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Last Updated: Friday, 28 November, 2003, 08:59 GMT
ILO queries globalisation myths

By Jorn Madslien
BBC News Online business reporter

A protester prepares for showdown in Miami
Mr Ghose insists that "many of the public concerns about globalisation are unfounded".
In a book that is bound to provoke the anti-globalisation community, an economist with the International Labour Organisation (ILO) has challenged a range of popular concerns about the effects of globalisation.

"Contrary to popular perceptions, global income inequality is actually declining," senior economist Ajit Ghose argues in his new book, Jobs and Incomes in a Globalizing World.

Furthermore, globalisation has not fuelled migration of workers from the poor countries of the South to the rich countries of the North, Mr Ghose insists.

"The available evidence actually shows declining South-North migration during the 1990s," he tells BBC News Online.

China and India

Mr Ghose's findings contradict much of the ILO's previous thinking, which has traditionally been close to the more critical views of the trade union movement.

But the ILO is gradually acknowledging that agreement across "often polarized... political or geographic lines" can be tricky and has set out to "move the debate from confrontation to dialogue, and thereby set the stage for action".

The anti-globalisation community - which has become very visible in recent years due to mass protests at international trade summits - has tended to criticise globalisation as the main cause of global income inequality, poverty in the developing world, and migration to rich countries.

Anti-FTAA protesters in Miami
Protestors see globalisation as the cause of poverty and lower standards for workers.
But the ILO points out that "others see [globalisation] as a way of solving such problems".

"Many of the public concerns about globalisation are unfounded," Mr Ghose insists.

"Freer flows of trade and investment have had a stimulating effect on economic growth in some of the most populous low-income countries of the world, including China and India," he argues.

And because of the sheer number of people living in these massive countries, the impact on the average earnings per head in the developing world has been huge.

"It thus seems unlikely that the global distribution of personal incomes has worsened," Mr Ghose says.

Employment and labour standards

Furthermore, while globalisation has enriched millions of people in developing countries, the rise in exports of manufactured goods to developed countries "have had a stimulating effect on employment".

"And, in general, the new employment cannot be judged as poor-quality by the standards prevailing in the countries concerned," Mr Ghose says.

In other words, there has been a marked growth in quality jobs for low-skilled labour in some developing countries.

This shift has caused some joblessness among low-skilled workers in rich countries, but the exports of manufactured goods from poor countries have helped balance this by stimulating the creation of medium- to high skilled jobs in the North, he argues.

New problems

Mr Ghose's research does more than merely crush some popular myths about globalisation, however.

It also flags up some negative aspects of globalisation that have previously received little attention.

Korean demonstrators in Cancun
Mr Ghose is particularly concerned about a "brain drain" from the developing world.

"There's already a massive skills gap between the North and the South," he says, insisting that the gap is widening.

In the developed world, "there is an active search for specific skills going on", he says.

Australia and Canada have been dishing out work permit and citizenships to people with desired skills for years, and increasingly the US and Europe are following suit, he observes.

"Currently, the legal immigration seems to consist largely of highly educated people, many of them workers in science and technology," he says.

This leaves behind a "massive surplus of low-skilled labour, and a scarcity of skilled labour" in many developing nations - in particular small African and Caribbean ones where the pool of skilled workers was limited to begin with.

"Countries like Sierra Leone loses something like 30% of its people with tertiary education," Mr Ghose says.

Marginalised

The brain drain from some of the world's poorest and smallest countries combines with their often strong reliance on one crop for exports, for example coffee, cocoa or cotton.

Demonstrators in Cancun
Both sides have blamed each other for the failure of the talks

Given that commodity prices have been very low across the board for several years, these countries have neither the people nor the funds necessary to create a virtuous spiral that would lift them out of poverty in line with India and China.

"They cannot pull themselves out," Mr Ghose says.

To get these countries "onto more viable paths", the international community should liberalise trade in primary commodities, Mr Ghose insists.

This issue is highly contentious, having caused the collapse of the trade talks in Cancun in September.

Mr Ghose also believes the international community should work to stabilise commodity prices, for example by setting up a global fund which would buy and sell stocks to keep supply and demand in balance.

And lastly, the marginalised countries need help in getting out of their rut, essentially by reducing their dependence on one or two commodities.

These countries need help to enable them to develop manufacturing capabilities, for example the ability to process their own raw materials in order to add value, Mr Ghose believes.


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