Human Rights Dialogue 1. One is to ensure that the benefits of globalization extend to all countries. That will certainly not happen automatically. The second is to deal with the fear that globalization leads to instability, which is particularly marked in the developing world.
It is a pleasure to be here with you for this fifth annual meeting of the World Economic Development Congress. I would like to talk to you today about the challenges of the increasing integration of the world economy. The evidence for globalization is striking: What is the role of governments in shaping the new global economy?
One role is to get out of the way -- to remove barriers to the free flow of goods, services, and capital. But, just as free markets at home require an appropriate legal and institutional framework to function properly, so a more integrated world economy also demands effective international institutions and "rules of the game.
Moreover, the domestic economic choices that governments make will have a major impact on international patterns of trade and investment, as well as on the prosperity of individual countries.
Globalization presents governments with three principal challenges: Economic Architecture Let me turn first to the the new global architecture. By that, I mean the institutions and structures of the international economic system.
Despite occasional setbacks, this architecture served the needs of its era well, and promoted global prosperity and security.
But the demands of the current era of globalization on international institutions are likely to be much greater. The lines between domestic and international financial markets have increasingly blurred, requiring closer international cooperation in monitoring financial institutions. Trade negotiations are as concerned with ensuring that domestic policies of individual countries promote open market competition as they are with traditional trade barriers, such as tariffs.
Thus, the relationship between regional economic arrangements and the overall global system will have to be even more carefully coordinated. The international financial institutions created at the Bretton Woods Conference -- the World Bank and the IMF -- show how the objectives of key parts of the international architecture can evolve over time.
While the Bank and the Fund were originally established to finance European reconstruction and to manage the fixed exchange rate system, they have assumed a series of new roles as the global economy has evolved: The international financial institutions will remain an important element of our economic architecture in coming decades.
They will need to continue providing guidance and assistance to developing and transition countries seeking to reform their economies and to follow a market-led strategy of development.
They will also become increasingly involved in assisting environmentally sustainable development, alleviating poverty, promoting good governance, and encouraging private capital flows. The recent Mexican peso crisis underscored the extent to which financial turbulence in a major emerging market country could threaten global financial stability.
Subsequent events have demonstrated the appropriateness of the international response to the Mexican crisis. However, the experience has revealed weaknesses in existing international arrangements. A new facility will double the financial resources available to the IMF through the General Arrangements to Borrow, and will strengthen the ability of the IMF to manage similar crises in the future.
The IMF has also improved its ability to identify potential crises in advance and take preventive steps through stronger surveillance of economic policies. The successful conclusion of the Uruguay Round resulted in a much needed strengthening of our multilateral trade regime.
The Uruguay Round Agreement cut tariffs on manufactured products by over one-third -- the largest reduction in history.Globalization poses four major challenges that will have to be addressed by governments, civil society, and other policy actors. One is to ensure that the benefits of globalization extend to all countries.
"The Challenges of Globalization" Remarks by Joan E. Spero, Under Secretary of State for Economic, Business and Agricultural Affairs, at the World Economic Development Congress, Washington, DC, September 26, What are the Challenges of Globalization?
Job Mobility One of the most common critiques of the global trade system is how it ships jobs, especially manufacturing jobs, from less developed countries to developing countries.
Third, the answer to those challenges is not greater protectionism. Instead, we need to provide greater support to displaced workers so they can obtain the skills needed to find new well-paying jobs. We need to do better in preparing workers to deal with the challenges of globalization and technological change.
"The Challenges of Globalization" Remarks by Joan E. Spero, Under Secretary of State for Economic, Business and Agricultural Affairs, at the World Economic Development Congress, Washington, DC, September 26, GLOBALISATION CHALLENGES AND ITS ADVANTAGES Globalization Globalization has come to be a principal characteristic feature of the new millennium and it .