The Australasian Institute of Banking of Finance, of which I was a member, once invited me to speak to a group of bankers in Sydney on Globalisation.
The reason for their choice of topic was that whenever G7 countries or the World Trade Organisation met, there were street protests and stone throwing by agitated young men and women. Some days before I spoke, there were angry demonstrations in Prague, with students hurling stones at police, politicians and policy makers. Why would anyone protest at global forums discussing global issues?
Throughout the one hour I had, talking to some bored bankers, I emphasised the point that these protests would widen and there will be nation-wide protests and mayhem if global inequalities are not fully addressed. The main point of my argument was that there will be severe collateral damage – a term used in military parlance – to some 80 per cent of the world population if the trend of globalisation which facilitates and aids the power of capital to cross borders and mobilise resources creates an economic jungle where free foxes roam among free chicken . The new economic model, I said, should be based on a fair sharing of global wealth and a collusion of intelligent interests which regarded people as the most essential resource of any society. I suggested that the prediction of increasing instability across nations is not prophetic. It is simply based on well crunched numbers of wealth and poverty in which some five percent of the world owns 95% of the wealth.
Globalisation and the emerging freer trade environment across nations and trade blocks such as the EC did help spring-board a quantum leap in manufacturing and trading. It did transfer much of the production technologies to less developed countries. It did boost the coffers of richer nations some of which, like Britain which once held sway over a colonial empire, to re-colonise through trade and investment. And it massively helped China, shackled at home for years without international recognition, to leap-frog its economy and venture into mining resources development across Africa and many other developing countries.
But the most significant and most probably not-intended outcome of globalisation is that it helped totalitarian regimes in the developing world to amass billions of dollars of ill-gotten wealth, spread their power-base across businesses and the armed forces and snuff out the essential economic freedom globalisation intended to bring to millions across the world.
Globalisation did take the wrong turn. It brought about a defined economic inequality among large masses and created a lop-sided wealth accumulation process both among the elites of the developed world and that of the developing countries.
The backlash we today, in Tunisia, in Yemen, In Egypt, in Lybia, in Syria, in Israel, in Bahrain, in Oman and in India where people have defied government orders and have taken to the streets to protest wide-spread corruption is perhaps the first visible bubbles of a major human volcanic eruption awaiting to explode. Many neo-economists and think-tanks have constantly warned of the disconnect between the wealth of global resources and the state of human poverty.
Jeffrey D. Sachs, director of the Earth Institute at Columbia University, a passionate advocate of global wealth sharing states in his book End of Poverty – Economic Possibilities of Our Time : "Extreme poverty can be ended, not in the time of our grandchildren, but our time”. Deemed “ the most important economist of in the world” by New York Times Magazine, and with over twenty-five years of experience observing the world from many vantage points, Sachs has shed light on the most vital issues facing our planet: the causes of poverty, the role of rich-country policies, and the very real possibilities for a poverty-free future.
Globalisation, despite its good intentions for the wealth of nations, has caused a collateral damage on the poor and has set in motion a powerful underground of resentment and revenge against all who have literally plundered other people’s wealth and resources and left them poor and hungry. The signs and signals are all there to read and no amount of military oppression can subdue the people’s vision of their own lives and that of their children and grandchildren to live with dignity. Bringing Egypt’s Mubarak or Tunisia’s Ben Ali to court for embezzlement of a nation’s wealth is simply undertaking a patchwork repair on a fault-line deep underneath an economic core, simmering hot and about to turn into a global earthquake.
If wealth of nations are to be shared, and increasing collateral damage on the vast majority of the earth’s poor is to be avoided, world leaders, not necessarily economists, must redefine value of wealth in terms of human aspirations for all.
There does not seem to be an alternative.
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