World consumption has doubled since 1975. In the pursuit of wealth, we have created a world of instant communication and unrestricted global markets. Each day over $1 trillion is traded in a global foreign exchange that never closes. It’s business without borders; money moves with lightning speed.
Not since the Industrial Revolution has the workplace been so dramatically restructured. Globalization has been a triumph for the corporate giants and for e-commerce.
But the explosion of international trade has also meant jeopardising jobs, forcing out local industries and an ever greater impact on the natural world. Adding up the cost and the value of globalization, we find out who has lost and who has won in its wake.
Seattle. Host to the 1999 meeting of the World Trade Organisation: 135 governments have come to set the agenda for the next round of trade negotiations. But the city has been besieged by 40,000 labour, environmental and human rights activists protesting about the WTO. Founded in 1995 to sort out trade disputes, they claim it puts too much emphasis on ‘free’ rather than ‘fair’ trade. Their banners decry everything from the greed of multinationals to genetically modified food. The scale of these protests took the world by surprise and was proof for many that it’s time to re-examine the global economic machine.
The beginnings of that machine date back to the second world war, with the birth of the International Monetary Fund and the World Bank. Formed to oversee post-war reconstruction, and foster financial stability, these bodies controlled international capital flows. Both still exist today, but have had to vastly expand their job description, demanding economic reform as a condition of their loans.
It was the IMF which stepped in to bail out Asia when the ‘Tiger’ economies went into meltdown in 1998, after foreign investors withdrew their monies overnight. It showed how volatile today’s money markets are, and what happens when they panic.
In the US and some other countries there are now several stock exchanges. In the old days they all used to look like this, the New York Stock Exchange. For more than two centuries, America’s mightiest companies - GM, Coke, Boeing – have listed here on the Big Board. Its stock value today is $12 trillion, but face to face trading has largely been replaced by electronic dealing.
Dr. Ed Yardeni, Chief Economist Deutschebank: If you don’t get on this technology boom, if you don’t compete, if you just kind of look around and resent that you’re falling behind, you’re going to be left in the dust, you’re going to miss the whole thing.
In a Park Avenue skyscraper, 150 ‘day traders’ rent the latest digital technology to by-pass stock brokers, and trade directly on the markets.
Day Trader: I bought a thousand shares at 11.09 at 27 and an eighth..
They feed off the volatility of high-technology stocks, traded on newer, nimbler exchanges like the NASDAQ. Speed is everything. Traders hold onto their stocks for an average of four and a half minutes.
Day Trader: … so I’ve made money on the trade.
And there are more and more companies every day. 30 years ago there were just 7,000 companies operating internationally; today there are more than 50,000.The post-war years have seen multi-nationals outstrip the power of some governments: the sales of 10 of the world’s largest companies exceed the Gross National Product of the world’s 100 smallest countries. But foreign investors have raised living standards by investing in developing economies. Globalization is reckoned to have brought 3 billion people out of poverty since world war two.
The Miss India beauty pageant – the gala event in one of the poorest countries in the world. Yet this is a country which is forging ahead in one of today’s booming industries: information technology.
Alongside the sports stars and screen idols who judge the contest, stands a young computer entrepreneur.
NATSOT Announcer: Named as one of the elite one hundred who has had the greatest impact on the computer industry of the world, ladies and gentlemen it is my privilege to present to you Sabeer Bhatia.
At 27 Sabeer Bhatia had an idea now used by internet surfers everywhere and sold it to Microsoft for $400 million.
Sabeer Bhatia: To be honest with you for the first couple of months I was pinching myself every day. I didn’t think it was for real.
Hotmail is his invention: the simple idea of e-mail on the world wide web. The internet is now the mouthpiece of a truly global village and the number of surfers is growing phenomenally. There are already 100 million non-English users, and that group is growing fastest. Unsurprisingly then, the internet has produced thousands of cyber millionaires.
But whilst India is the world’s second largest emerging market, for these people the internet and all the promise of the cyber age is world’s away. Luxury here is access to a washing machine, not a web site. Barely half of India’s billion people are literate, let alone computer literate. For most, survival is a daily struggle.
So it’s a paradox that a quarter of the world’s software engineers are Indian, many based here in the city of Bangalore.
Narayan Murthy is Bangalore’s Mr Big, founder of the computer giant Infosys. Every day he travels to work through one India – the squalid, struggling reality outside his high-tech compound and arrives at work in another.
Narayan Murthy, Infosys: As people come through in their buses and cars and whatever it is to Infosys they see on the road tremendous poverty, poor infrastructure, pollution, all that. And when they come here the get transformed into a mindset that is completely western in terms of quality, timeliness, in terms of satisfying the customer. And they go back in the evening and they journey through this Indian reality once again and that’s not easy.
Operating a world class computer corporation in a country without modern phone lines or reliable electricity is not easy either. Even in Bangalore the erratic power supply plunges the city into darkness at least once a day.
Narayan Murthy, Infosys: Just to give you an idea, if the power goes off for a fraction of a second in this centre it takes us about 8-10 hours to recover all the data bases and all the programmes on computers.
His answer is to build an entirely self-sufficient complex – a cyber city with its own electricity supply. Infosys is the living proof that once you’re on-line, you’re plugged into the global economy. And that’s why it’s gone from a $240 start-up company 17 years ago to a $1.5 billion software exporter today.
Narayan Murthy, Infosys: My desire has always been to create wealth legally and ethically in India.
But whilst the internet has generated a huge amount of wealth, it has also meant the rebirth of ‘civil society’, as it has been the global message board for activists. In 1970 there were just 3,000 Non Governmental Organisations; today there are more than 25,000. Their strength is due largely to information technologies like the internet, which have spread universal standards of human rights.
These groups have also publicised the way governments and big corporations do business.
One of the industries under fiercest attack in the Seattle protests is the $50 billion-a-year genetically modified food business. Mass consumer revolt has even led to talk of meltdown of the entire industry.
The science has potentially enormous benefits, like disease-free crops. But critics fear that GM companies are guilty, like other multi-nationals, of caring more for mass marketing than genuine public interest.
Secret GM trials have fuelled public unease and activists have played up the image of Frankenstein foods.
The GM debate is a truly global one, with most countries affected. The industry claims that these foods will feed the starving in the new Millennium but the public fears that profits are being put above food safety, and that our right to consumer choice will cease to be if GM foods are forced down our throats.
At the heart of the issue is whether GM food should be tested more thoroughly than current standards require.
Brian Arnst, Monsanto: Foods generally don’t have to be tested. There are very few foods on the shelf that would have been tested, whereas the food products such as the grain from beans, from soya beans, has been widely tested and there is a wealth of data on that. This data was submitted in the US, it’s been accepted there, it’s been submitted in numerous other countries.
Dr Judy Carman Flinders University: The studies that were done by Monsanto I regard as being really quite inadequate. There were only very short term feeding studies of about four weeks to very small numbers of experimental animals.
International law was not ready for genetically modified food, treating it as no different from normal food. But some scientists now demand the same tests as pharmaceuticals, with independent scientific review and lengthy human trials. The GM industry disagrees.
Brian Arnst, Monsanto: Well, human testing is not done for food products and in discussions I’ve heard other people suggest that it would be extremely complicated, extremely time consuming.
Dr Judy Carman Flinders University: If there is a problem, it might take ten years to show up. And then of course you’ve got to be able to find them, find those cases, and unless you’re actually going out looking for those diseases, you might miss them completely.
Down on the farm many feel that the GM industry has ridden roughshod over them too. Farmers realise that by dismissing public concerns over adequate testing, governments, scientists and the corporations have failed to win over the most important people of all. And in the age of the global economy what big business fears most is consumer revolt.
Warwick Anderson, farmer: You sell to a market, you don’t manufacture a product and then tell the consumer that’s what I want you to have. I think we’ve got to be more mindful of what the consumers want, and we’ve got to be more mindful of what the community as a whole wants.
In February 1999 Greenpeace delivered four tonnes of genetically modified soya bean to the home of British Prime Minister Tony Blair, saying he’s one of the few people who claims he wants to eat it. Whilst corporations have even applied for patents on staple foods like vegetables, tea, soya, coffee and cotton, many feel we’re simply being strong-armed by big business.
Food seems to have awoken public concern over the pace and scale of globalization like no other issue. Perhaps because food production is putting growing pressure on the world’s resources.
The Seattle protests also highlighted over-fishing. It has threatened stocks and led to calls for drastic cuts in quotas, from the Irish sea to the shores of Africa.
Off the coast of Senegal foreign vessels, particularly Spanish trawlers are drag-netting the waters. Senegal was paid $13 million for the rights to fish in her waters for four years.
As many as 1,000 trawlers from the EU regularly fish off the coast of Africa.
But the UN Food and Agricultural organisation estimates that 70% of the world’s fish stocks are in need of urgent management. With dwindling catches Senegalese fishermen are making money out of turtles.
Senegal’s export of fish is threatening the country’s subsistence economy. Fishermen claim there have been accidents between some of the traditional fishing canoes and European boats.
Mactar Gaye, fisherman: My canoe sank after a collision with a Greek boat. It happened at 3 o’clock in the morning. We didn’t have a light. I lost everything. I brought a court action against them, but it came to nothing.
Such tales of dirty tricks on the high seas are surfacing in many parts of the world where fish sustainability is under threat.
Fishing agreements can protect stocks from the rampant free market, but only if they are adhered to.
Australia’s ocean territory is one of the world’s biggest and hard to police. And foreign boats are illegally targeting Australian fish stocks.
In 1999, three trawlers came to fish in a fragile breeding ground. The fish here are known as straddling stocks, as they cut across Australia’s territorial borders.
The trawlers turned out to be South African, although they were fishing incognito. The local fishermen wanted to confront them but the government told them there was nothing they could do. Again, international law lags behind the reality of the free market.
Joe Pirello, Fisherman: We could have got in front of them, we could have cut their nets off, we could have done whatever was necessary to protect our resource. It’s an Australian resource. It needs protecting.
For now the only thing protecting this resource is international goodwill.
The only way to regulate the global economy then, is by global rules. But what if the organisations making those rules like the World Trade Organisation and the International Monetary Fund are influenced by already powerful nations?
Some say America now uses the IMF as another tool for global economic domination. As the largest shareholder the US can veto any amendment.
Stanley Fischer, International Monetary Fund: We always have to take into account what our shareholders want. We work for the 182 governments that own us. If the US was passionately opposed to something we probably couldn’t do it. If they merely oppose something without taking a strong stand we can do it.
But does it matter that the US has so much say over organisations like the IMF?
Jeffrey SachsHarvard University: There’s a certain kind of logic. They put in the money, but it’s also a serious weakness. What kind of world are we really going to live in? Are these institutions really going to reflect, in a serious way, the best collective aspirations of humanity. And including the 84% of the humanity which lives in the developing countries.
In August 1999 the US government complained to the World Trade Organisation that the EU was buying too many bananas from the Caribbean Windward Islands, rather than from US banana multinationals like Chiquita - a company which happens to be a big sponsor of American political parties. The US threatened a steep $200 million worth of tariffs on EU goods.
The WTO has since been slammed for ruling in America’s favour, and jeopardising the living of 200,000 banana farmers in some of the world’s poorest countries, like Nioka Abbott.
Nioka Abbott: It will mean doom. Because in St Vincent, especially in the Windward Islands, we have no other alternative.
There is only one alternative argues St Vincent Prime Minister Sir James Mitchell.
Sir James Mitchell, St Vincent Prime Minister: The solution to this problem is that first of all the Americans leave our bananas alone!
Ten years ago the Caribbean exported twice as many bananas to Europe, struggling to meet EU standards.
Pearlina Pereira, Inspector Banana Growers’ Association: If it gets less than 80% quality rating we reject the whole consignment.
Q: What would happen to the farmer then?
A: He doesn’t get paid.
The EU had preferred to buy bananas from its former colonies in the Caribbean and Africa. But globalization is driving nations to combine in new, ever larger, groupings. Over recent years there has been a boom in agreements designed to further free trade within these groupings, by doing away with tariffs and restrictions.
One such agreement was the NAFTA, or North Atlantic Free Trade Agreement. When Mexico, Canada and America signed it in 1994, they promised prosperity for all.
Bill Clinton: To provide an impetus to freedom and democracy in Latin America, and create new jobs for America as well. It’s a good deal, and we ought to take it.
In fact NAFTA meant that US manufacturers could decamp to Mexico, where wages are dirt cheap.
Since then, over 100 American companies have come to the Mexican border town of Juarez. But they pay their workers just 53 cents an hour, less than $30 a week. Unions here are virtually banned and safety is lax.
The vast majority continue to live in grinding poverty. The owner of this cardboard house works for a foreign company. Globalization has given people jobs and skills, but they want more.
Judith GalarzaHuman Rights Activist: The salaries are an offense to humanity. Because if you consider how much they produce, they are bringing in a lot of wealth. This salary is predetermined by the Mexican government, but it is a salary that doesn’t allow us to survive.
The suburb of Anapra, just a few hundred yards from the Mexican-American border, is the home for thousands of factory workers.
Joan Irene lives here with her husband and three children in this tiny house. There is no sewerage, no running water, and her one luxury is electricity, stolen from the power lines above her home.
Does she question the low wages?
Joan Irene: Joan [through translator]: Yeah, of course. Many people ask themselves the same thing. The salaries are just very low here in Juarez, and I know a lot of people who have just decided to give up and to go to El Paso or try to make their way into the United States because of that.
So the free market here has not meant equal opportunity for all. Not surprisingly then, NAFTA has brought no decrease in the number of illegal border crossings. (PAUSE) One man goes over the wall. Below, another crouches, waiting. Despite NAFTA, these people still choose the American dream over the Mexican reality.
Another pitfall of globalization is that production can shift to those countries where environmental standards impose the least constraints. Most would agree that third world countries have paid the highest price for the globalised economy. Traditional livelihoods have been threatened as more land has been appropriated by big business.
Nigeria is the world’s sixth largest oil producer. Shell Oil pumps most of it in a joint venture with the government. But government corruption has seen to it that almost 50 years of oil production have failed to benefit the majority of Nigerians.
Ledum Mitee, Environmental Activist: Land is not just some property, some factor of production to be exploited and wasted. To us land is more than that. It has some spiritual significance. It’s where our gods are supposed to reside.
The villages of the Niger Delta rely on fishing and agriculture for food. But the once pristine jungle is now littered with oil spills. A spill destroys crops and can travel far in the rainy season. This spill has been here for six months without a clean-up by Shell.
Chief Promise Osuma, Otuagwe Town: I went to Shell and reported it. Since then this oil just spread all over. That time it was during the flood period, so the water covered the whole area. From this area the water carried the oil very close to our community. Many crops were destroyed. We had nothing to feed on.
IOronto Douglas, Environmental Activist: I lived in England. I schooled there. And I’ve been to Holland and I’ve seen the way Shell operates there. The way they operate in Nigeria is environmental racism.
The Nun River pumping station is closed. Shell recently lost a third of Nigerian production, as angry communities chased away staff and seized vehicles. Shell says it understands the importance of such protest, and like other oil companies, now claims to be cleaning up its environmental record.
Bobo Brown, Shell Oil: The increase in tension in the Niger Delta is serious, I would characterise it as serious. That would be one way to look at it. Serious in terms of its implications, serious in terms of the way we as a company regard it.
Both Mexico and Nigeria highlight the growing need for business to keep to Western norms, even when operating in countries where the social or environmental standards may be weak.
Many of the dilemmas of globalization are posed by China: the world’s fastest growing economy. A mass of contradictions, China has both celebrated 50 years of Communism, and welcomed Capitalism with open arms.
The embrace of the free market in China can be seen in the firm footing one company has found here. Amway, short for 'the American Way', is the world’s biggest multi-level marketing organisation. It sells American cosmetics door-to-door.
Amway’s Chinese success is due to twenty years of economic reform. Ever since Deng Xiaoping praised self-enrichment, the race has been on for overnight capitalist-style wealth. Amway products cost three times their Chinese equivalents, so determined salesmen use any tactics.
salesman: Here we used the Amway toothpaste – the colour is still the same, because the bag is well printed and the colour is hard to remove. But you can see this part has turned a little white. You can see lots of residue where we used the other toothpaste. Look, every day our teeth suffer from this.
In 1997 Amway’s sales in China netted $178 million. Recruits buy into the promise of a lifestyle far removed from Chinese tradition.
Animator: All of you follow us! All of you do it! The people in the first row… second row… upstairs… everybody do it!
At mass gatherings akin to spiritual revivals, Amway distributors meet to share sales secrets. When China banned pyramid selling schemes for a brief period in mid-1998, nervous of this growing spiritualism, 10 were killed in the riots that followed.
Su Lin bought the dream, and is also now a full time distributor. As a brick in the Amway pyramid, she earns thirty times what she used to in the Red Army.
Su Lin, Amway: We shouldn’t assume life overseas is definitely better. We can pursue a better life here in China. It depends on how hard you work. The reason I work so hard for Amway is to have a better life by making a greater effort.
Her goal is to take her parents travelling overseas. Economic reform has meant that living standards in China double every 10 years, so her dream could well become a reality.
Globalization has also put China, like other Asian countries such as Burma and Indonesia, under growing pressure to adopt political reform. When the Communist party took power in 1949, it promised to look after the workers with a cradle-to-grave support system dubbed the iron rice bowl.
The move to the market economy has shattered that support system, rural China is mired in poverty and mass lay-offs in state industries are reaping social havoc. Yet those who call for labour rights or free unions still risk hefty jail terms. Many argue the Asian 'Tiger' economies have been successful not thanks to free trade, but to totalitarian regimes which ignore workers' rights.
This man has already spent nearly two years in a Chinese jail. His crime was to establish a free trade union. Han Dongfang now broadcasts the illegal Radio Free Asia from Hong Kong. His programmes criticise the Chinese authorities’ heavy-handed approach to economic problems.
Han Dongfang: In the Sichuan Iron and Steel Factory, there are 30,000 workers who haven’t received salaries for ten months, and this has aroused strong dissatisfaction. We strongly condemn the illegality of the Zigong authorities who violently cracked down on the peaceful demonstration by workers.
Dissatisfied workers on the mainland tune in regularly to his show. Mr Xiao is a machine worker from Zigong. He fled the city after the demonstration, having been questioned by police. A labour rights activist, he knows how unions are organised overseas.
Anon. Mr Xiao: A lot of city workers can’t find a place or organisation to protect themselves - so some violent situations arise. We read about these in the press. If there were free trade unions which let the workers speak out, I think these violent cases might be reduced or disappear altogether.
Dissident Xu Wen Li spent 12 years in jail for promoting democracy. He believes labour unrest in China could portend huge social change.
Xu Wen Li, Dissident: The Chinese Communist party used workers and peasants to overthrow the KMT Nationalists in the past. This is the revolutionary method used before, so the government is really worried that dissidents will inform people of their rights and use the same method to overthrow the regime or seize power. They’re really worried about this.
Anon. Mr Xiao: If this situation continues more large-scale upheavals may appear in China. If our leaders and policy-makers don’t confront reality and solve the problem, the government will probably be toppled in the future – and that could be a disaster for the whole of China.
Whether or not labour rights will bring massive upheaval, few doubt that China will be one of the economic giants of the 21st century. It has signed a historic deal with the US paving the way for it to join the World Trade Organisation. The deal will mean more Chinese goods in the west, as well as easier access to 1.2 billion Chinese consumers. But it will also put pressure on China to make human rights improvements, if it wants to be a long-term player in the global economy.
As that economy knits ever more tightly together, our economic behaviour affects other countries more than we know. South Africa’s economy is built on gold, discovered here more than a century ago. But as gold prices plummet to a 20 year low, a quarter of a million miners are affected.
James Motlatsi, National Union of Mineworkers: We are talking about quite a number of communities which will be destroyed, quite a number of people who will be devastated by the gold price, by the decisions of the international reserve banks.
Gold used to be the best way for Central Banks to store reserves of national wealth. But now the boom in what is known as FIRE activities – or finance, insurance, and real estate — means that currencies and stocks - rather than gold -are the most profitable way for banks to hold financial reserves. So they’re selling gold.
3km below ground at the East Rand mine, the gates open on another world.
This is a place of tight spaces and stifling heat – a world of half-lit figures and constant noise.The wages for this dangerous, dirty work are shockingly low, roughly $180 a month. But the jobs South Africa’s mines provide feed families across Southern Africa.
To save these jobs South Africa’s powerful black unions are again on the march. In May 1999 Britain became the number one bogeyman when its government announced it was selling off half its entire gold reserves. The IMF also announced sales of its gold. Gold prices plummeted. It was feared that global panic would set in and other banks would follow.
Godsell with British official: We hope that your government can think seriously about its actions and will in fact review its current program of sales, in the interests of our country and in fact of gold producers, particularly the developing countries who produce gold.
Bobby Godsell, Anglogold: We’re not saying to central banks don’t sell, that’s stupid. I mean, we produce a product, we want people to buy it, and if we want them to buy it, they must be able to sell it. We are saying, hey, you can’t reverse 150 years of history in a few panicky weeks.
James Motlatsi: I was in Britain, when the Prime Minister was asked, he said in his reply, it’s better for Britain to sell now than to sell tomorrow because anyway the gold price will go down and down and down – that’s what he said - regardless of what the consequences of what will be caused by his decision to the developing countries.
For the workers of the East Rand mine, the consequences are devastating. With the gold price so rapidly depressed, the unions have been powerless to stop the mine from being forced into liquidation. As of this moment 5,000 men are out of a job. They will get no severance.
Elliot Maneli, miner: I’m going home, to stay at home, because I’ve got no job, going to stay at home.
So one nation’s prudent economic move is another’s downfall. By September 1999 gold stabilised as European banks announced a cap on sales. But for South Africa, with 40% unemployment, it was too late to stop job losses. These are the tough choices of globalization.
Whilst business may put profit before the needs of the poorest, governments have shown a powerful conscience. One in four of the world’s population today lives in poverty. But in 1999 the most powerful nations agreed $100 billion in debt relief from the year 2,000.
This will help to combat third world poverty, but the challenge of globalization is to bring its benefits of health, wealth and democracy to all. There’s still a long way to go.
And that’s why tens of thousands of ordinary people came out onto the streets of Seattle, in the face of heavily armed riot police, to demand fairer rules for trade. The police had expected a clique of violent anarchists. But when they fired tear gas and rubber bullets on protesters, many said they had gone too far. A state of emergency was declared. But every visiting government would have heard the cries for more social justice in global trade.
Not since the Industrial Revolution has the workplace been so dramatically restructured. Globalization has been a triumph for the corporate giants and for e-commerce.
But the explosion of international trade has also meant jeopardising jobs, forcing out local industries and an ever greater impact on the natural world. Adding up the cost and the value of globalization, we find out who has lost and who has won in its wake.
Seattle. Host to the 1999 meeting of the World Trade Organisation: 135 governments have come to set the agenda for the next round of trade negotiations. But the city has been besieged by 40,000 labour, environmental and human rights activists protesting about the WTO. Founded in 1995 to sort out trade disputes, they claim it puts too much emphasis on ‘free’ rather than ‘fair’ trade. Their banners decry everything from the greed of multinationals to genetically modified food. The scale of these protests took the world by surprise and was proof for many that it’s time to re-examine the global economic machine.
The beginnings of that machine date back to the second world war, with the birth of the International Monetary Fund and the World Bank. Formed to oversee post-war reconstruction, and foster financial stability, these bodies controlled international capital flows. Both still exist today, but have had to vastly expand their job description, demanding economic reform as a condition of their loans.
It was the IMF which stepped in to bail out Asia when the ‘Tiger’ economies went into meltdown in 1998, after foreign investors withdrew their monies overnight. It showed how volatile today’s money markets are, and what happens when they panic.
In the US and some other countries there are now several stock exchanges. In the old days they all used to look like this, the New York Stock Exchange. For more than two centuries, America’s mightiest companies - GM, Coke, Boeing – have listed here on the Big Board. Its stock value today is $12 trillion, but face to face trading has largely been replaced by electronic dealing.
Dr. Ed Yardeni, Chief Economist Deutschebank: If you don’t get on this technology boom, if you don’t compete, if you just kind of look around and resent that you’re falling behind, you’re going to be left in the dust, you’re going to miss the whole thing.
In a Park Avenue skyscraper, 150 ‘day traders’ rent the latest digital technology to by-pass stock brokers, and trade directly on the markets.
Day Trader: I bought a thousand shares at 11.09 at 27 and an eighth..
They feed off the volatility of high-technology stocks, traded on newer, nimbler exchanges like the NASDAQ. Speed is everything. Traders hold onto their stocks for an average of four and a half minutes.
Day Trader: … so I’ve made money on the trade.
And there are more and more companies every day. 30 years ago there were just 7,000 companies operating internationally; today there are more than 50,000.The post-war years have seen multi-nationals outstrip the power of some governments: the sales of 10 of the world’s largest companies exceed the Gross National Product of the world’s 100 smallest countries. But foreign investors have raised living standards by investing in developing economies. Globalization is reckoned to have brought 3 billion people out of poverty since world war two.
The Miss India beauty pageant – the gala event in one of the poorest countries in the world. Yet this is a country which is forging ahead in one of today’s booming industries: information technology.
Alongside the sports stars and screen idols who judge the contest, stands a young computer entrepreneur.
NATSOT Announcer: Named as one of the elite one hundred who has had the greatest impact on the computer industry of the world, ladies and gentlemen it is my privilege to present to you Sabeer Bhatia.
At 27 Sabeer Bhatia had an idea now used by internet surfers everywhere and sold it to Microsoft for $400 million.
Sabeer Bhatia: To be honest with you for the first couple of months I was pinching myself every day. I didn’t think it was for real.
Hotmail is his invention: the simple idea of e-mail on the world wide web. The internet is now the mouthpiece of a truly global village and the number of surfers is growing phenomenally. There are already 100 million non-English users, and that group is growing fastest. Unsurprisingly then, the internet has produced thousands of cyber millionaires.
But whilst India is the world’s second largest emerging market, for these people the internet and all the promise of the cyber age is world’s away. Luxury here is access to a washing machine, not a web site. Barely half of India’s billion people are literate, let alone computer literate. For most, survival is a daily struggle.
So it’s a paradox that a quarter of the world’s software engineers are Indian, many based here in the city of Bangalore.
Narayan Murthy is Bangalore’s Mr Big, founder of the computer giant Infosys. Every day he travels to work through one India – the squalid, struggling reality outside his high-tech compound and arrives at work in another.
Narayan Murthy, Infosys: As people come through in their buses and cars and whatever it is to Infosys they see on the road tremendous poverty, poor infrastructure, pollution, all that. And when they come here the get transformed into a mindset that is completely western in terms of quality, timeliness, in terms of satisfying the customer. And they go back in the evening and they journey through this Indian reality once again and that’s not easy.
Operating a world class computer corporation in a country without modern phone lines or reliable electricity is not easy either. Even in Bangalore the erratic power supply plunges the city into darkness at least once a day.
Narayan Murthy, Infosys: Just to give you an idea, if the power goes off for a fraction of a second in this centre it takes us about 8-10 hours to recover all the data bases and all the programmes on computers.
His answer is to build an entirely self-sufficient complex – a cyber city with its own electricity supply. Infosys is the living proof that once you’re on-line, you’re plugged into the global economy. And that’s why it’s gone from a $240 start-up company 17 years ago to a $1.5 billion software exporter today.
Narayan Murthy, Infosys: My desire has always been to create wealth legally and ethically in India.
But whilst the internet has generated a huge amount of wealth, it has also meant the rebirth of ‘civil society’, as it has been the global message board for activists. In 1970 there were just 3,000 Non Governmental Organisations; today there are more than 25,000. Their strength is due largely to information technologies like the internet, which have spread universal standards of human rights.
These groups have also publicised the way governments and big corporations do business.
One of the industries under fiercest attack in the Seattle protests is the $50 billion-a-year genetically modified food business. Mass consumer revolt has even led to talk of meltdown of the entire industry.
The science has potentially enormous benefits, like disease-free crops. But critics fear that GM companies are guilty, like other multi-nationals, of caring more for mass marketing than genuine public interest.
Secret GM trials have fuelled public unease and activists have played up the image of Frankenstein foods.
The GM debate is a truly global one, with most countries affected. The industry claims that these foods will feed the starving in the new Millennium but the public fears that profits are being put above food safety, and that our right to consumer choice will cease to be if GM foods are forced down our throats.
At the heart of the issue is whether GM food should be tested more thoroughly than current standards require.
Brian Arnst, Monsanto: Foods generally don’t have to be tested. There are very few foods on the shelf that would have been tested, whereas the food products such as the grain from beans, from soya beans, has been widely tested and there is a wealth of data on that. This data was submitted in the US, it’s been accepted there, it’s been submitted in numerous other countries.
Dr Judy Carman Flinders University: The studies that were done by Monsanto I regard as being really quite inadequate. There were only very short term feeding studies of about four weeks to very small numbers of experimental animals.
International law was not ready for genetically modified food, treating it as no different from normal food. But some scientists now demand the same tests as pharmaceuticals, with independent scientific review and lengthy human trials. The GM industry disagrees.
Brian Arnst, Monsanto: Well, human testing is not done for food products and in discussions I’ve heard other people suggest that it would be extremely complicated, extremely time consuming.
Dr Judy Carman Flinders University: If there is a problem, it might take ten years to show up. And then of course you’ve got to be able to find them, find those cases, and unless you’re actually going out looking for those diseases, you might miss them completely.
Down on the farm many feel that the GM industry has ridden roughshod over them too. Farmers realise that by dismissing public concerns over adequate testing, governments, scientists and the corporations have failed to win over the most important people of all. And in the age of the global economy what big business fears most is consumer revolt.
Warwick Anderson, farmer: You sell to a market, you don’t manufacture a product and then tell the consumer that’s what I want you to have. I think we’ve got to be more mindful of what the consumers want, and we’ve got to be more mindful of what the community as a whole wants.
In February 1999 Greenpeace delivered four tonnes of genetically modified soya bean to the home of British Prime Minister Tony Blair, saying he’s one of the few people who claims he wants to eat it. Whilst corporations have even applied for patents on staple foods like vegetables, tea, soya, coffee and cotton, many feel we’re simply being strong-armed by big business.
Food seems to have awoken public concern over the pace and scale of globalization like no other issue. Perhaps because food production is putting growing pressure on the world’s resources.
The Seattle protests also highlighted over-fishing. It has threatened stocks and led to calls for drastic cuts in quotas, from the Irish sea to the shores of Africa.
Off the coast of Senegal foreign vessels, particularly Spanish trawlers are drag-netting the waters. Senegal was paid $13 million for the rights to fish in her waters for four years.
As many as 1,000 trawlers from the EU regularly fish off the coast of Africa.
But the UN Food and Agricultural organisation estimates that 70% of the world’s fish stocks are in need of urgent management. With dwindling catches Senegalese fishermen are making money out of turtles.
Senegal’s export of fish is threatening the country’s subsistence economy. Fishermen claim there have been accidents between some of the traditional fishing canoes and European boats.
Mactar Gaye, fisherman: My canoe sank after a collision with a Greek boat. It happened at 3 o’clock in the morning. We didn’t have a light. I lost everything. I brought a court action against them, but it came to nothing.
Such tales of dirty tricks on the high seas are surfacing in many parts of the world where fish sustainability is under threat.
Fishing agreements can protect stocks from the rampant free market, but only if they are adhered to.
Australia’s ocean territory is one of the world’s biggest and hard to police. And foreign boats are illegally targeting Australian fish stocks.
In 1999, three trawlers came to fish in a fragile breeding ground. The fish here are known as straddling stocks, as they cut across Australia’s territorial borders.
The trawlers turned out to be South African, although they were fishing incognito. The local fishermen wanted to confront them but the government told them there was nothing they could do. Again, international law lags behind the reality of the free market.
Joe Pirello, Fisherman: We could have got in front of them, we could have cut their nets off, we could have done whatever was necessary to protect our resource. It’s an Australian resource. It needs protecting.
For now the only thing protecting this resource is international goodwill.
The only way to regulate the global economy then, is by global rules. But what if the organisations making those rules like the World Trade Organisation and the International Monetary Fund are influenced by already powerful nations?
Some say America now uses the IMF as another tool for global economic domination. As the largest shareholder the US can veto any amendment.
Stanley Fischer, International Monetary Fund: We always have to take into account what our shareholders want. We work for the 182 governments that own us. If the US was passionately opposed to something we probably couldn’t do it. If they merely oppose something without taking a strong stand we can do it.
But does it matter that the US has so much say over organisations like the IMF?
Jeffrey SachsHarvard University: There’s a certain kind of logic. They put in the money, but it’s also a serious weakness. What kind of world are we really going to live in? Are these institutions really going to reflect, in a serious way, the best collective aspirations of humanity. And including the 84% of the humanity which lives in the developing countries.
In August 1999 the US government complained to the World Trade Organisation that the EU was buying too many bananas from the Caribbean Windward Islands, rather than from US banana multinationals like Chiquita - a company which happens to be a big sponsor of American political parties. The US threatened a steep $200 million worth of tariffs on EU goods.
The WTO has since been slammed for ruling in America’s favour, and jeopardising the living of 200,000 banana farmers in some of the world’s poorest countries, like Nioka Abbott.
Nioka Abbott: It will mean doom. Because in St Vincent, especially in the Windward Islands, we have no other alternative.
There is only one alternative argues St Vincent Prime Minister Sir James Mitchell.
Sir James Mitchell, St Vincent Prime Minister: The solution to this problem is that first of all the Americans leave our bananas alone!
Ten years ago the Caribbean exported twice as many bananas to Europe, struggling to meet EU standards.
Pearlina Pereira, Inspector Banana Growers’ Association: If it gets less than 80% quality rating we reject the whole consignment.
Q: What would happen to the farmer then?
A: He doesn’t get paid.
The EU had preferred to buy bananas from its former colonies in the Caribbean and Africa. But globalization is driving nations to combine in new, ever larger, groupings. Over recent years there has been a boom in agreements designed to further free trade within these groupings, by doing away with tariffs and restrictions.
One such agreement was the NAFTA, or North Atlantic Free Trade Agreement. When Mexico, Canada and America signed it in 1994, they promised prosperity for all.
Bill Clinton: To provide an impetus to freedom and democracy in Latin America, and create new jobs for America as well. It’s a good deal, and we ought to take it.
In fact NAFTA meant that US manufacturers could decamp to Mexico, where wages are dirt cheap.
Since then, over 100 American companies have come to the Mexican border town of Juarez. But they pay their workers just 53 cents an hour, less than $30 a week. Unions here are virtually banned and safety is lax.
The vast majority continue to live in grinding poverty. The owner of this cardboard house works for a foreign company. Globalization has given people jobs and skills, but they want more.
Judith GalarzaHuman Rights Activist: The salaries are an offense to humanity. Because if you consider how much they produce, they are bringing in a lot of wealth. This salary is predetermined by the Mexican government, but it is a salary that doesn’t allow us to survive.
The suburb of Anapra, just a few hundred yards from the Mexican-American border, is the home for thousands of factory workers.
Joan Irene lives here with her husband and three children in this tiny house. There is no sewerage, no running water, and her one luxury is electricity, stolen from the power lines above her home.
Does she question the low wages?
Joan Irene: Joan [through translator]: Yeah, of course. Many people ask themselves the same thing. The salaries are just very low here in Juarez, and I know a lot of people who have just decided to give up and to go to El Paso or try to make their way into the United States because of that.
So the free market here has not meant equal opportunity for all. Not surprisingly then, NAFTA has brought no decrease in the number of illegal border crossings. (PAUSE) One man goes over the wall. Below, another crouches, waiting. Despite NAFTA, these people still choose the American dream over the Mexican reality.
Another pitfall of globalization is that production can shift to those countries where environmental standards impose the least constraints. Most would agree that third world countries have paid the highest price for the globalised economy. Traditional livelihoods have been threatened as more land has been appropriated by big business.
Nigeria is the world’s sixth largest oil producer. Shell Oil pumps most of it in a joint venture with the government. But government corruption has seen to it that almost 50 years of oil production have failed to benefit the majority of Nigerians.
Ledum Mitee, Environmental Activist: Land is not just some property, some factor of production to be exploited and wasted. To us land is more than that. It has some spiritual significance. It’s where our gods are supposed to reside.
The villages of the Niger Delta rely on fishing and agriculture for food. But the once pristine jungle is now littered with oil spills. A spill destroys crops and can travel far in the rainy season. This spill has been here for six months without a clean-up by Shell.
Chief Promise Osuma, Otuagwe Town: I went to Shell and reported it. Since then this oil just spread all over. That time it was during the flood period, so the water covered the whole area. From this area the water carried the oil very close to our community. Many crops were destroyed. We had nothing to feed on.
IOronto Douglas, Environmental Activist: I lived in England. I schooled there. And I’ve been to Holland and I’ve seen the way Shell operates there. The way they operate in Nigeria is environmental racism.
The Nun River pumping station is closed. Shell recently lost a third of Nigerian production, as angry communities chased away staff and seized vehicles. Shell says it understands the importance of such protest, and like other oil companies, now claims to be cleaning up its environmental record.
Bobo Brown, Shell Oil: The increase in tension in the Niger Delta is serious, I would characterise it as serious. That would be one way to look at it. Serious in terms of its implications, serious in terms of the way we as a company regard it.
Both Mexico and Nigeria highlight the growing need for business to keep to Western norms, even when operating in countries where the social or environmental standards may be weak.
Many of the dilemmas of globalization are posed by China: the world’s fastest growing economy. A mass of contradictions, China has both celebrated 50 years of Communism, and welcomed Capitalism with open arms.
The embrace of the free market in China can be seen in the firm footing one company has found here. Amway, short for 'the American Way', is the world’s biggest multi-level marketing organisation. It sells American cosmetics door-to-door.
Amway’s Chinese success is due to twenty years of economic reform. Ever since Deng Xiaoping praised self-enrichment, the race has been on for overnight capitalist-style wealth. Amway products cost three times their Chinese equivalents, so determined salesmen use any tactics.
salesman: Here we used the Amway toothpaste – the colour is still the same, because the bag is well printed and the colour is hard to remove. But you can see this part has turned a little white. You can see lots of residue where we used the other toothpaste. Look, every day our teeth suffer from this.
In 1997 Amway’s sales in China netted $178 million. Recruits buy into the promise of a lifestyle far removed from Chinese tradition.
Animator: All of you follow us! All of you do it! The people in the first row… second row… upstairs… everybody do it!
At mass gatherings akin to spiritual revivals, Amway distributors meet to share sales secrets. When China banned pyramid selling schemes for a brief period in mid-1998, nervous of this growing spiritualism, 10 were killed in the riots that followed.
Su Lin bought the dream, and is also now a full time distributor. As a brick in the Amway pyramid, she earns thirty times what she used to in the Red Army.
Su Lin, Amway: We shouldn’t assume life overseas is definitely better. We can pursue a better life here in China. It depends on how hard you work. The reason I work so hard for Amway is to have a better life by making a greater effort.
Her goal is to take her parents travelling overseas. Economic reform has meant that living standards in China double every 10 years, so her dream could well become a reality.
Globalization has also put China, like other Asian countries such as Burma and Indonesia, under growing pressure to adopt political reform. When the Communist party took power in 1949, it promised to look after the workers with a cradle-to-grave support system dubbed the iron rice bowl.
The move to the market economy has shattered that support system, rural China is mired in poverty and mass lay-offs in state industries are reaping social havoc. Yet those who call for labour rights or free unions still risk hefty jail terms. Many argue the Asian 'Tiger' economies have been successful not thanks to free trade, but to totalitarian regimes which ignore workers' rights.
This man has already spent nearly two years in a Chinese jail. His crime was to establish a free trade union. Han Dongfang now broadcasts the illegal Radio Free Asia from Hong Kong. His programmes criticise the Chinese authorities’ heavy-handed approach to economic problems.
Han Dongfang: In the Sichuan Iron and Steel Factory, there are 30,000 workers who haven’t received salaries for ten months, and this has aroused strong dissatisfaction. We strongly condemn the illegality of the Zigong authorities who violently cracked down on the peaceful demonstration by workers.
Dissatisfied workers on the mainland tune in regularly to his show. Mr Xiao is a machine worker from Zigong. He fled the city after the demonstration, having been questioned by police. A labour rights activist, he knows how unions are organised overseas.
Anon. Mr Xiao: A lot of city workers can’t find a place or organisation to protect themselves - so some violent situations arise. We read about these in the press. If there were free trade unions which let the workers speak out, I think these violent cases might be reduced or disappear altogether.
Dissident Xu Wen Li spent 12 years in jail for promoting democracy. He believes labour unrest in China could portend huge social change.
Xu Wen Li, Dissident: The Chinese Communist party used workers and peasants to overthrow the KMT Nationalists in the past. This is the revolutionary method used before, so the government is really worried that dissidents will inform people of their rights and use the same method to overthrow the regime or seize power. They’re really worried about this.
Anon. Mr Xiao: If this situation continues more large-scale upheavals may appear in China. If our leaders and policy-makers don’t confront reality and solve the problem, the government will probably be toppled in the future – and that could be a disaster for the whole of China.
Whether or not labour rights will bring massive upheaval, few doubt that China will be one of the economic giants of the 21st century. It has signed a historic deal with the US paving the way for it to join the World Trade Organisation. The deal will mean more Chinese goods in the west, as well as easier access to 1.2 billion Chinese consumers. But it will also put pressure on China to make human rights improvements, if it wants to be a long-term player in the global economy.
As that economy knits ever more tightly together, our economic behaviour affects other countries more than we know. South Africa’s economy is built on gold, discovered here more than a century ago. But as gold prices plummet to a 20 year low, a quarter of a million miners are affected.
James Motlatsi, National Union of Mineworkers: We are talking about quite a number of communities which will be destroyed, quite a number of people who will be devastated by the gold price, by the decisions of the international reserve banks.
Gold used to be the best way for Central Banks to store reserves of national wealth. But now the boom in what is known as FIRE activities – or finance, insurance, and real estate — means that currencies and stocks - rather than gold -are the most profitable way for banks to hold financial reserves. So they’re selling gold.
3km below ground at the East Rand mine, the gates open on another world.
This is a place of tight spaces and stifling heat – a world of half-lit figures and constant noise.The wages for this dangerous, dirty work are shockingly low, roughly $180 a month. But the jobs South Africa’s mines provide feed families across Southern Africa.
To save these jobs South Africa’s powerful black unions are again on the march. In May 1999 Britain became the number one bogeyman when its government announced it was selling off half its entire gold reserves. The IMF also announced sales of its gold. Gold prices plummeted. It was feared that global panic would set in and other banks would follow.
Godsell with British official: We hope that your government can think seriously about its actions and will in fact review its current program of sales, in the interests of our country and in fact of gold producers, particularly the developing countries who produce gold.
Bobby Godsell, Anglogold: We’re not saying to central banks don’t sell, that’s stupid. I mean, we produce a product, we want people to buy it, and if we want them to buy it, they must be able to sell it. We are saying, hey, you can’t reverse 150 years of history in a few panicky weeks.
James Motlatsi: I was in Britain, when the Prime Minister was asked, he said in his reply, it’s better for Britain to sell now than to sell tomorrow because anyway the gold price will go down and down and down – that’s what he said - regardless of what the consequences of what will be caused by his decision to the developing countries.
For the workers of the East Rand mine, the consequences are devastating. With the gold price so rapidly depressed, the unions have been powerless to stop the mine from being forced into liquidation. As of this moment 5,000 men are out of a job. They will get no severance.
Elliot Maneli, miner: I’m going home, to stay at home, because I’ve got no job, going to stay at home.
So one nation’s prudent economic move is another’s downfall. By September 1999 gold stabilised as European banks announced a cap on sales. But for South Africa, with 40% unemployment, it was too late to stop job losses. These are the tough choices of globalization.
Whilst business may put profit before the needs of the poorest, governments have shown a powerful conscience. One in four of the world’s population today lives in poverty. But in 1999 the most powerful nations agreed $100 billion in debt relief from the year 2,000.
This will help to combat third world poverty, but the challenge of globalization is to bring its benefits of health, wealth and democracy to all. There’s still a long way to go.
And that’s why tens of thousands of ordinary people came out onto the streets of Seattle, in the face of heavily armed riot police, to demand fairer rules for trade. The police had expected a clique of violent anarchists. But when they fired tear gas and rubber bullets on protesters, many said they had gone too far. A state of emergency was declared. But every visiting government would have heard the cries for more social justice in global trade.