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OPINION> Zhu Yuan
Dealing with the downside of globalization
By Zhu Yuan (China Daily)
Updated: 2009-11-05 08:08

When the world is increasingly becoming a global village, globalization is something that a nation or an individual finds hard to ignore whether one likes it or not. How to look at this inevitable process and let more people share its positive results in an even broader way and minimize its negative effects has become a global concern.

Dealing with the downside of globalization

Reading the book Winners and Losers in Globalization by Guillermo de la Dehesa may provide one with partial answers to such questions as what exactly globalization is, what its costs and benefits are and who loses and who benefits from this process.

As current chairman of the Center for Economic Policy Research, de la Dehesa, a Spaniard, undoubtedly approaches the topic from an economic perspective. And, there is nothing wrong with it since globalization is indeed a process of economic integration in a global sense.

But it is always not enough to look at the issue only from an economic perspective. The writer does remind readers in this book that the conflicts between the globally integrated finance, domestic monetary policies and the financial market will quite likely intensify the effects of failed coordination. And such effects will probably lead to financial crisis.

Yet, as far as we know, it is not the conflict between integrated finance and domestic monetary policies of particular countries that have resulted in the crisis. The rampant cheating on Wall Street and the bubbles created by the unrestrained and pointless invention and issuance of derivatives can hardly to be interpreted as just technical problems in finance.

To be exact, the effects of globalization have gone far beyond the sphere of economy.

True, some developing countries have witnessed the rapid growth of their gross domestic products from economic integration through developing their manufacturing industries. But they have paid a heavy cost - environmental degradation and over consumption of their resources. From this perspective, they can hardly be called winners as far as sustainable development is concerned.

The ever-widening polarity between the haves and have-nots in both developed and developing countries seems to point to the suspicion that globalization is actually a process for the haves to increase their wealth in an unprecedented speedy manner and where the have-nots lose their hope of becoming better off.

In a city of East China's Fujian province, the local people have made money by wholesaling worn clothes and even clothes stripped off the dead that have been smuggled from developed countries. Some developed countries have dumped industrial waste in developing countries, thus polluting the local environment. It is globalization that has made such dirty and illegal business possible.

Even in the process industries, which have created jobs for developing countries such as China, the profit margin is so thin that workers have to work overtime in very poor living and working conditions to make ends meet. At the same time, consumers in developed countries have been consuming imported goods at very low prices. That is what has happened to many developing countries when their economies have been integrated with those of their developed counterparts.

This writer argues that globalization is not the root cause for the problems many countries face. The causes for many problems that are related to globalization lie within particular governments, according to the writer, and they include inefficient governance, flawed social system and terrible economic policies.

He may be partially right. But it is dangerous to ignore the far-reaching effects of the downside of globalization, and even dangerous to look at them only from an economic perspective.

Even if the writer is right that globalization brings about more winners than losers, we cannot afford to ignore its downside. In addition, the faster development facilitated by globalization needs to be gauged in the long term for its sustainability. If globalization is inevitable, it is much more meaningful to focus on tackling the problems it brings about than to debate how good it is and will be.

The Chinese translation of de la Dehesa's book was published in August.

E-mail: zhuyuan@chinadaily.com.cn

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