Five years ago, the anti-globalization street protests had crazy momentum. Today the demonstrators are gone, or at least in hibernation. Back then, well-meaning folk doubted that trade was good for poor countries. Today, more people complain about the barriers erected by the rich world that stifle poor countries' exports.

In the 1990s, the terms of the debate were set by committed globophobes. Today they're more likely to be set by Bono, who campaigns for trade along with aid and debt relief.

It's risky to gloat, but this could be a lasting victory. Anti-globalization arguments were for the most part so flimsy that they've been thoroughly demolished. A World Bank study showed that "globalizing" poor countries, those whose trade grew as a share of gross domestic product, recorded gains in income of 5% per year in the 1990s, 2.5 times faster than the advance in rich countries. Non-globalizing poor countries had no
income gains whatsoever. Convincing evidence.

So much for the left-wing critics. But globalization has also survived the shock of Sept. 11. In the aftermath of the terrorist attacks, there were dire predictions. Terrorists had used the very openness and connectedness of our societies to mount their attack. The response to terrorism would require new airport checks, new customs checks, new visa checks. "The era of globalization is over," wrote John Gray, a British commentator.

It hasn't happened. Even as counterterrorist security concerns threw some sand into the gears, globalization has resumed its forward march. We've even discovered a whole new frontier -- the globalization of services such as tax accounting and medical diagnostics.

So globalization looks healthy. But although globalization brings prosperity, albeit with winners and losers, it brings challenges at the same time; we face globalized terrorist gangs, drug cartels and money-laundering networks, not to mention global diffusion of contagious diseases and transnational environmental problems. We don't have adequate institutions to deal with all this stuff: Economic globalization isn't matched by the necessary political globalization. What's more, we know this to be true -- but our efforts to respond are mostly half-hearted.

Anti-globalization arguments were for the most part so flimsy that they've been thoroughly demolished.

To wrestle with transnational threats, we need to do something about the failed states where such threats tend to fester. Because we know this to be true, official development assistance has jumped since Sept. 11. But the jump is not enough. Measured as a share of our economies, the recent aid increase only partially makes up for the big fall in the 1990s.

Equally, we know that weak states will have a better shot at getting strong if they can export into rich markets. It's an outrage that the least-free areas of world trade are agriculture and textiles, precisely the goods in which poor countries have an advantage. Because we know this to be true, we have the Doha Round of trade talks, which is supposed to be about development. But the negotiators missed last year's deadline for completing their work. Nobody's betting on a quick breakthrough.

And we need stronger global institutions. But we're better at complaining about global institutions -- the United Nations, the World Bank -- than we are at sustaining them.

In the late 19th century, the world experienced globalization. New technologies -- the telegraph, the steam ship, the telephone, electricity, the train -- combined with the free-trade outlook of the British empire to produce a dramatic expansion in international commerce. But that globalization was brought to an end by the unmanaged political tensions that ushered in world war. New tensions lurk now, and we need to get serious about dealing with them.






Contributed by Sebastian Mallaby. Reprinted with permission from TruthAboutTrade.

To read another Global Envision article with a different point of view, see Bush's Globalization.