Capítulos
Special Edition 1996
Life in the Global Village
Michel Camdessus
Managing Director of the International Monetary Found (IMF)
Extracts from the first part of the speech given at the «International Economy Colloquium, for which future», held at the Jacques Maritain International Institute in Rome in November 1995.
We have just celebrated two important anniversaries, one with a great deal of fanfare: the fiftieth anniversary of the United Nations and the Bretton Woods Organizations; the other more modestly: the thirtieth anniversary of the _Gaudium et Spes'. Both anniversaries invite us to reconsider our vision of a better world that has yet to be built, especially in light of two significant events which have altered the course of the world economy in recent years: the fall of the Berlin wall and the beginning of the acceleration of the globalization process.
These two events hold and will certainly continue to hold vast consequences for human liberty and fraternity. Both herald a unified world in the future that will be characterized by an economy operating on a planetary scale and by more livable conditions for mankind, and a large gust of hope should therefore be sweeping through the world. Instead of this, however, the world is floundering in a sea of doubts in a desperate search for orientation. It has responded very unevenly to the hopes aroused during the second half of this century. It has run out of steam in the race between misery and development; and fear, not hope now reigns.
For those responsible for any parcel of common good, the task they face today is not an easy one. They must manage a painful transition towards a new balance and come up with new strategies and institutions to assist them in the hazardous and painful journey towards world unity.
You have come here today to think about «Economy, for which future» and to have a specialist in international economics share his thoughts with you. (...) I would therefore like us to consider the following questions:
What sense can be made of the uneasiness, the fear, that exists in the face of the generalization of market economies and the move towards a unified world? What do they reveal of the values and new priorities that now prevail in the search for the common good of tomorrow, the twenty-first century?
I. The characteristics of globalization
I am particularly interested in this uneasiness as the international community has given the institution I run the specific mandate to make the world, and the developing countries and countries in transition in particular, participate in the benefits of the market and globalization. The market and globalization, however, are rapidly developing processes themselves.
I will not spend much time discussing the market economy process as I adhere completely to the analysis made in the encyclical _centesimus annus' and therefore categorically state that accepting and promoting the central role of the market is equivalent to accepting competition as the driving force of progress, although its potential to crush the weak and non- participants must not be overlooked.
This means that we need to acknowledge that the State and international organizations have an essential mission to fulfill in terms of supervision and organization in order to ensure that competition is both free and concordant with the demands for justice and respect for our basic values, which do not follow the same logic as prices. The organization of the global village will therefore have to reconcile free competition and solidarity and through it ensure respect for each individual and all that is human.
Globalization is a developing phenomenon. Let us consider some of the facts:
The process began some time ago, but the acceleration of the phenomenon has only been the feature of the last part of this century. Various factors are together speeding up the process:
-The end of exchange controls, financial innovations and progress in data transmission that are establishing a worldwide financial market that functions in real time.
-The organization of large companies according to structures of worldwide networks that increasingly ignore national borders.
-In information technoloy, the universal and instantaneous transmission of data.
-In politics, the end of the «great divide» and the at least partial triumph of the alliance between democracy and the market.
-Finally, the growing awareness worldwide that certain fundamental problems of our times are basically transnational in nature. Environmental protection is the most obvious example, but drugs, AIDS and money laundering are also problems with an international scope that can only be partially resolved by each State or country acting alone. The dynamics of these problems would in fact lead us to believe that we are on a one way road towards world unity.
Are we then about to witness the materialization of the utopian dream of a global village, the «happy ending to the story»? Of course not! Life for many today is more like a hostile jungle of economic instability, margination and shrinking opportunities. Actually, like all great phenomena of history, globalization entails both opportunities and risks. I shall now try to define them.
II. The opportunities
The opportunities are there. Under the right circumstances, this phenomenon offers extraordinary opportunities for progress in terms of organization, effectiveness, productivity, the diffusion of knowledge, improvements in living standards and relations among peoples. In short, it could contribute towards growth around the world that is stronger, more balanced and more favourable for the development of the poorer countries. Consider, for example, the combined effect of the emergence of a unified world money market and the persistent application of strict financial and macroecnomic policies in a notable number of developing countries that has enabled private capital flows towards these countries to increase tenfold between 1982-89 and 1990-94 to stabilize at an average of US$105 billion a year, which is approximately equivalent to twice the amount of development aid granted which, incidentally, is tending to decline. We therefore face an opportunity to speed up the development process in a way that solidary aid efforts are not able to. Consider also that it was actually the strong growth of the developing countries that prevented the world as a whole from entering into a recession in 1991 and 1992. This has demonstrated that they are capable of building the autonomy of their growth opposite the industrialized countries who are consequently no longer the sole engines of world progress.
Regardless of how fragile their success and how incomplete their results may be, especially in social terms, the developing countries that have made the adjustment are not only showing the other developing countries the road to progress, they are also showing the industrialized countries that the most effective way to accelerate and consolidate their own activities and the best investment to make is to accelerate and consolidate their full integration into the world economic system of developing countries and countries in transition, which is nothing but the acceleration of globalization. The opportunities are there for the taking.
III. The risks
For many of our contemporaries, however, globalization is at the moment above all a universe that is being built without them and they know more about its negative effects than anything else.
One fact is patently clear: the heterogeneity of this phenomenon affects goods, services, capital and, fairly unequally, people. Everything is happening as if the global village was still uninhabited. The dangers involved, especially the social ones, are highly visible and are generating a kind of anxiety, the new end of the millenium «great fear». This fear is felt particularly strongly in the old industrial nations, even in countries such as my own, France, which in macroeconomic terms will obviously benefit from globalization. Yes, in a country that is proud of its universal openess, the country of «the rights of man», that is always ready to wave the banner of any universalist cause, confusion abounds and globalization (which is viewed with pessimism) has become the subject of the most heated national debates. Robert Reich reflects this clearly in his analysis of the organization of globalized companies into networks[1]: «The centrifugal forces of the global economy destroy the bonds of solidarity among citizens, enrich the best qualified even more and condemn the rest to a worsening of their living standards, especially those who hold a personal kind of production or services job who are condemned to a more precarious situation and lower rewards.»
What applies at the individual level also applies to a certain extent at the country level. The heterogeneity of the globalization process and the diffusion of its benefits runs the risk of excluding some countries or even whole regions, certain parts of Africa in particular.
This risk of excluding the poorest is increased by the fact that the most advanced countries tend to concentrate their development aid in the poor countries that seem to be the least willing to mobilize all their resources to get ahead on their own. Two of the concomitant elements of this response are demographic pressures and the pressure of mass migration.
The way in which market economies are being implemented in old planned ones or the way in which reforms are being adopted in many developing countries heightens the danger even more and brings to mind the cruelest instances of wild capitalism at the end of the last century. The need for work and monetary income and the weakness of the State are so great that the individual's and workers' rights are often trampled. Corruption and violence multiply. Polluting factories are transplanted to other countries without concern for the environment or the population's health. There is growth of course, but not the the high quality growth our institutions are trying to promote. What is such a globalization process worth if it means that cynics can get away with breaking the law and all ethical norms?
Then there are the additional dangers of worsening trade disputes, of increases in illegal trade practices and financial crises. We should remember that in the past ten years the world economy has been shaken at least three times by the burden of excessive indebtedness, aberrant exchange rate fluctuations and speculative waves. The most recent crisis, the Mexican one of 1995, (the fourth!) exposed the financial risks involved in globalization.
IV. Responsibility and solidarity
What should we therefore think of such a mixture of opportunities and dangers? Are the hopes of seeig the dynamics of globalization pave the way for a unified and more fraternal world mere chimeras? Or can we still believe in what Teilhard de Chardin once said: «it is God Himself who draws mankind together and reaches them through the unifying process of the Universe»?. Obviously each one of us will answer this question on the basis of his or her own convictions.
In my case, I have turned to another renowned Auvergnese, Blas Pascal, for an answer: «You have to place your bets!» I bet, therefore, that we are witnessing the signs of the times Saint Matthew spoke of [2], a new opportunity that has been given the world. There is nothing to lose by assuming the bet and there is much to gain: a tremendous energy for the fraternal construction of a better world. A bet, yes, but a stimulating one, as it forces us to take on these ambivalent dynamics in such a way that they act together for the advent and organization of a more fraternal society.
The signs of the times never announce miraculous solutions to the world's problems: they are an invitation to make an effort borne from hope. We know this. It is a question of humanizing the globalization process, ensuring all its potential for growth and solidarity bears fruit, and keeping the forces of exclusion at bay. Two values, both of which are dear to the Christian concept of mankind take on particular significance within this approach:
-the responsibility of each individual, although I would rather speak of the responsibility of each country, for building its own destiny and making an irreplaceable contribution to the collective common good;
-solidarity to harmonize the workings of competition and co-operation.
Our common destiny depends largely on the strength or weakness of the responsibility-solidarity binomial.
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