Joseph E. STIGLITZ, the 2001 Nobel Prize Laureate in Economics, in its book called “Globalization and Its Discontents”, discusses the serious problems that could cause the mismanagement of the globalization.
The globalization itself and the resulting globalization of the ideas on democracy and civil society have changed the way of thinking of people and the globalization of the political movements has led to the debt relief and the land mine agreement. The globalization helped hundreds of millions people to achieve a high level of life standards, far beyond of what many economists could guess. The globalization of the economy proved to be advantageous for the countries, which managed to make good use of it by finding new markets for their export goods and by receiving foreign investments with open arms. But the real winners have been the countries which have assumed their own responsibilities and settled their problems on their own and; which have understood the potential role of the state in growth, instead of merely relying on the idea of a self-correcting market.
But the globalization didn’t prove to be useful for millions of people. Many of them have found themselves in a worse situation; they have lost their jobs, their life has become more insecure. They started to feel themselves weaker and weaker against the powers beyond their control. They have seen democracies impaired and cultures deteriorated.
It is true that the globalization replaces, in most cases, the dictatorships of national elites with new dictatorships of the international finance. The countries are said that capital markets or IMF would refuse to give them loans if they fail to comply with certain conditions. Essentially, they are forced to partly waive from their sovereignty and allow to be “disciplined” by the dictations of unsteady capital markets, which also include speculators who don’t care the long-term growth of the country and the raising of the life standards but only the short term.
Developed countries have a particular responsibility for ensuring the correct management of the globalization; they should, for instance remove their trade obstacles and practice what they preach. The responsibilities of the developed countries may be big, but their motivation to fulfill them is weak; after all off-shore banking centers and risk hedge funds serve to the benefits of the developed countries. That’s why the developing countries must assume the responsibility to improve their situation. They can adjust their budgets, even insufficient, to provide self-sufficiency; they should remove trade obstacles, which oblige consumers to pay high prices while letting a few people make big profits. Most important of all, developing countries need efficient states, a strong and independent judicial system and open and transparent states with democratic responsibility and free of corruption, which impairs the efficiency of the public sector and the growth of the private sector.
They need sustainable and fair policies that would contribute to a democratic growth. That is the goal of the development. Development is not to help a few people to be rich or to create a limited number of industries irrationally protected in favor of the elite of the country; it is not to bring Prada, Benetton, Ralph Lauren and Louis Vuitton to the urban rich and leave the rural poor in miserable conditions. Being able to buy a Gucci brand bag from the shops in Moscow doesn’t indicate that the country has become a market economy. Development means the transformation of the society; improvement of the life standards of the poor and the opportunity for everyone to be successful and to access to health and education services.
Development can’t happen if the policies to be applied by countries are dictated by a few people like the minister of finance or trade and by a few institutions and organizations like IMF. To encourage making democratic decisions, we must ensure the active participation of various economists, authorities and experts from developed countries to the discussion. And this discussion shouldn’t be limited with the experts and politicians; a larger participation is needed. The developing countries must assume the responsibility of their own future. But the developed countries shouldn’t withdraw from their responsibility on this issue.
The developed countries should contribute to the reformation of the international organizations that manage the globalization. We have founded theses organizations and we have to strive for correcting them too. If we want to find a solution to the reasonable concerns of those who declares themselves to be unhappy about the globalization; if we want the globalization to work for billions of people who couldn’t benefit from it so far, we have to create a globalization environment with a more human face.
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