have gotten much richer in the past 25 years through an economic strategy based on export growth and participation in the global economy. For others, globalization is a curse under which poor countries are bound to fall further and further behind. There is little doubt that after twenty years of IMF and World Bank programs in Africa, those countries are still mired in poverty, with little benefit to show from all of those Washington-inspired programs. So who’s right in this debate which has spilled into the streets of Seattle, Washington, and now Prague, during the cycle of international economics meetings in the past year?

The answer, of course, is that life is more complicated than the contrasting positions of globalization as panacea or curse. Different parts of the world face different kinds of challenges. For some, globalization is a pretty reliable ticket to success; for others, it will have little effect by itself, since the most pressing social and economic crises hitting those countries can’t be solved by free trade or market reforms alone.

First, some countries are heavily burdened by their physical geography. Some places in the world are very remote from international trade – think of the Andean highlands, the mountainous regions of Iran, Iraq, and Afghanistan; the landlocked countries of Africa, such as Rwanda, Burundi, Burkina Faso, or the landlocked regions of Central Asia. These countries are not much helped by globalization. They are, in general, stuck in poverty and economic isolation. For them, globalization is not a curse, but it is hardly a solution.

Globalization also does little to eliminate the high incidence of disease linked to tropical climate. In parts of Nigeria, a person can expect to be bitten by an infective mosquito carrying malaria up to 300 times in a year, while I am pretty much assured that no mosquito will give me malaria in Boston. Africans suffer about 500 million cases of malaria per year, causing around 2 million deaths. Malaria can destroy economic growth and hinder foreign investment just as much as war or economic mismanagement.