globalizers: we feel your pain

Doug Henwood dhenwood at
Mon Aug 28 09:51:29 PDT 2000

Financial Times - August 28, 2000

Critics of globalisation promised a hearing By Gerard Baker in Jackson Hole, Wyoming

A number of senior economic policymakers have signalled a more sympathetic approach to opponents of globalisation and pledged to do more to deal with their concerns over integration of the world's economies.

Stanley Fischer, the former managing director of the International Monetary Fund and now its deputy, summed up the softer stance when he said not all critics of globalisation should be seen as protectionist or isolationist.

He told officials from the world's central banks and international economic institutions that many anti-globalisation attacks on governments, corporations and international institutions were valid.

"They may be asking for better globalisation," Mr Fischer said, not an end to globalisation, and policymakers should respond.

At the annual symposium of the Kansas City Federal Reserve Bank in the mountain fastness of Grand Teton National Park, Mr Fischer urged developed countries to lift restrictions on agricultural trade that unfairly shut out developing countries from global markets.

He also said concerns of critics in the leading industrialised countries about the potential damage to labour rights and the environment by globalisation should not be lightly dismissed.

Alan Greenspan, chairman of the Federal Reserve, was also eager to mollify the critics of globalisation. He said market-directed capitalism had become the paradigm for most of the world in the last decade, a remarkable and positive change. He warned that, when economic growth slowed, as it surely would, sentiment about the benefits of global capitalism would change too.

Policymakers needed to "understand and, if possible, address the concerns that give rise to the desire to roll back globalisation".

The Fed chairman was pessimistic about the outlook for further trade liberalisation. He noted that pressure for non-tariff barriers to imports in the US, such as quotas, had grown and suggested latent anti-free trade sentiment had only been suppressed by strong economic growth.

"If we had not had the surge of economic activity we have had in the US, the march towards increasing use of quotas would have continued," he said. In effect, "cyclically adjusted protectionism", as he called it, was on the rise.

Mike Moore, the director-general of the World Trade Organisation, told the symposium that launching a new multilateral trade round, while by no means impossible, was going to be difficult.

Though he said progress was being made in Geneva on the preparatory stages of negotiations for a financial services agreement, he cited a litany of reasons why starting a new round was much harder than it had been in the past.

It was left to Mr Fischer to sum up the mood of most policymakers when he made two forecasts about globalisation. "First, if the policymakers of advanced countries and at the international financial institutions can manage the process well and bring developing countries along, it will continue to be to the benefit of all. Second, there will be surprises in the process."

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