Demonstrators protesting globalization made their voices heard at the World Economic Forum this past weekend. RFE/RL correspondent Breffni O'Rourke reports from Davos, Switzerland, that many speakers at the international conference acknowledged that globalization could harm some poor countries in the short term, but they said its long-term effect would be to benefit all.
Davos, Switzerland, 31 January 2000 (RFE/RL) -- The Swiss alpine resort of Davos presented two very different pictures to the world this week.
One was of the rich and famous attending the World Economic Forum, discussing trends in economics and politics, particularly the phenomenon of globalization, meaning the integration of the world economy.
The other picture was of demonstrators howling at Swiss riot police blocking the road in Davos with huge wire screens fitted to the front of jeeps.
The two scenes are interrelated, because the demonstrators believe that globalization will undercut people's standards of living in the developed world and lead to environmental damage, largely through careless industrialization in the developing nations.
The protests echoed -- but on a much smaller scale -- those that broke up a World Trade Organization meeting in Seattle in December.
Few of the speakers at the forum, which is attended this year by some 1,000 political and business leaders, denied that social and environmental disruptions seem certain in the wake of globalization. Leader after leader, including Turkish Prime Minister Bulent Ecevit, and the head of the World Trade Organization, Mike Moore, said they recognized the difficulty in popularizing a policy which can entail job losses or a lowering of incomes. As Ecevit put it:
"A society where wealth, education, and social order are excessively left to the discretion of the market mechanism, may eventually become uninhabitable, even for the wealthiest."
King Abdullah of Jordan, noting the preoccupation of the Davos forum with the development of the Internet, said that the Internet and the new technology could become what he called a cruel disillusion. By widening the gap between the haves and have nots, it could in future make it appear that this divide can never be bridged.
U.S. President Bill Clinton, who briefly visited the forum from Washington, also said he recognized the dangers of globalization. But he said that no economic mechanism yet devised had proved as clearly as the free market system that it is capable of creating wealth. Clinton said globalization is merely the extension of long-established trade patterns, and has the potential to spread financial well-being throughout the world.
"Listen to this -- this is something that I think the people from the developing world who oppose the Word Trade Organization should think about. From the 1970s to the early 90s, developing countries which chose growth through trade grew at least twice as fast as those who chose not to open to the world. The most open countries had growth that was six times as fast."
Clinton recalled that in the period after the First World War, the nations of the world turned inward, towards protectionism, and that had led to a disaster of huge proportions. After the Second World War, the West had turned towards openness, and the economic benefits of that were indisputable.
He also said that historically, great technological change has inevitably led to social disruption. The industrial revolution, which started some two centuries ago, had led initially to widespread fear, Clinton said, and its immediate effects were a rise in social abuses and a drop in the standard of living for many workers. But eventually, people gained from the changes, and became more prosperous than before them.
Clinton prophesied that the same will be true of globalization. The thing to do, he said, is to compress, to speed up the period of disruption, so that the people will be willing to suffer the difficulties to get to the worthwhile goal.
The organizer of the World Economic Forum, Klaus Schwab, and other speakers called for big corporations to shoulder the burden of social responsibility, to share a vision of how their operations can be used for the global common good. Schwab says that by acting responsibly, companies eventually will reap benefit for themselves.
But such appeals illustrate the contradiction that appears to be at the very heart of the globalization debate. That is that the whole culture of business is oriented toward operating for profit in the most efficient way possible -- and profit is measured in the short term, year to year. Yet the speakers were asking businesses to abandon short- and mid-term corporate benefit in pursuit of long-term general benefit. That is one idea that may be difficult to sell.
Looking after the well-being of the people has always been a task of government, not of business. That's why Clinton told his audience in Davos that the future will require not weaker government, but stronger.