Technological advance, large scale migration and progressively liberalised markets mean that we now live in a world ever more closely connected.
The rapid convergence of technology and other events have allowed many developing nations, and in particular China and
India, to become part of the global supply chain for services and manufacturing. This has created an explosion of wealth in the middle classes of the world?s two largest nations whose people now have a huge stake in globalisation.
Our nation has become increasingly internationalist in its outlook. Witness the greater compassion for those seeking a living in the developing world. Understand too the increased awareness attached to the importance of enhancing the global environment.
I believe that one of the greatest challenges of our time is to absorb the changes in technology and the revolutionary expansion of the global marketplace without simultaneously overwhelming and leaving much of humankind behind. This will require leadership, flexibility, imagination and innovation.
Today many wrongly assert that globalisation has worsened inequality and poverty. It is true that the ratio of average incomes in the richest communities to those in the poorest has continued to rise alongside the absolute gap in living standards. However, in proportionate and absolute terms the numbers in extreme poverty have fallen as a result of rapid economic growth in
Asia. But look at all the indicators of quality of life. The welfare of humanity as indicated by life expectancy, literacy and incidence of child labour continues to improve markedly. Only in sub-Saharan
Africa is there any contrary evidence and in many of these countries it is corrupt governments and the insidious influence of aid as a barrier to economic growth that is chiefly to blame. Contrary to so-called progressive sentiment here in the
UK, the real problem of the world?s poorest is that their skills and labour are almost entirely unexploited as they live outside the world economy.
Where the detractors of globalisation have a point is in the attitude of the richest countries in their treatment of developing nations. Wealthier nations call for widescale liberalisation and response to market forces, but fail to adopt the advice at home. The hypocrisy of richer nations applies particularly to the protectionism applied to commodities, especially those in the agricultural sector.
Average tariffs in high-income countries are about 3% but those on agricultural commodities are roughly double that on manufactured products. In
Europe the Common Agricultural Policy (CAP) acts as a regressive tax and a market distortion throughout the continent with its most serious implications coming in the context of trade policy with the developing world.
Not to be outdone the same principles apply to the highly subsidised
US commodities sector. The US spent $10.7million per day in 2000 on cotton subsidies thereby depriving some of the most impoverished African nations for whom cotton is its staple crop of a foothold in that colossal market.
The critics of globalisation are justified in highlighting the utter hypocrisy of the developed world at the dreadful state of commodity markets. But these charges only make sense if one supports the notion of free trade.
Today there is increasing evidence of a renewed appetite for protectionism. This especially applies here in
Europe as nations grapple with the social and economic effects of large scale job relocation away from both long-established manufacturing and some lower skilled service industries.
What is needed is for us to look to the future with hope, aspiration and vision. We need to envisage what nations and corporations can achieve together working and trading across the world. We need to embrace the opportunities of globalisation not be fearful of its challenges and we need to harness the power of new technologies, not retreat with protectionist comfort.