Economist discusses effects of globalization

Harvard Professor Jeffery Sachs raised questions about the worldwide effect of globalization at Funger Hall Tuesday.

When we think about globalization, the point I want to stress today, is that we should really think about the globe, and not just about us, Sachs said.

Sachs’ lecture, entitled Making Globalization Work: Reflections After the Flare-up in Seattle, was sponsored by the Elliott School of International Affairs and the Japanese Automobile Manufacturers Association, Inc.

Sachs said he wanted to address the question of globalization from the perspective on how we can make it work.

He defined globalization as the increasing economic integration of a national economy with the rest of the world. He said there were four aspects to globalization – trade, finance, globalized production and harmonization with the multilateral agencies that make the rules of the game, namely the IMF, World Bank and the WTO.

Sachs said core nations are the group of the world’s richest and most developed countries. Core nations include the United States and Canada. These nations are able to reap the full benefits of globalization, Sachs said.

Globalization is surely working for America, Sachs said.

Sachs said most of the world is not experiencing the rate of prosperity that the United States is enjoying. He said people in the United States feel their economic situation is not the best that it could be.

Our complaints ain’t nothing compared to the real issues faced by the rest of the world, Sachs said.

Sachs said two billion people live in low-income countries.

This is not low income as in an American family finding it hard to make ends meet, Sachs said. This is low income in the sense of living on a dollar a day.

The average income for those 2 billion people is $350 a year.

Sachs said the more developed nations of the world need to consider problems faced by the world’s poorest countries.

He said stronger economic forces need to help the distant periphery nations experience the full benefits of globalization.

Sachs also blamed the United States for not helping promote globalization. He cited the example of the United States’ unwillingness to modify intellectual property rights so that people in developing countries could get medicines for a lower cost.

Americans are not able to handle the deeper challenges of development for the periphery, Sachs said. He cited this as one of the main reasons for the WTO protests in Seattle.

Sachs said internal politics are vastly overrated by organizations such as the IMF and the World Bank. He said stable governments are important but even they cannot prevent many of the problems that occur within their borders.

Governance is not going to stop 300 infected malaria bites, Sachs said.

Sachs said the World Bank gives only $30 million a year to be spent on research to help developing countries, but he said more money needs to be spent in these countries.

Sachs said another way in which to help developed countries experience globalization is to decrease their debts. Governments could be using money to assist their citizens; instead they are spending the money they have on debt service.

We need a world in which poorer countries can get rid of their debts, Sachs said.

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