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Saturday, 15 April, 2000, 14:14 GMT 15:14 UK
Globalisation: An unstoppable force?

Scores of finance and development ministers gathered in Washington this weekend for meetings of the World Bank and International Monetary Fund.

To mark the occasion, BBC News Online staged a live forum.

Select a link below to watch questions that were put to the panellists on Saturday 15 April.

The BBC's Richard Quest discussed globalisation with German Development Minister Heidemarie Wieczorek-Zeul, South African Finance Minister Trevor Manuel and the President of the World Bank, James Wolfensohn.

Quest:As we speak, there are protesters on the streets of Washington, protesting basically against what you lot are all doing.

Manuel:I think it's important to recognise that the protests here, as you saw in Seattle, there's no common purpose other than to protest. I mean you have from environmentalists with very, very special interests to those supporting the Zappatistas in Mexico to people calling for debt relief to people calling for protection of vested interests in great northern economies.

Quest:I'd agree with you up to a point except Mr Wolfensohn they are united in one respect: they don't like the IMF and the World Bank.

Wolfensohn:Well it's very clear that there is a reaction to international institutions. We saw that in Seattle. And at that time I thought the bank was out of it and I've made a bad prediction because they're now - they're now very much here. I think one needs to listen to the commentary, I think all of us are joined in exactly the same objective which is to deal with the questions of poverty and to try and make it a better world. I think the methodology that's being used is different, we want to keep working at it and some of the protestors are trying to close us down and I hope they don't succeed.


Wieczorek-Zeul:Well I think that that is at least with most of the protestors a feeling which many people in the world share that globalisation should not become a situation in which the market economy decides everything in democracy, and social and ecological roles go down the river. So if that is the point, my starting point is - and that is also what I'm doing politically and in my job - is to see to it that within globalisation you have rules, you have social rules, you try to get social and ecological rules and then one has to use international institutions in order to regulate and help.

Quest:You've cut straight to the heart of globalisation - we shall proceed from there. That's the issue isn't it - how far can globalisation go before it ceases to be a help and starts to become a hindrance? What do you think Mr Manuel?

Manuel:Well I don't think you can turn back the clock. I think that the battle is for defining the rules of the game and there have to be issues such as inclusion, equity, a focus on a core set of values that deal with people, the environment and our collective future. It can't be about attempts to shut off some economies to goods from other parts of the world. We need a set of rules that apply, that are understood by all and that does provide a basis for mutual benefit.

Quest:Which of course assumes that so far we've got it slightly wrong?

Wieczorek-Zeul:And that is true. I mean if you take, for instance, the report of UNDP which says that there is a high amount of inequality in the world with growing globalisation and that the three richest people in the world have more than - more property and more money than about 600 million people in the developing countries.

Quest:A lot less this week after the stock.

Wieczorek-Zeul:I mean it is existing and the question is how do we use all our development and other possibilities and also international institutions to get this kind of inequality abolished or at least diminished.

Quest:Well since you're here Mr Wolfensohn I'm assuming you're not one of those people who is at home licking wounds, at least from the financial portfolios?

Wolfensohn:Well I'm not at home.

Quest:We'll come to that later - the stock markets. Staying with the globalisation. Right let me put it bluntly: what then to you is globalisation?

Wolfensohn:Well globalisation, as Trevor said, is something which essentially is opening our planet for access to trade, to knowledge, to investment, to information in a way that needs to be spread in an equitable manner.

Quest: You haven't mentioned corporations in there?

Wolfensohn:No, well trade and investment are focussed, in many cases, on corporations but for me globalisation is not about the evil corporation or the inadequacy of the World Bank or anyone else to control it. This is something which is happening as a result of technology, it's happening as a result of interest and the fact that with six billion people on the planet now our markets are expanding, we're going to have another two billion people in the next 25 years - there is no way that you're not going to have a more interconnected world.

Quest:Is that equivalent to saying it's happening, we're here, get used to it?

Manuel:It is and it isn't because I think that one of the big issues, certainly where I come from, in South Africa and on the African continent is a need to carve out space. Developing countries feel a sense of exclusion at the moment - that's a big challenge. And if you look at - you can look at any particular sector, you look at telecommunications and recognise how far behind we are on the African continent. But, you know, a long time ago when African leaders met in Nigeria and drew up the Abuja Treaty, one of the clear objections of establishing a common market on the African continent - which should be realised by 2025 - is to create space for Africa in an integrated global economy. We understand the need for that and therefore part of our battle is not to exclude ourselves but to create an opportunity for inclusion.

Quest:Now you're all nodding sagely at this...

Wieczorek-Zeul:I did not so far...My line is that we have a globalisation of markets, we have a globalisation of economy, of trade and what we also have, to a certain extent but have to develop further, is a globalisation of solidarity, a globalisation of values...

Quest: What does that mean?

Wieczorek-Zeul:It means, for instance, that the campaign for debt relief was a campaign of solidarity in globalisation and it had - it had results.

Quest:So why are we having such difficulty do you think managing globalisation?

Wieczorek-Zeul:I think it has got to do with the fact that you have, in the national economy in the national state, you have a government and in globalisation you don't have any international government.

Quest:Is the danger, Mr Wolfensohn, in that vacuum that is created, where you don't have a government, you don't have a transnational state, that vacuum is filled with corporations or with other super national bodies?

Wolfensohn:Well I think that you have a free market place generally. And I think getting back to one of your earlier comments on the issue of are we failing or are we succeeding, I'm not sure that the bank in any form that could be devised or the UN can control what is happening in globalisation. This is a system of nation states, each with its own set of rules, each with its own corporations, each with its own rich and poor and they're all coming together by forces which are certainly outside the control of the World Bank. What we need to do is to try and work with countries as we see the trends happening - and when I say countries I include civil society and corporations in those countries - and see if we can make it a more equitable world.

Quest:Now some of our e-mails from our viewers who have written to us from around the globe. Malcolm McCandless wrote to us from Scotland: Name just one thing that globalisation has achieved in improving the welfare of all human beings on this planet?

Manuel:No I don't think that we've succeeded yet because, in general terms, inequality is growing. It's growing within countries. In the US, for instance, real wages at the bottom end of the scale have fallen now in a way similar to what happened in the early '30s. So it's happening within countries and it's happening across the world. Now we are focused on the issues that can inform us - how many people a day live below a dollar? Or how many people can survive on less than two dollars a day? Those numbers are now recorded as part of world economic outlook issues, we have to focus and deal with these issues.

Quest: But back to Mr McCandless's question: one thing that globalisation has achieved improving the welfare of all human beings - just one thing - have a think about it while...

Wolfensohn:I'll tell what it's the green revolution - it's the development of both information and experience on seeds and on methods of agriculture which would not have spread around the world were it not for globalisation.

Wieczorek-Zeul:Well it's information, no-one - no dictator - can, anywhere in the world, suppress his people without there being an outcry in the international area, there is a universalisation of human rights and that is a good thing for all people.

Manuel:I'd like to endorse the views. I think that outside of these issues also healthcare opportunities. It's information, it's knowledge, it's that kind of spread which allows us to get through to all people. There still are - there still are some obstacles, clearly if you want knowledge to spread you need the means to spread it. I mentioned African telecommunications earlier but the opportunity now is there. We need to find the ways to unblock it.

Quest:Now on that question, let's move to telecommunications if we may, because I think there are - I think there are few moments in one's lives when there is the potential to take advantage of a revolution in our midst. We are in danger of squandering this revolution in internet technology if we don't manage it better for the developing world - is that fair?

Wolfensohn:Well it's not fair. The danger is there but it is probably the number one item on my agenda at the moment which is the development of a global gateway for information - a gathering of development information that can be made available even at village level, of the establishment of distance learning facilities around the world, working on the African virtual university where we're already in 14 countries. The development is phenomenal, we're in a new wave after the industrial revolution to a technological revolution and we must grasp it.

Quest:Are you putting enough emphasis on what the president is saying, do you think, as ministers in terms of looking at development in other parts of the world and technology?

Wieczorek-Zeul:Well I can't say on any colleague you know but it is a major point which we have dealt with in many discussions. There is one problem or one necessity, specifically, and that shows that in the type of development we are in it's not only the state on the one hand that can act or states together, you need, in this field, the economic - the private sector - you need to include them, you have to have civil society because those investments that are needed in this field will not be done only by states, it will have to be done also by the private sector. The question is does it go into the right direction and that is of importance.

Quest:I'm not forgetting your point. I shall put private sector to one side for just one second, if I may...

Wieczorek-Zeul: Well it has got to do with it nevertheless.

Quest:We shall come to that but I want to ask Mr Manuel again the question: is Africa, for example, ready to grasp the benefits, are governments in Africa ready to grasp and give their peoples the benefits of that technology the president talks about?

Manuel:I think many governments have taken huge strides forward. You've also had the arrival of democracy in many countries and I think this is - this has changed the opportunity and the fortunes of people. Of course we face problems, we face problems of on-going wars, we face problems of famine in the horn of Africa, we face problems of poor governments in parts and we face issues of disease. But with all of that the OEU summit in Algiers in July last year confirmed an approach that says we must endeavour. Now this means that we have to take on a campaigning posture as well. Amongst the issues that we have to campaign on it's for the opening of markets in the US and elsewhere, for as long as those remain closed you can't build a better life for people. So issues of trade are important for us.

Quest:Since you've delicately raised it, Luke Dealtry has written to us from the United Kingdom and wants to know: Why there are so many tariffs and regulations in place ... which do little more than safeguard a few Western jobs? Surely removal of arcane tariffs would do huge amounts to stimulate industry and help the alleviation of poverty?

Manuel:Luke speaks for me. The tariffs and the problem of non-tariff barriers that continue and I think the failure of the Seattle round of the WTO has been a huge setback for developing countries. It's been a setback.

Wieczorek-Zeul:Well I think the approach is necessary and for instance the European Union at the round in Seattle had proposed that there should be the complete abolition of tariffs and market restrictions to the poorest developing countries.

Manuel:Except on agricultural products which might enter the European Union because they protect agriculture...

Wieczorek-Zeul:Can I say I completely agree because there is a divergence and an incoherence within the positions of the industrialised countries and I'm quite sure we will not get anywhere in the question of social rules or ecological rules in the international globalisation process because developing countries will protest against that unless we are willing - the industrialised countries - willing to open markets in the agricultural field. That is a necessity and it has to be done.

Quest:And the fact is that, I mean I noticed this in my morning post - Washington Post - today that Congress is to vote on the new deal with Africa and the Caribbean countries within the next few weeks but we saw Glenys Kinnock's letter in the Financial Times - you may have read it - during the week saying that not enough was being done, the US wasn't prepared to open up its markets.

Wieczorek-Zeul:Well can I say one thing also? It is necessary. The developing countries within the WTO are the majority, so it's in their interest to organise and certainly we will support this line, to organise and to go ahead and take up their interests.

Quest:Were we helped by President Clinton when he suggested that economic sanctions was an appropriate tool to be used for those countries that - on the human rights question? Mr Wolfensohn it's one of those things that perhaps scuppered Seattle, I don't want to re-visit Seattle at the moment - I don't think anybody wants to re-visit that - but at the same time there is a point upon which there was a feeling that the developed world scuppered the deals.

Wolfensohn:Well I think it's very sad what happened in Seattle. The position of the Bank is clear and unequivocal and Trevor expressed it and let me simply say it is impossible to have effective development and encourage developing countries to develop their resources and play to their strengths if you don't open markets for them. It's not a complicated issue. If you, on the one hand, try and get them to build output and then deny them market access it doesn't work.

Quest:It's the left shoe, isn't it, it's the other side of the argument.

Wolfensohn:And you have a right foot and a left foot, you have to have both.

Quest:Why is it - why are people having such difficulty getting that argument across do you think?

Wolfensohn:Because of domestic issues, for example, in this country. Although the volume of developing country exports would be tiny in terms of global trade for the voters that are affected it becomes primary and so what you're having played out in the United States at the moment is a - particularly in an election year - is a focus on those people who will be misplaced as a result of competition from the outside. So it is a confrontation between domestic considerations, it's what Heidemarie was talking about before, we have to develop some global understanding as citizens of the world not just as citizens of countries. And that we've got a ways to go on that.

Quest:The problem is the moment we move away from the word globalisation itself it all falls about - consensus disappears. ... You can all agree that globalisation is a good thing and the moment we move away from that statement to define it into what it means, how it's enforced, the practicalities of opening up markets to make it a reality then the consensus goes.

Wieczorek-Zeul:Yeah but it's not a question of consensus, you know, globalisation is a fact of life as countries are a fact of life as the United States is a factor, I'm not discussing on the question whether this date is alright or not - it's a reality and you have to see to it how you get in such a reality social, equality and ecological rights.

Wolfensohn:I think Heidemarie's got it just putting the focus on the fact that internationalisation globalisation - the coming together of all of us - as part of a globe is reality, that's - the word is a pejorative word - globalisation - shouldn't be used, it is a fact. It's how you deal with it.

Quest:A dirty word.

Manuel:No it's how you deal with it that is the issue.

Quest:There there can be no - sorry you wanted to come in.

Manuel:No, I, you know it's back to values and ethics and I think it's taking of the vested interests head on. You know we're sitting with the position here where there's been, in principle, agreement on debt relief to highly indebted poor countries. Some five fourteenths of the gold sales - the profits of the gold sales - can't be used for debt relief because the US Congress needs the voter. This is an election year, Congress is not moving and therefore we're holding poor people in poor countries to ransom - that I think cuts against the kind of ethics that you need. It's in those kinds of instances that you keep raising what is vested and the only way to deal with these issues is actually to stand back and allow the issues to happen. And it does mean that some of the large economies have to take a view of themselves in the world.

Quest:That's - let's move on to perhaps one of those very issues :Hugh Acland has written to us: "I work for Merrill Lynch and apart from South Africa we seem to be ignoring Africa" - I don't think he necessarily means, or maybe he does mean Merrill Lynch, I don't know but he's certainly talking - for the purposes of law suits we'll assume he's not talking just about Merrill Lynch. "I work for Merrill Lynch we seem to be largely ignoring Africa. We have an obligation to quite literally share the wealth by providing poor countries with necessary tools, regulatory bodies and free markets to compete with us on the world stage" - that sums it up really doesn't it?

Wolfensohn:Well it sums up an element of it and I think he's right, we do need to do that and in fact that is what the Bank is trying to do to support the governments of these countries. And the governments of the countries, by and large - and Trevor's more expert on this - want that, I think the African countries want to build the structures, want to have the capacity to do this - is that not correct?

Manuel:Absolutely. Bearing in mind that these same markets are quite unforgiving, they demand a risk premium for Africa which prices a lot of the money outside of the reach which brings us to the other point why the World Bank and IMF are such important institutions. You do away with these institutions, you actually shut down access for the poor to what becomes a means of life.

Quest:And for the purpose of our viewers we're talking now about lending facilities - the ability to actually finance projects in the case of the Bank, structural reform in the case of the Fund.


Quest:If that is the case...what do we do to make it a reality - how do we manage it?

Wieczorek-Zeul:Well let's take Africa for instance. And there, I think, what would be needed is besides the question of better market access is to take into account what happens with the debt relief and could I remind that from the 36 countries - four highly indebted, poorest developing countries, 27 of them are in Africa - so the question is how is this money used? In the countries and I think it's important, as was decided, that it goes to the educational field, that it goes to the health sector, that Aids is really fought against because we might help with all financial possibilities if some of the trends are going on, there is going to be a disaster for the possibilities of this continent.

Quest:I just wonder, though, whilst what you say is - I hear what you say - the pictures we have been seeing in the last few days from, say, Ethiopia - that BBC News has been covering, the truly terrifying Biblical proportions of the drought - I wonder how we can all sit here and talk about these things when there are such realities taking place at the moment - it's in your part of the world.

Manuel:You see he makes a very important point about instances of famine always coinciding with the absence of democracy. Now it's an interesting viewpoint on this issue.

Wieczorek-Zeul:That's true.

Manuel:You see I think that when we talk of these issues there are - certainly for the developed world - two important sets of issues. The opening or the provision of market access and assistance with debt relief would be the two issues I would focus on. I think for developing countries we have responsibility of good governance and also economic polices that make sense, we can't defy logic on some of these things. And I think together we need to embark on a campaign for the reform of these institutions, these global institutions that are ours. I think it's dealing with those kinds of things together that says that we all have to make a contribution to a different set of outcomes. That provides a context for Ethiopia because I think, sadly, what some people would be saying is you've got droughts or famine on the one hand and on the other hand Ethiopia at war with Eritrea. And that kind of context I think then damages the prospect because we are also, sadly, dealing in a world where official development assistance has dwindled to a trickle in many, many countries.

Wolfensohn:Let me just say on Ethiopia and this is a good example of the way the world really is coming together to try and help. When we talk about the adverse side of globalisation the fact is that we have people and our various countries have aid agencies there trying to put together 800,000 tonnes of food right now and if you look, not just at that, but if I just think of this last year in terms of Turkey and Venezuela and East Timor and Kosovo - the international institutions may not get any credit for it but we're there front and centre, living in tents, doing the work, you can't help.

Quest:And the really dangerous part would be if you weren't there then we'd soon notice it.

Manuel:Of course.

Wieczorek-Zeul:Can I say on the Horn of Africa and Ethiopia, one thing that is, besides what Jim Wolfensohn said, is necessary and we asking that within the United Nations to have, if needs be, a kind of - I hope the English word is alright - an air bridge, you know, so that there is a quick dispersal and help for the food aid, that is vital, that's one point. And the second point is indeed right we have to appeal to the two countries to use all the knowledge they have not for helping the soldiers but for helping their own populations - that's important, they should stop war.

Quest:A few final thoughts. I want to bring this to events of the last 24 hours on the stock market. Now that's enough to cause private grief generally. Are you concerned, in any way, Minister by what we've seen in the last 24 hours on the US stock markets, could this preface something more serious?

Wieczorek-Zeul: Well it is always possible, it's very difficult to predict I would say but it shows to a certain extent that the question of the stock market is one thing, the question of real economy is the other point, and perhaps we should stress the question of real economy more, in order to create wealth and growth.

Wolfensohn:The real economic figures look very good for this coming year, particularly in the developing world where we project about 4.8% growth. I think what we've seen on the stock market is not unhealthy but very healthy. I'm with Alan Greenspan who has, for months, been warning about the over-valuation of securities on the market. It's never comfortable when the bubble bursts but I think it's probably in the long run very healthy.

Quest:What you're saying is it will consolidate down to a more secure market for the longer term?

Wolfensohn:Well I believe so having come from this industry I feel that I'm estranged from it in the World Bank but when you get companies valued at 100 times losses and that's a little difficult for me to understand.

Manuel:I agree...but I think that, you know, perhaps it's a warning what has been, you know, the risk of course is that so many people in the United States have been borrowing to invest and if monetary policy tightens and if on the back of that you have some fallout clearly you start seeing the downside, the extent of interconnectivity.

Wolfensohn:I would raise one other point on the debt forgiveness issue and that is that if we make it a norm that countries that borrow don't have to repay the biggest danger that you're going to have, in terms of markets, is that you won't have any private money available to lend to developing countries because they will say what happens in developing countries is that with the stroke of a pen some ministers and some NGOs come together and tell us to forgive all the debts. And I would say that that is a very dangerous thing. If it's done within the context of a sort of a bankruptcy type proceedings, so that it is parcelled up and you still have the ethic that if you borrow money you should repay then you will have continued markets but one of the hidden dangers of the HIPIC initiative is that [words inaudible] and the issue of repayment becomes unnecessary, then you will have really serious problems.

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09 Apr 00 | Business
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