Pakistan Institute of Development Economics



Globalisation: Threat or Opportunity? (The Iqbal Memorial Lecture)

Globalisation is transfonning trade, finance, employment, migration, technology, communications, the environment, social systems, ways of living, cultures, and patterns of governance. The growth of technology and globalisation mutually reinforce each other. Much of the process of g1obalisation is historically not unprecedented, but the technology, the setting, the absence of a single dominant centre, and certain features such as the replacement of trade of raw materials for manufactured products by largely intra-sectoral trade, are new. International interdependence is growing, and to some extent and partially, so is international integration. But it is accompanied by disintegration and fragmentation of other parts. Partial international integration (mainly of the elites), without global policies, leads to national social disintegration. Is globalisation a threat to humanity or an opportunity? A tentative balance sheet is drawn up. Markets, to be efficient, have to be embedded in a framework that enables their productive potential to flourish and to be used for socially and ecologically sustainable development. The reduced power of national governments combined with the spread of world-wide free markets and technological innovation without a corresponding authority to regulate them and hold them accountable has contributed to the marginalisation of large regions and groups of people. The state has become to some extent ungovernable, while the global society is ungoverned. Unemployment,- poverty, inequality and alienation are increasing, partly (though not solely) as a result of this process. Crimes, drugs, terrorism, violence, civil wars, diseases, and environmental destruction are also becoming globalised. In the struggle of international competition capital, technology and high skills dominate the more readily dispensable factors unskilled labour and the environment. Cost reductions are carried out and labour and nature suffer.

Paul Streeten