Netsuke: A grouping of animals that make up the signs of the Chinese zodiac with an ivory manju dragon, the emblem of the year 2000, at the centre. Photo courtesy of Sotheby's New York.

The term globalization is widely used to describe an observable reality, as well as to justify a political programme. It refers, on the one hand, to the vanishing of many limits on international commercial and investment practices, because of a vastly increased human reach achieved by advanced communication and data processing technologies, and to the resulting process of partial but rapid global economic integration. On the other hand, globalization stands for a political mission aimed at altering the relationships between States and large business organizations. Before the eyes of Governments and communities of commentators, globalization is thus presented both as an ongoing, unstoppable process, leaving them without policy options, as well as something they must help bring about through programmes of deregulation, financial liberalization and privatization. Because the two sets of notions are inappropriately connected in numerous analyses that inform policy discourse, the true nature of the political programme tends to be obscured by assumptions of economic necessity or inevitability.

Various UN organizations are ideally positioned to make major contributions to the construction of an improved conceptual apparatus with which the phenomena attending globalization can be understood, because:

• The United Nations is unique as the world's sole organ that is not under the control of any particular country, and in which all countries have the opportunity to lend their voice to ongoing discussions concerning common human endeavours. The attainment of long-term equitable global economic development ranks with security and the preservation of the environment at the top of the list of such endeavours.
• Unlike other international organizations such as the Organization for Economic Cooperation and Development, the World Trade Organization (WTO) and the International Monetary Fund, UN organizations charged with development or education have not come under suspicion that they represent or are tainted by partisan economic interests.
• Many UN organizations are fundamentally committed to promote learning in their areas of competence, which is a necessary disposition for a project of conceptual improvement.
• Various UN institutions are well placed to contribute to such a project, because they have hands-on experience in a multitude of different social and political settings, and vast institutional memories.
• Through its channels of communication with all corners of the world for various purposes, the United Nations can be a powerful disseminator of knowledge.

Economic crises and other developments in the late 1990s have already prompted at least two gradually evolving general agreements about the fallacy of earlier suppositions concerning globalization. The belief that advanced deregulation will eventually benefit everyone in every country has been severely undermined. Using the words of UN Secretary-General Kofi Annan, the rising tide, in the metaphor often invoked for vastly expanded markets, does not necessarily lift all boats; it has tended to lift the yachts. James Wolfensohn of the World Bank has commented that, "at the level of people", the system of the global economy isn't working. Numerous others have conceded that globalization is enriching the few at the expense of the many, and that its promises of equitable economic development have not been fulfilled anywhere.

Another very important evolving agreement is that the one-size-fits-all approach to economic analysis and to solutions for economic problems is intellectually primitive at best, and at worst causes disaster for countries with disturbed economies. The primary conceptual challenge for UN agencies lies in the fact that no generally accepted conceptual remedy for either fallacy has been forthcoming. Two areas of attention appear to be obvious:

Investigation, deliberation and thought ought to be directed at the question of where a line must be drawn between a type (and degree) of market liberalization that will stimulate and a type that will harm desirable domestic socio-economic development. There is, for example, good reason to conclude that the large influx of foreign capital in some countries has not only expanded wealth among the propertied classes, but also stimulated wide-ranging, if not all-round, economic development. There is also no question that deregulation of local financial systems created new and unforeseen vulnerability to which certain countries fell victim when unforeseen and uncontrollable developments caused capital flight.

Probably helpful in this context would be the introduction into general discourse of a solid distinction between traditional foreign investors who wish to participate in the development of certain industries and speculators who, like herds of antilopes, stampede out of emerging markets at slight provocations. Several UN agencies are well placed to help introduce realistic caveats into what has been, until now, a relatively sterile and simplistic international discussion on the benefits of unfettered markets. The main arguments levelled at the protesters against the ill-fated WTO meeting in Seattle in late 1999 reflected the manner in which arguments used to justify the relatively well-understood and relatively beneficial international economic arrangement of free trade have been used to plead for liberalizations that unleash entirely different and ill-understood economic forces.

The advocates of the political mission of globalization made a mental jump from the evidence that a relatively free flow of goods across borders has brought great benefit to countries participating in the international free trade system, to the conclusion that an equally free global flow of capital would enlarge those benefits and that countries participating in a system of globalized industry are obliged to extend blanket rights to foreign investors. The strong dissimilarities in the two types of trade that have been largely ignored are:

• The amount of money involved in capital trade is hundreds of times greater than the total value of trade in goods and services;
• Capital moves almost instantaneously to everywhere it can go, once a trade decision is made; under a liberalized regime, it is unencumbered by physical and social limitations;
• The interactive effects of currency trade and trade in many financial instruments and their relatively new derivatives are but haphazardly understood, if they are understood at all;
• Speculation as distinct from conventional investment in promising ventures tends to direct most capital trade decisions, especially when the so-called emerging markets of the non-Western world are targeted.

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