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Summiteers will boost benefits of globalization
Financial Post, Weekly edition, Friday, May 15, 1998
India's dismaying nuclear tests this week will likely disrupt the agenda of this weekend's G8 summit in Birmingham. However, leaders of the seven major industrialized countries and Russia should not be put off the important themes they are to discuss: sustaining global economic growth, improving job prospects and fighting international crime. Actions contemplated in these areas would strengthen global institutions, and thus support worldwide economic growth.
Finance ministers, who met earlier in London, have given their leaders a five-point plan to beef up financial-system supervision systems in order to prevent another Asian-type contagion. They will swap best-practice ideas on employability -- such as the benefits of skills training, labor-market flexibility and welfare-to-work programs.
Ministers have forwarded a package of stronger anti-money laundering measures for approval. Discussions on the immense complexity of investigating and prosecuting cross-border offences will also deal with other kinds of organized international criminal activities such as trafficking in drugs, firearms and stolen vehicles, as well as computer crime.
The G8 leaders have also been given proposals on these themes from private-sector business groups.
The International Chamber of Commerce, for instance, has advised them not to get caught up in the growing public tendency to view the phenomenon of globalization as a threat to growth and jobs, rather than an opportunity. Business-driven globalization can help raise living standards by lowering costs, offering a wider choice of goods and services, and improving their quality.
Increased foreign inward investment, a key part of the process, can help stabilize economies hit by situations such as Asia's currency turmoil. Business investment is most successful in creating and sustaining jobs, not make-work programs by governments.
Still, people everywhere are fearful about "the darker side" of globalization. Take, for example, the spread of transnational crime. Crooks have adapted to more open borders and exploited new technology far more quickly than government regulatory and law-enforcement agencies. The financial panic in Asia has -- once more -- rattled confidence in supervisory and early-warning systems. Protectionist pressures are rising again.
As Nicholas Bayne, the former British High Commissioner to Canada, said at a pre-summit conference in London, the challenge for the G8 leaders will be "to respond to these anxieties without forfeiting the benefits of globalization."
Keeping markets open and encouraging further liberalization of trade and investment regimes remain the best approaches to global stability and prosperity.
Source: This information is provided by the Financial Post.
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