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World economy generates angst


THE WORLD is having a good year: The International Monetary Fund's annual report, released last week, forecasts 4.7 percent growth in the global economy this year, up from 3.3 percent last year and the most in more than a decade.

Almost every part of the world is sharing in the gain. Asian countries and Russia, economic crisis points in 1997 and 1998, are recovering. Japan seems to be emerging from a decade of stagnation. The European Union and the United States are prosperous. Much of Latin America is doing well. More broadly, a number of indicators of human welfare have been improving in recent years -- life expectancy, infant mortality, quality of diet, access to safe water.

Still, 1.2 billion people -- one out of every five on the face of the earth -- live in desperate poverty, subsisting on less than a dollar a day, according to a recent World Bank report. "We're trying to move in the direction of making the global economy work for all," said Stanley Fischer, first deputy director of the IMF, as that organization and the World Bank gathered for their annual meetings this week in Prague.

The showcase agenda items are the fight against AIDS, reducing the debt burden of the world's poorest nations and closing the "digital divide" of access to high technology. That the IMF and World Bank chose these issues to highlight -- presenting themselves as healers of the world's ills, not just gray-suited money technicians -- suggests that they are sensitive to the criticism that erupted at a World Trade Organization meeting last year in Seattle.

The protesters have followed the bankers to Prague. A heterogeneous coalition of environmentalists, anti-corporate activists, anarchists and others say that the policies that are "globalizing" the world also trample on the rights of the poor, cater to big business and despoil the environment. The Sun's Hal Piper analyzes the issues.

What are the International Monetary Fund and the World Bank?

Both institutions were set up after World War II. There is some overlap, but basically the World Bank provides development assistance ($16 billion in loans to poorer countries annually), while the IMF works for global economic stability by, for instance, offering infusions of loaned money to countries whose economies are temporarily in trouble. It helped rescue Mexico from the collapse in the value of its peso, for example.

Because the United States, Europe and Japan provide most of the money, they have most of the say-so in both institutions' operations.

Is that what the protests in Prague are about, control of the money?

It's not as simple as that. The dispute is more philosophical, and the critics are fragmented. Some see the two organizations as a juggernaut that is working to "globalize" the world -- that is, force weaker countries to conform to business standards rigged in favor of rich countries and multinational corporations. Some of these critics want to abolish the IMF and World Bank entirely.

Other critics accept that the integration of the world economy is inevitable, and possibly even desirable; but they want stricter global environmental and labor standards. That's why the protesters in Seattle last year seemed to be such unlikely bedfellows: labor unions and save-the-turtles activists, anarchists and world-government idealists.

And they all hate McDonald's.

Yes, if any one thing unites the protesters, it is aesthetic revulsion against "globalization" -- the integration of world systems and people. The fear is that a homogenized "Coca-Cola culture" is being foisted on the world.

Chinese grandpas know who Colonel Sanders is. Palestinian children wear T-shirts featuring Disney characters. Japanese teeny-boppers sport ghetto attitudes and chant rap music.

And business models change. Wal-Marts grab business from the mom-and-pop stores. German blue laws are swept away, forcing shops to stay open longer. Spaniards give up their siestas to work harder.

A Frenchman named Jose Bove became a national hero last year when -- like Carry Nation taking her ax to a saloon -- he smashed a McDonald's restaurant. He will be taking bows in Prague this week. But Europeans still love Big Macs. McDonald's European sales were $9.6 billion last year.

Nor is the global transmission of culture one-way. Americans read the British Harry Potter books, collect the Japanese Pokemon cards and eat Thai food. Some Arab women wear Paris couture abroad and the veil at home. A Russian and a South African play chess over the Internet. It is more an encounter of cultures than a takeover by one culture.

What accounts for globalization?

Speed and access. In the wired world of today, everything is instantaneously available everywhere -- knowledge, finance, technology -- and culture.

Some of the world's best computer programmers come from India. Jody Williams won the 1998 Nobel Peace Prize by mobilizing activists against land mines, in the face of inaction by the world's governments. Rich investors in first-world countries pour needed capital into Third World countries.

Even justice is being globalized. Last year, Gen. Augusto Pinochet was arrested in London on a warrant issued by a Spanish judge for alleged crimes committed in Chile. And Radovan Karadzic, under international indictment for alleged war crimes in Yugoslavia, is being sued for damages in a New York court by some of his victims.

But crime, pollution and disease epidemics also move freely through the world, as do migrant workers and refugees -- 120 million of them last year. And, of course, pornography is just a mouse-click away from a child.

Will globalization lead to a homogenized world?

Six billion people, living in different geographies and climates, with different histories, can never be homogenized.

Look at how difficult it has been to create a European Union. Though there is general agreement that Europeans benefit by harmonizing currencies and legal and safety standards, a backlash has begun. Italian villages that have made cheese for centuries defy hygiene standards devised by some faraway bureaucrat. So now there is a black market in bootleg cheese.

Another analogy might be the process of "continentalization" in the United States. Americans now have a common language, banking system, food and drug safety laws and legal code, all tied together with interstate highways and network television. Yet in many ways, Americans are more culturally diverse than 50, 100, 200 years ago.

Tell it to the American Indians.

It's true. Some cultures will be swamped, and some languages lost. That has been happening forever, though globalization may speed up the process.

On the other hand, a news photo in 1998 showed an Orthodox Jew at the Western Wall in Jerusalem, holding his cell phone up to the ancient stones so that his relative in Paris could say a prayer at the holy site. This was globalization in the service of traditional culture.

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