Friday, 27 March 2009

Globalisation under scrutiny

Expectations of significant thoughts, let alone actions, emerging from next week's G20 summit are diminishing by the day. Attention is focusing on the more energetic activities expected outside the venue and on London's streets.

Anti-globalisation protesters have followed Global Summit meetings around the world for more than ten years. Their message has been that globalisation is bad because it enriches global corporates at the expense of impoverished third world countries.

But yesterday's message to the world from Brazilian President Luiz Inacio Lula da Silva, delivered in Gordon Brown's presence, contained a rather different view on the merits of global trade, which protesters in London may not appreciate.

President Lula blamed "white people with blue eyes" for the global financial crisis. "It cannot be, in a society where a person is filmed and is always under surveillance ... [that] the financial system is not watched and is not regulated," he said.

However, this was not a criticism of global rules that shape international markets. Lula was castigating Western nations for not seeing that regulation was strong enough to prevent the financial crisis.

As Lula will know only too well, ten years ago Brazil was a cash-strapped nation suffering one of its own many currency crises. By 2006, it had become one of the word's fastest growing economies – forming part of the BRIC group that featured in every serious investors' international portfolio.

Rather than globalisation stripping assets, as G7 to G20 protesters claim, it has been the path to helping Brazil become the tenth largest economy in the world.

As a result, Lula's message to the G20 is that protectionism must now be avoided at all costs. He sees the G20 meeting as vital for developing nations and intends to call for a $100 billion expansion of trade finance aid to help stimulate global trade.

Those who will be demonstrating on London's streets in the next few days will not be demanding better financial regulation or even smaller government deficits. They will be a mix of anarchist, anti-capitalist, anti-establishment, anti-war and anti-environmental-change direct action groups whose message to the G20 leaders will be that globalisation sucks.

Perhaps this message had some relevance ten years ago as global trading rules were being set. But today, global economic interdependence and the importance of continuing global trade is as much a fact and a necessity of life for the developing world as it is for countries where people are white with blue eyes.

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