Worries about job security cut across both rich and poor countries astechnology accelerated the pace of globalization and sent corporations and workers moving beyond borders around the world, economic experts said during a Second Committee (Economic and Financial) panel discussion this afternoon.
Panellists in the discussion, titled “Social Policy in an Era of Globalization”, said Governments in both developed and developing nations, in addition to the international community, must develop flexible policies to address the social, economic and labour challenges sparked by the increasing interdependence of today’s world.
Moderated by Jomo Kwame Sundaram, Assistant Secretary-General for Economic Development in the United Nations Department of Economic and Social Affairs, the panel discussion was organized by the Office of Economic and Social Council Support and Coordination and opened by Aboubacar Sadikh Barry ( Senegal).
Speaking from the viewpoint of the industrial nations, Laura Tyson, Dean of the London Business School, said Governments needed policies that helped maximize the gains while minimizing or sharing the pain of job dislocation, which was growing increasingly severe as technology led more analytical tasks like research, accounting and software to lower-cost economies.
The richer countries harboured many of the same concerns about globalization as developing nations, she said. They and their citizens were concerned about growing income inequality and competition from low-wage emerging market economies that could cause a “race to the bottom” and lead to job losses or declining wages. Workers from industrial nations now viewed themselves as competing with counterparts around the globe. Government policies must be flexible to help firms restructure and shift jobs while addressing the dislocation affecting the livelihoods of workers.
Michael Rutkowski, Director of Human Development for the World Bank’s Middle East and North African Region, said globalization had been accompanied by a changing demographic landscape as labour forces soared in the South and shrank in the North. That presented many challenges as the North struggled to fill the gap and the South tried to find income security for its workers. Income security was an issue for all Governments as globalization added to employment risks and labour forces turned over more rapidly. Globalization was driven by the growth in world trade and foreign direct investment (FDI) flows, a process that favoured large countries like China and India and led to sense that the entire world was benefiting from globalization.
World Bank officials believed that growth had reduced poverty, he said, acknowledging that globalization had its winners and losers. However, good governance, proper policies and investment in human capital were among the tools to minimize its negative impact.
Kaushik Basu, C. Marks Professor of International Studies and Professor of Economics at Cornell University, cautioned that the international community must find ways to make globalization more fair and inclusive so that its negative aspects did not halt a trend that had benefited many economies around the world. The United Nations was an important forum for less wealthy and powerful nations to air their views. India and the United States had both experienced many benefits from globalization but the international community must be aware of the negative fallouts to avoid halting the process.
Pointing out that globalization allowed powerful countries to exert control over less powerful nations by cutting off the flow of trade or capital, he said he had no clear solution, but one avenue was for international organizations to provide a voice to small or weak countries. International rules and regulations binding all countries could also help deal with negative fallouts, but they must be nuanced to deal with such issues as child labour. Countries would also need complementary policies to ensure that stricter regulations did not throw children out on the streets.
As delegates questioned the merits of globalization, one representative said the great Seattle protest against the World Trade Organization seemed to show that people were split by globalization rather than brought closer.
Mr. Basu said it was silly of the Seattle protesters to oppose the growth in trade. While “global governance” was a “far-out” idea, it was possible to move in that direction. The Geneva Convention on war prisoners, International Labour Organization (ILO) conventions, and the International Criminal Court were all forms of global governance.
Mr. Rutkowski added that the protests could have been on behalf of the skilled workers in the North but they had, in fact, been on behalf of the poorest people, who had actually gained from globalization. There was evidence that both the poorest and the richest could gain from globalization, but there was less clarity about the losers. Skilled labour from the South, for example, put pressure on skilled labour in the North, while outsourcing could produce even more losers.
Ms. Tyson said globalization brought the world together more tightly from an economist’s point of view, in terms of trade flows, financial flows, and the flow of people. Workers more effectively competing in a global market were more integrated than ever before. But that did not mean there was better understanding between countries and cultures. The jury was out on whether greater economic interdependence brought greater harmony among nations, and the last great wave of globalization had, in fact, ended in war.
One delegate said that, if national governance problems could be solved first, the world would actually get somewhere. The ILO, for example, could talk for days about universal labour policies but its recommendations lacked teeth. Another delegate said the world needed a macro-level strategy to deal with global issues, but national policies and decisions should not be usurped.
Opening the panel discussion earlier, Aboubacar Sadikh Barry ( Senegal) recalled that, during the Committee’s general debate, many of his fellow delegates had voiced concerns about the negative impact of globalization, particularly with regard to the widening income between the rich and poor. Globalization had left many without jobs or livelihoods, leading to deteriorating living standards. Last week, Professor Kenneth Rogoff had told the Committee in a keynote address that the financial globalization of the last 15 years had coincided with remarkable global stabilization of both prices and output. There seemed to be a broad consensus on the need to collectively find ways to make globalization fairer and more inclusive.