In order to carry the process forward, and build support for a better globalization, a common political understanding of how to maximize the benefits, while minimizing the risks, must be developed. The world needs instead a new approach to globalization that exploits its enormous potential for improving human welfare. Reversing the process of globalization would not solve the problem of poverty-that was amply demonstrated by the events of the 20 th century. It is, therefore, the greatest challenge to peace and stability in the 21 st century. Poverty is not only unacceptable on moral grounds, it also forms the breeding ground for war and terrorism. As a result, the disparities between the world's richest and poorest countries are now wider than ever, with increasing incidences of poverty within countries. A large part of the world's population-especially in sub-Saharan Africa-has been left behind by economic progress. However, other countries have not done so well. Their experience demonstrates that integration into the global economy can bring major advantages for developing countries. More rapidly globalizing countries, such as Brazil, China, Costa Rica, the Philippines, and Mexico on average doubled their share in world trade and raised per capita incomes by two thirds from 1980 to 1997. Many developing countries have already taken advantage of the opportunities of the global economy. Global per capita income has more than tripled, and most of the world has experienced a major improvement in life expectancy.
As a result, the past 50 years have been a period of growing economic and political freedom and rising prosperity. Since 1945, democracy and capitalism have been embraced by an increasing number of countries-including, since 1989, by most of the previously communist world. International economic and political integration was reversed, with severe consequences. But globalization was interrupted in the first half of the 20 th century by a wave of protectionism and aggressive nationalism, which led to depression and world war. The period through the end of the 19 th century was also characterized by unprecedented economic growth and global integration. Globalization, or internationalization, is not a new phenomenon. The IMF believes that globalization has great potential to contribute to the growth that is essential to achieve a sustained reduction of global poverty. Precisely because it is a choice, it may be challenged, and even reversed-but only at great cost to humanity. However, that is not so: globalization represents a political choice in favor of international economic integration, which for the most part has gone hand-in-hand with the consolidation of democracy.
Ib global issues free#
Globalization-the process through which an increasingly free flow of ideas, people, goods, services, and capital leads to the integration of economies and societies-is often viewed as an irreversible force, which is being imposed upon the world by some countries and institutions such as the IMF and the World Bank. At the same time, it recognizes that the IMF is part of a wider network of international institutions that each has an important role to play in making globalization work better. It describes what is being done by the Fund, within the framework of its mandate, to (1) safeguard the international financial system and (2) enable more countries to reap the benefits, while minimizing the risks, of globalization. This note offers a conceptual framework for the IMF's involvement in the global economy. The critical debate on globalization, though temporarily subdued by the events of September 11, 2001, continues to raise issues that are at the core of national and international policy agendas. Safeguarding the International Financial System The Role of the Bretton Woods Institutions Globalization: A Framework for IMF Involvement
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