Institutions of Globalisation Essay Example for Free

Institutions of Globalisation Essay Firstly, the Institutions of Globalisation must be reformed. Unintentionally, globalisation has come to be governed by several key institutions. Best known are the World Trade Organisation, the World Bank, and the International Monetary Fund. If globalisation is to work for everyone, these institutions must be reformed. They must be made to look after all of the worlds countries, not just those they represent. Secondly, there must be an ending to northern double standards. Developed countries preach free trade, but often fail to practice it. Recently, France, one of the key members in the Doha talks, stubbornly refused to open up its markets and allow in Agricultural imports particularly the cheaply produced goods from the Third World. Generally, the EU taxes Third World exports and dumps its subsidised products in developing country markets, destroying local livelihood. When new WTO rules are drawn up, they usually reflect the balance of power within the organisation, therefore benefiting the richer countries. Certain kinds of subsidies are often permitted in the North but banned in the South. Rich countries must help poor countries by promoting economic growth that is equitable and environmentally sustainable; they must help developing countries build effective government systems and promote health and education for their people; and must use new technology to share skills and knowledge with developing countries. Rich countries can work with developing countries to put in place policies that will attract private financial flows and minimise the risk of capital flight. They can fight to strengthen the global financial system, encourage international co-operation on investment, competition and tax that promotes the interests of developing countries, support an open and rules-based international trading system, and work to promote equitable trade rules and an effective voice for developing countries. A vital step is to support continuing reductions in barriers to trade, both in developed and developing countries, and work to improve the capacity of developing countries to take advantage of new trade opportunities. By strengthening developing countries capacity to participate in international negotiations, lesser-developed and emerging economies will have the chance to reap the full benefits of globalisation. Unfair trade sanctions were one of the drivers for the establishment of the General Agreement on Tariffs and Trade (GATT), now known as the World Trade Organisation (WTO). Debt relief would be a major factor which could reduce marginalisation. Poor countries are currently paying million of dollars back to rich countries millions which they cannot afford. Debt relief can take the form of cancellation, rescheduling, refinancing or re-organisation of debt. The Debt Initiative for Heavily Indebted Poor Countries is a well-known current example. Through Jubilee 2000, many non-government organisations (NGOs) from around the world campaigned for one-off cancellation of the unpayable debts of the worlds poorest countries by the end of 2000. There are particular responsibilities placed on developed countries. It would be pointless to pour millions of pounds worth of trade and aid into poor countries only to then impose trade sanctions and unfair subsidies. All policies, of developing countries, developed countries, international institutions and society, must be consistent with a commitment to sustainable development and reducing poverty. Poor countries need to be given the chance to be heard. Open and effective global institutions are needed where they can fight for their interests on a more equal level. The UK government is committed to help eliminate world poverty, and to co-operate with other governments and international institutions as part of a broader international effort. Three years ago the government published its first White Paper on International Development Targets3, which focused on the reduction of abject poverty4 in the world. The targets, which include a reduction by 50% in the number of people living in extreme poverty by 2015, and progress towards gender equality and empowerment of women by 20055, are supported by the International Monetary Fund (IMF), the World Bank, the EU, and the OECD, as well as many heads of states. Although the targets are challenging, leaders believe that if the correct national and international policies are implemented, the targets will be achieved. It is pointed out, however, that progress is dependent on national governments in all countries strengthening commitment to reduce poverty to ensure that all countries benefit and that some are not missed out. The UK government believes that the benefits of globalisation for poor countries substantially outweigh the costs, especially in the longer term. The rapid integration of the global economy, combined with advances in technology, is creating unprecedented global prosperity, which has helped to life millions out of poverty. With the correct policies put into place, many millions more stand to benefit in the years ahead. CONCLUSION We have seen that poor countries that are able to increase their participation in the global economy have higher growth rates, faster poverty reduction, and more rapid increases in education. It is vital that poor countries are able to integrate into the world economy in ways that reduce, not increase, inequality and poverty. Reform of global institutions have a key part to play in this. However, the first and perhaps most important step for globalisation to benefit all in the future is for rich countries to open their protected markets to the poor, which should help to reduce world poverty and inequality. Poor countries with around 3 billion people have broken into the global market for manufactured goods and services. Whereas 20 years ago most exports from developing countries were primary commodities, now manufactured goods and services dominate. This successful integration has generally supported poverty reduction. Examples can be found in China, India, Bangladesh and Vietnam. The new globalisers have experienced large-scale poverty reduction; during the 1990s the number of their people who were poor declined by 120 million. Integration would not have been feasible without a wide range of domestic reforms covering governance, the investment climate, and social service provision. But it also required international action, which provided access to foreign markets, technology and aid. One of the most disturbing global trends of the past 2 decades is that countries with around 2 billion people are in danger of becoming marginal to the world economy. Incomes in these countries have been falling, poverty has been rising, and they participate less in trade today than they did 20 years ago. It is easy to see that globalisation is not a force that can be ignored. It is all around us, in every aspect of our lives. Within countries, globalisation has not, on average, affected inequality. The rapid growth in the new globalisers can be a political opportunity for redistribution policies that favour the poor. Promoting education, particularly for poor people, is equalising, improves health standards and enhances the productivity growth that is the main engine of poverty reduction. There will, however, without a doubt, be winners and losers in each society. Good social protection policies can be a key factor in helping people prosper in this more dynamic environment. It appears that the solution to the problems, that especially countries such as China and Africa seem to be facing, is not the halting of the globalisation process, but the opposite. The expansion of free trade to include the developing countries in Africa and China and elsewhere It appears that these countries are not poor because of globalisation, but in large part because this globalisation has passed them by. The road ahead seems not to lie in the reduction, or remodelling of globalisation but the expansion thereof, and expansion to include the areas in the world which globalisation has so far been passing by. The 49 least developed countries account for nearly 11% of the worlds population, but only 0. 4% of the worlds exports and that small percentage has been falling. Wage levels differ between countries according to the levels of education and productivity. The experience in countries like Korea is that as countries develop, their wage levels rise and the focus of their industry shifts from labour intensive to more capital and knowledge intensive industries. Globalisation creates unprecedented new opportunities and risks. If the poorest countries can be drawn into the global economy and get increasing access to modern knowledge and technology, it could lead to a rapid reduction in global poverty as well as bringing new trade and investment opportunities for all. But if this is not done, the poorest countries will become more marginalised, and suffering and division will grow. In order to make globalisation work for the poor we need not just strong and vibrant private sectors, but also effective governments and strong and reformed international institutions. Governments and institutions need to work collectively to tackle the problems of conflict and corruption, boost investment in education and health, spread the benefits of technology and research, strengthen the international financial system, reduce barriers to trade, tackle environmental problems and make development assistance more effective. It is clear that openness is a necessary but not sufficient condition for prosperity. No developed country is closed. The poor countries that have been most successful in closing the gap are those which have opened up their economies to world markets in order to build strong export sectors and attract inward investment. However, the majority believes that the future of Globalisation is bright. Even September was a remarkable positive month, especially in the US. The country has recently signed new agreements with Jordan and Vietnam; and negotiations to bring China into the World Trade Organisation look close to a deal. The new trade rounds at Doha promise to deliver liberalisation of agricultural markets, allowing less developed countries the chance to gain a share of these markets and profit accordingly. A breakthrough at Doha just as the world economy appears to be entering its worst slowdown in a generation could be a hugely symbolic victory for those proposing further trade liberalisation. Globalisation in the future is inevitable. However, it is agreed on all accounts that in order for it to benefit as many people as possible, changes must be made. Those institutions such as the IMF and the World Bank, as well as individual governments, must all make vital changes in order to better prospects for everyone in the future. To conclude, global economic integration has supported poverty reduction and should not be reversed. But the world economy could be and should be much more inclusive. The growth of global markets must not continue to bypass 2 billion people. The rich countries can do a lot, both through aid and trade policies, to help the currently marginalised countries onto the path of integration that has already proved to effective for the new globalisers. BIBLIOGRAPHY CAFOD Briefing  www.globalisationguide.org