The wave of globalization that began in the 19th century was driven by technological changes in transport and communications, population growth, and migration. It ended in global war and economic collapse. The current wave of globalization, driven in part by similar forces, appears to be more enduring and to be associated with trends toward participatory government and economic development. The briefs in this collection have described the welfare-enhancing aspects of globalization today, but they have also sketched scenarios in which vulnerable groups may be hurt. The authors have emphasized the need for complementary domestic and international policies to ensure that those vulnerable groups, particularly the food-insecure and the poor, benefit from a more integrated world. This brief concludes by looking at governance and public policy issues to achieve the objective of substantially alleviating, or eliminating, hunger and poverty in a globalized world.
DEVELOPING COUNTRIES
Effective domestic policies in developing countries are key for growth, poverty alleviation, and food security. These policies include maintaining a stable macroeconomic framework; promoting open and competitive markets; ensuring good governance, transparency, and the rule of law; implementing programs and investments that expand opportunities for all, with special consideration for vulnerable groups; and providing adequate safety nets.
Because three-quarters of the world’s poor depend directly or indirectly on agriculture, rural development has to be given special attention. Some have argued that increased agricultural trade protection in developing countries would ease poverty and promote food security. But this would be equivalent to a regressive tax on food consumption, which would harm poor consumers and mostly benefit large agricultural producers. A better approach for developing countries is to eliminate policy biases against agriculture; increase investments in health, education, and human capital in general; improve management of land and water resources; facilitate land ownership by small producers and landless workers; promote improved agricultural technology, rural infrastructure, and nonagricultural rural enterprises; and encourage organizations to expand the social capital and political participation for small producers and the poor. Food security in developing countries also requires equitable economic growth and appropriate food use, which depend on empowerment of women, health and education investments, and better governance. Developing countries may also need policy instruments to protect the livelihoods of the rural poor from import surges, and, in the current World Trade Organization (WTO) agricultural negotiations, they may legitimately insist that industrialized countries first reduce their higher levels of subsidization and protection of agriculture.
INDUSTRIALIZED COUNTRIES
Industrialized nations set the global economic, political, and environmental agenda and context. They therefore cannot evade their responsibility to make this world a better place, especially for the poor. A number of broad policy issues require attention.
Trade liberalization in products of interest to developing countries. Low-income countries have historically faced high trade barriers in industrialized countries in products such as agriculture and textiles that best reflect the developing world’s human and natural resource endowments. The Uruguay Round began to address some of the imbalances that developing countries suffer in international trade, but it did not rectify them. Efforts to rectify those imbalances should continue. In particular, current negotiations must eliminate the combination of agricultural protectionism and high subsidies in industrialized countries that has limited agricultural growth in the developing world and weakened food security in vulnerable countries by putting their domestic production at a disadvantage.
International capital and aid flows. The last 20 years have witnessed serious international financial crises, several of which arose from policy changes in industrialized countries that affected exchange rates, interest rates, and capital flows, with destabilizing effects on weaker countries. Although developing countries must reduce their vulnerability through better macroeconomic and financial policies, these may not be enough if at the same time the main industrialized countries do not foster world financial stability with adequate macroeconomic policies. Moreover, the poorest countries, lacking access to international capital markets, need resources through aid flows. They would benefit from the acceleration and expansion of the Heavily Indebted Poor Country Initiative (HIPC) and the implementation, and future increase, of aid targets by donor countries. Finally, international financial institutions should increase funding for rural and agricultural development, poverty alleviation, and health and nutrition interventions.
Peace, democracy, and good governance. Continued international diplomatic and political engagement and financial support is crucial to bring peace and reconciliation to countries affected by conflict and to sustain fragile transitions toward democracy. Otherwise, regional security problems and humanitarian crises will keep recurring. Improved codes of conduct and regimes governing trade in conventional weapons appear essential. Rich nations must also ensure that their firms abide by anti-bribery codes and that there are no safe havens for money laundering, while strongly supporting anticorruption efforts in developing countries.
Environment. Global environmental concerns, from climate change to stressed ecosystems, are complex and addressing them will involve tangible costs. But costs and uncertainties should not obscure their important implications for the food security, health, and nutrition of the world’s poor. Deteriorating environmental conditions may reinforce vicious cycles of conflict over resources and humanitarian crises, and the poor will pay the higher price. Complaints in industrialized countries about developing countries enjoying unfair trade advantages from presumed lax environmental regulations (which, if true, would have only local effects) appear inconsequential when compared to the larger responsibilities of rich countries in shaping global environmental conditions that may adversely affect some of the poorest of the planet.
Technology and public goods. Expansion of adaptive research on agricultural technology—biotechnology in particular—that focuses on the needs of poor farmers and consumers in developing countries can contribute to enhanced food security, nutrition, and health. Yet, during the 1990s, growth in investment in agricultural research in and for developing countries stalled, and for some regions even decreased. Industrialized countries can help by fostering a serious debate over environmental, health, ethical, and equity concerns with respect to both agricultural biotechnology and agricultural research in general. Most importantly, they can provide scientific and financial support for technology development in poor countries and facilitate creative public-private partnerships. Similar arguments apply to research on health issues that overwhelmingly affect the world’s poor. Finally, the proper balance between public- and private-sector concerns about intellectual property rights continues to be debated, indicating the need to explore that relationship further.
Establishing viable political coalitions, domestic and international, to sustain the needed institutional and financial commitments is just as important as defining adequate policies. The notion of supporting globalization with appropriate complementary policies (as suggested in this brief) is not universally accepted. Some have argued that globalization erodes the fiscal resources of the state, undermining the implementation of necessary policies just when funds are needed to help people affected by their integration into the international economy.
More fundamentally, several critics of globalization consider participation in the international economy as the root of all problems. Some see the world as monolithically controlled by powerful governments and corporations, with poverty resulting from a chain of international exploitation that leads from the very poor to the very rich. In a different but politically more powerful tradition, protectionists and isolationists join forces, based on narrow views of economic and national self-interest, to oppose the process of global integration and the establishment of better institutions of global governance.
The current discussion echoes arguments after World War II. Having experienced the horror of two global wars and the Great Depression, the world needed an international architecture to prevent similar tragedies. Economic nationalists, however, wanted to reduce foreign ties through protectionism. The left, in the Leninist tradition, believed that the expansion of capitalism worldwide could only lead to more crises and war among the imperialist powers. Political nationalists advocated isolationism and unilateralism in foreign affairs, always fretting about possible losses of sovereignty. Outside the United States, there were also voices that criticized an international system that was perceived as an instrument of political and economic domination by the economic superpower emerging from the wreckage of World War II. Similar arguments appear in today’s debate on globalization. But, now as then, global problems require global approaches and institutions. Protectionism, isolationism, and unilateralism will not solve them.
The optimistic view of globalization begins by recognizing that the process of world economic integration has generated levels of wealth never seen before, potentially providing the resources with which to confront global poverty and hunger. Another encouraging trend is the worldwide advance of democracy since the 1980s, in part influenced by the globalization of information. New communication technologies have eroded the information monopoly of nondemocratic political systems, and abuses of power and corruption that went unnoticed before are being exposed. Better communications have also linked societies more closely, with international alliances being formed to confront global concerns. The notion of monolithic corporate control is contradicted by obvious differences in interests and behavior among corporations, opening the way for different coalitions, as shown on a variety of issues, from climate change to affordable drugs.
Just as the expansion of markets and democracy in the developed countries over the past 50 years increased welfare and helped reconcile conflicting social interests, the world can now move in the same direction, beginning with a concerted effort to combat hunger and poverty. In addition to the obvious and compelling humanitarian arguments, enlightened self-interest also dictates the need to do so. Poor developing countries continue to spawn health, environmental, military, and humanitarian crises, while poverty and hunger deprive the world of the creative potential and economic contribution of billions of human beings.
The latest wave of globalization has lifted human welfare to levels never experienced before. It has helped create enormous wealth. The persistence of poverty and hunger amidst affluence is an avoidable moral tragedy and a drag on the world economy. Poverty and hunger are problems that can be addressed, if humanity, particularly those better off, can summon the political will to do so.
Eugenio Díaz-Bonilla (e.diaz-bonilla@cgiar.org) is a research fellow in and Sherman Robinson (s.robinson@cgiar.org) is director of the Trade and Macroeconomics Division at IFPRI.