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Cairo consensus: reforms as a path to equitable globalization
Natalia Dinello
Senior Political Scientist, the Secretariat of the Global Development Network
The beginning of the 21st century has been marked by a broad consensus that globalization is remaking the world. However, the discussion of forces behind globalization and its effects revealed a sharp polarization of views. How extensive is contemporary globalization? ... What has globalization achieved and what has it failed to do? In heated debate centered on these questions, advocates and detractors of globalization invoke value imperatives and appeal to rationality, enter into theoretical discourse and present empirical evidence, and express their either deeply personal or deliberately detached, academic-like, stance. And always issues of fairness and justice are a focus of the arguments for and against globalization and interpretations of its past and future.
The Fourth Annual Global Development Conference, whose theme was Globalization and Equity, added a chorus of opinions to this debate. ... Most researchers and policymakers highlighted the potential of globalization to improve the human condition and attempted to define the paths toward a more equitable world. What emerged as the Cairo consensus emphasized the importance of human intervention as a means of increasing the benefits of globalization and mitigating its negative effects. ... And it endorsed a measured entry of peripheral countries into the global world—to be tempered by safeguards for the most vulnerable groups and compensation for losers from globalization. ... Participants referred to reform of both national and international institutions and stressed its significance for making globalization more inclusive and balanced, creating opportunities for all. ... The core papers selected for this review are those prepared for plenary sessions, including a policymakers’ roundtable, and break-out sessions on regional perspectives on globalization and equity. ...
Considering GDN’s global outlook and its agenda of promoting policy-relevant research to ensure sustainable development and alleviate poverty, the conference participants were eager to plot positions of the various developing regions on the world map—in terms of who is in and who is out of the globalization game. ... The Middle East and particularly Sub-Saharan Africa are marginalized, if not altogether out of the globalization game. ... But the prevailing mood on the continent is that of discontent due to the perceived effect of globalization on inequality. ... However, as acknowledged by Chia Siow Yue, a researcher from Singapore, a general perception of globalization’s positive role in generating growth and employment has been questioned with the onset of the 1997 financial crisis, when the East Asian economic miracle revealed the high costs of globalization. Compared to East Asia, South Asia has had a brief and rather limited experience with globalization. According to Sisira Jayasuriya, a Sri Lankan researcher, South Asian economies have yet to be exposed to the broader currents of globalization through international capital flows of similar magnitude to those of East Asian countries, and the short horizon of their global engagement complicates an assessment of its effect.
Central and Eastern Europe and the Commonwealth of Independent States (CIS) are the newcomers in the globalization game. As indicated by Boyan Belev, a Bulgarian researcher, countries of Central and Eastern Europe demonstrate an intention of or an aspiration for globalization. However, their benefits from globalization are meagre to date. Moreover, the closer these countries come to the real breakthrough into the larger world in terms of joining the European Union, the sourer the debate on the implications of globalization becomes, with anti-globalizers strengthening their voices. Similar to Central and Eastern Europe, integration of the CIS countries into the world economy has been part of a more complex process of transition from a state-planned to a market economy, which makes it difficult to separate the effects of globalization from those of transition. However, as demonstrated by a Russian researcher, Ksenia Yudaeva, even the countries that pursued active globalization had problems enforcing this policy, and the integration proceeded slowly. ... Based on several measures of globalization, such as the increase of trade/GDP ratio, the ratio of foreign direct investment to GDP, and the rate of immigration, Ali Abdel Gadir Ali, a researcher from Kuwait, came to the disappointing conclusion that the Arab region has been left out of the process of globalization. ...
The mapping of the globalizing world has reflected drastic variations in the degree of different countries’ involvement in globalization. ... A combination of national (and regional) interests and internal and external conditions of their pursuit may also be behind the countries’ involvement/non-involvement in globalization. Understanding the reasons is, however, impossible without a thorough exploration of the perceived costs and benefits of globalization.
Is globalization a blessing or a curse?
Reflecting the theme of the Cairo conference, responses to this question focused on the effects of globalization and globalization-induced growth on inequality. Probably the most cited findings in this respect were those of David Dollar and Aart Kraay, who showed that globalization and economic growth raised the incomes of the poor in 18 Asian countries by about as much as they raised the incomes of the non-poor. ...
On the other side of the spectrum are the studies that concluded the opposite—that current patterns of growth and globalization increase income disparities and hinder poverty reduction. Oxfam—an international organization dedicated to fighting poverty worldwide—characterized globalization as generally anti-poor and anti-growth. ... But even in East Asia the 1997 financial crisis worsened poverty and contributed to resentment towards the globalization process. ... Although it would be wrong to interpret these trends as a result of globalization rather than economic and political transformation, the combined negative effects of the former communist societies’ liberalization and globalization are nevertheless striking. ...
In an intermediate position, the series of OECD 2001 studies showed that globalization is not the major cause of income inequality and poverty, although it contributed to the poor performance of a number of developing economies. Wherever inequalities are acute, globalization tends to make them worse, which suggests two-fold implications for development policy: first, globalization should be complemented by policies that create a more equitable distribution of human capital and assets, particularly for vulnerable groups, and, second, the speed and sequencing of external and domestic liberalization should take into account the institutional capacity to undertake economic transformation and manage its risks.
In addition to exploring macroeconomic relationships between globalization, growth, and poverty, the Cairo conference also raised more subtle issues of factors and dynamics of persistent inequities in a globalizing society. ... It should demonstrate how and why differences in the conventional ascriptive characteristics affect one’s achievement despite the liberalizing forces of modernization and globalization.
“I have a dream”: globalization with a human face
To evaluate the status of globalization and participation in it of various regions of the world, it is important to note the attained benchmarks, identify the remaining challenges, and understand the prevailing trends. ...
Reflecting aspirations of Africa—the poorest continent dependent on the export of natural resources—Mkapa, a participant of the policymakers’ roundtable, spoke about “globalization with a human face, globalization that cares for the globe.” To Mkapa, such globalization connotes giving a voice to developing countries in their relations with developed economies. ... A conversation from the position of power cannot produce a humane world and secure globalization for the good of all. ...
All three panelists at the policymakers’ roundtable—Mkapa, Mubarak, and Zedillo—agreed on at least two points: Globalization with a human face means respect and reciprocity between the developing and developed worlds, and an improvement of the human condition is beneficial for all parties involved in globalization. Going beyond the policymakers’ conclusions, Suzanne Mubarak, the first lady of Egypt, defined a humane globalization more broadly, endorsing “global values that emphasize peace, generosity, tolerance, and justice” and the “adoption of a global public ethic.” In her keynote address, Saskia Sassen, Ralph Lewis Professor of Sociology at the University of Chicago, stretched this definition even further, stressing the importance of freedom, human rights, voluntary action, and participation of citizen networks in the globalization process.
Approximate Word count = 6569
Approximate Pages = 26.3
(250 words per page double spaced)
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