- The Washington Times - Monday, October 21, 2002

At the heart of continuing anti-globalization protests is the belief that globalization, rather than fulfilling its promise of equalizing gaps between developing and developed nations, has actually hurt less industrialized countries.
But supporters of globalization claim the opposite, that gaps in economic and human-development indices are actually shrinking worldwide.
Who's right? It can be hard to tell. There is more than one way to measure globalization and its impact.
Although globalization is often evaluated in financial terms like gross domestic product (GDP) and income inequality, framing the debate in financial terms misses the point, according to scholar Indur Goklany.
Rather than income inequality, the central issue is whether globalization advances human well-being, Mr. Goklany wrote in a recent policy analysis for the Washington-based Cato Institute.
Measures like infant mortality, literacy rates, life expectancy and access to safe water say more about a country's condition than GDP, Mr. Goklany says. Although increased financial resources often lead to improvements in those indicators, "human well-being is not synonymous with wealth," he wrote. Wealth's main significance stems from its potential to improve human welfare.
The technological and economic gains of the past half-century mean that "the average person today lives longer and is less hungry, healthier, more educated, and more likely to have children in a schoolroom than in the workplace," says Mr. Goklany.
Despite continued gaps in wealth levels, "the poor are better off because they benefit from the technologies developed by the rich." Globalization, according to Mr. Goklany, helps developing nations capture the benefits of contact with wealthier, more developed nations.
But much of how deciding how to measure globalization depends on how one defines it.
In an economic sense, globalization is mainly "an increase in economic transactions across borders," said Matthew Slaughter, a professor at the Tuck School of Business at Dartmouth College.
Under that definition, GDP is a useful indicator after all. "The GDP tells you what's the value of all goods and services that a country makes in a given year," said Mr. Slaughter. GDP, and particularly GDP per capita, can help show how successful a country's economy is, he said.
"How much or how little a country produces has a lot to do with global forces," Mr. Slaughter said. By that measure, globalization helps countries close the income gap between developed and developing nations.
Mr. Slaughter acknowledges some of the truth in Mr. Goklany's thesis. "A lot of times economists will say that if you can get an economy to grow more, you'll have the resources to address human development problems," he said.
But the relationship remains undefined.
"It's not perfectly in lock step," Mr. Slaughter said. The United States, for example, has the world's highest GDP, but not the world's longest life expectancy. That belongs to Japan, according to World Health Organization data from 2000. The United States is No. 24 on the list.
And while GDP isn't always a reliable indicator of globalization, other financial indicators can still be helpful, said Robin Broad, professor of international relations at American University and editor of a new book titled "Global Backlash."
"To me, GDP in itself tells you nothing about that country's economic globalization. Rather it's related to [another] question: What is the impact of globalization on economic and development indicators?"
"The key debate is: What has been the impact of accelerating integration in the global economy economically, socially and environmentally?" she said.
While human-welfare indicators can be and are affected by economic factors, there are more issues at play, broadening the definition of globalization.
Globalization means "more interactions, meaning not only economic ones like more trade or more capital flows, but having more interactions in general, more people traveling, more relationship between political parties," said Eugenio Diaz-Bonilla, an economist and trade expert at the International Food Policy Research Institute in Washington.
Such a large definition of globalization would need larger measures, which, like Mr. Goklany's yardstick, involve examining noneconomic, human-welfare indices, not just GDP.
"Those [human-welfare] indicators in general show improvements over the last four decades," Mr. Diaz-Bonilla said.
But even when there is agreement on goals less child labor, for example, or increased access to safe water there is still the matter of determining how integrated into the global marketplace a country's economy is.
For example, Thailand and Malaysia might appear to have similar levels of globalization by standard economic indicators like trade across international borders and foreign investment, said Miss Broad.
But "because Malaysia never amassed foreign debt, the government never found itself confronted with a significant debt crisis," she said. In contrast, Thailand received a series of International Monetary Fund and World Bank loans "that have come with conditions attached that reduce the Thai government's ability to set its own economic course without adviser influence from outside actors."
As a result, while the two countries might appear to have similar economic integration with the global economy, Malaysia's ability to set its own economic course means that "it actually is not at the same level of economic globalization as Thailand," Miss Broad said.
The examination of noneconomic indicators is also not settled, according to Mr. Diaz-Bonilla. "Then you have the discussion whether those countries that are more or less integrated in the world society have better indicators in general," he said.
One thing indicators don't always illustrate is disparities within countries.
While an indicator might have improved overall, a country's entire population may not all have access to those benefits.
The 1999 U.N. Human Development Report noted that "inequality has been rising in many countries since the early 1980s."
That report cited China as an example: In coastal provinces, the human poverty index was just under 20 percent; in inland Guizhou, the figure was above 50 percent.
In India, Francis Moore Lappe, author of "Hope's Edge: The Next Diet for a Small Planet," saw food going to waste while the poor went without. "While half the children in India are starving, there are huge surpluses of grain," she says.
However, because of the withdrawal of government supports that had "kept grain within the reach of the people, you see this huge surplus while hunger has deepened."
The U.N. report also noted that disparities among countries have been rising. Economic disparities have continued; one-fifth of the world population living in the highest-income nations produced 86 percent of the world GDP, the report said, in contrast to the 1 percent of the global GDP produced by the one-fifth of the world population living in the poorest countries..
Human development and welfare indices have also shown this gap. The top fifth also had 74 percent of the world's telephone lines, compared with just 1.5 percent among the bottom fifth, according to the report.
"My view is pretty clear that most countries in the world do better in terms of economic performance when integrated in the rest of world with globalization" because of the increased flow of people, capital, goods and ideas, said Mr. Slaughter.
But "it's true for every case, every country, there are particularities that might not generalize to another case," he added. "There's no magic wand that can be waved over the world."
Nor, it appears, is there a magic ruler by which to measure globalization.



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