Wednesday, April 05, 2006

In defence of globalisation

Bill Emmott, the departing editor of the Economist after 13 years at the helm, ends with a vigorous defence of globalisation.

Since 1993, the globalisation (the liberalisation of domestic and international markets for goods, services, technology and capital) has produced spectacular results in generating wealth and dragging people out of poverty.

In 1993, world GDP growth was 1.2% and inflation almost 35%. Today, the world is racing along at an annual 3% growth rate and inflation has come crashing down to 3.7%. This has pulled hundreds of millions out of extreme poverty. The World Bank reports that the percentage of people living on less than $1 a day has fallen from 22% in 1993 to 17.8% in 2001 and they predict the rate to fall to 9% by 2015 at current trends.

This is over seven hundred million people.

All well and good say the anti-globalisation doomsayers, but by outsourcing everything to India and China, look at the damage done to first-world jobs.

Wrong again, guys.

The actual facts show a totally different story. Unemployment in OECD countries (the so-called "rich" nations) has fallen from 7.8% of the workforce in 1993 to 6.3% today.

Emmott ends with a warning that protectionism is the natural state as politicians seek to curry favour with voters. Despite its stunning success, globalisation is constantly attacked from all sides. The battle is going well, but is not won.