Globalization: economists versus normal people

Guy Pfeffermann (*)

Summary: "Globalization" means many different things to different people, which is one of the reasons why there is so much emotional debate about it. If globalization is the adoption of "foreign" goods, concepts and values, then it has been going on throughout history. Current critiques of globalizations parallel attacks on bourgeois values in the Communist Manifesto of 1848. A cool look suggests that there are many more winners from globalization than there are losers, and that the number of people who are living in abject poverty has been reduced considerably since people began talking about globalization. Keywords: globalization, economic development, poverty, distribution.

“An abstract term is like a box with a false bottom; you may put in it what ideas you please, and take them out again without being observed” (Alexis de Tocqueville, La Démocratie en Amérique, 1840)

Some time ago I gave a class at the School of Advanced International Studies of Johns Hopkins University called: “ Globalization: Should we join the demonstrators ?” I started the class by asking students to come up with various effects of globalization, and jotted them down on the blackboard, listing negative effects on one side and positive ones on the other. One list read as follows: environmental degradation, domination of rich countries, loss of national identity, worsening income inequality, exploitation of workers and children, economic vulnerability and so on. The other list read: economic growth, preservation of national identity, higher income jobs, less worker exploitation, technology transfer, improved health standards, etc, etc. Curiously, several items figured on both lists.

Such apparent confusion raises the following questions:

Why is it that that the debates about globalization generate so much emotion ?

Why is there so little apparent consensus among people of different perspectives, even though all of them, one may presume, are people of good will ?

Is globalization a recent phenomenon ?

Who are the main winners and why don’t we hear more from them ?

Has globalization increased inequality and poverty ?

Many universes of discourse

“Globalization”, like “privatization”, is an awkward word, which no poet would ever dream of using. I looked up the on line Encyclopedia Britannica for “globalization” in search of a definition, and came up with a list of 36 suggested articles. The list was headed by electrical, automobiles, Swiss trade and finance, Commonwealth summit, Western Europe, and paints and varnishes. There doesn’t seem to be an entry as yet for the word “globalization” itself. I think this is symptomatic of the uncertainty surrounding the concept.

Many of the globalization discussions remind me of the classic movie “Rashomon”. As you know, the film focuses on a party of medieval Japanese travelers held up in a forest by savage bandits. Five witnesses explain what they saw, and they saw five totally different events. In a similar way, lawyers, economists, environmentalists and other professionals may each see a hydroelectric dam, an international investment treaty or a shoe factory, in totally different ways. Part of this is due to professional paradigms, their different “universes of discourse” and part to each professional’s incentives.

Professional and cultural universes of discourse differ enormously from one another. Economists, for example, are used to compare both costs and benefits. Such a way of approaching issues is likely to be quite alien to environmentalists when they considering threats to bio-diversity. Likewise, economists are trained to consider trade-offs between alternative “goods” or “bads”, while some other social scientists think in terms of absolute “goods” or “bads”. This contrast came to the fore a few years ago when a well-known World Bank economist suggested that citizens of the poorer countries might rationally choose to use more polluting plants. This caused an uproar, yet what he said is perfectly acceptable to most mainstream economists. Economists, as do business people, also believe that resources can be mobilized and combined so as to increase wealth. Indeed, “growing the pie” is the very essence of development economics, a discipline grounded in humanism. Conversely, professionals from equally ethical disciplines, for example some environmentalists, see profit-based economic systems as “zero-sum-games”, in which the “size of the pie” (the amount of real resources available on the planet) is finite and therefore only the distribution of “goodies” to various segments of the population changes.

Not only ways of thinking differ enormously, but also what are considered acceptable rules of evidence. Qualitative fieldwork methods commonly used by anthropologists would be disparaged by economists or engineers as “anecdotes that don’t prove anything”. Conversely, most professionals who are dealing one-on-one with clients (for example doctors or social workers) wouldn’t dream of allowing their judgements to be guided by formal mathematical models.

Unsurprisingly, as George Orwell predicted, even though the word globalization had not been invented in 1947 when he published “Politics and the English Language”, the multiple universes of discourse are reflected in semantic confusion, each discipline claiming the high ground. A notable example is the use of the words “free” or “fair” as in “free trade” versus “fair trade” . These words are often being used by interested groups (for example labor unions) advocating labor market or trade restrictions which are detrimental to those who are not members of the group. From an economist’s viewpoint such rules are the opposite of “free” or “fair”. For example, in the United States a number of affluent counties enacted “fair wage” rules under which the county can contract only with firms which pay their unskilled workers twice or more the national minimum wage. The rationale is that counties should only accept “quality work”; the effect is to drive up costs and taxes, and to exclude the many workers who are offering their labor at the minimum wage. Ceteris paribus, poverty will increase and inequality will worsen. This, however, is not a view shared by many other professions, and economists, as in many other instances, will likely be castigated as being insensitive to human suffering.

Perhaps there are so many lawyer jokes, economist jokes, engineer jokes and so forth because the public recognizes that professions have highly idiosyncratic ways of thinking about the world, which are often at odds with general public perceptions, as well as with one another. I am an economist, for example. Like most of my colleagues I think that when the price of a product goes up, this is likely to be the result of a changing balance between supply and demand. On the other hand, according to a 1996 survey, 70 percent of Americans believe that when prices go up, it is mainly because companies are trying to manipulate prices to increase profits. In the same way, 90 percent of economists surveyed think that trade agreements are good for the economy, but only 55 percent of the general public think so. Likewise, economists tend to believe that technological change, rather than imports from developing countries, causes job-destruction and widens wage disparities; the public believes the opposite.

Such lack of common ground among highly educated professionals and with the general public makes rational discussion, let alone achieving consensus, extremely difficult. Unsurprisingly, semantic uncertainty and the frustrations stemming from a feeling of lack of fundamental understanding by other parties tend to invest globalization debates with high degrees of emotion, and help to explain why violence often surrounds these debates. This is especially so when globalization discussions touch on the more intimate aspects of people’s identities, such as food, schools and who shares one’s neighborhood. Politicians sense, correctly, that the language of economics comes across as being abstract, dry and to most people unconvincing, while that of environmentalists, for example, is found by many to be emotionally, if not always intellectually, appealing. This is probably why hardly any politicians have come out clearly in favor or against globalization; instead they are prone to using ambivalent phrases such as “globalization with a human face”.

Nothing new

Demonstrators tend to depict globalization as being a “recent and dramatic development” (David Henderson, “The Changing Fortunes of Economic Liberalism”, IEA Occasional Paper 105, London, 1998, p. 58). In fact, depending on the definition one chooses, “globalization” can be said to have gone on since prehistoric times. “Oetzi”, the “Ice Man” who was dug up from a Tyrolean glacier after 5,300 years, carried traded equipment. Flint artifacts of the exact same quality that Oetzi was carrying have been found as far away as southern Germany, at distances of between 300 and 400 kilometers. It is assumed that there were actual flint merchants at that time who had to cross the Alps to do this. The Alps were less of a barrier than previously thought. Over the following millennia, people traveled the earth, not only bearing goods but also transmitting knowledge. Jared Diamond in his pathbreaking book: “ Guns, Germs and Steel” (Norton, 1999) contrasts the Eurasian (East-West) land mass, which lends itself well to long-distance communications, to the (North-South) Americas, cut in half by the Darien Gap, and (also North-South) Africa by the Sahara desert, where long-distance communications were much more difficult, not to mention islands such as Papua New Guinea, which evolved with minimal external contacts. In modern parlance, Eurasia became “globalized” to a greater extent than the rest of the world. Later, trade, migration and invasions ensured the pollination of ideas and technologies across cultures. The Romans lived in a thoroughly “globalized” world; underwater archaeology daily brings up new testimonies to the extent and diversity of trade

To cite Amartya Sen “Is globalization really a new Western curse? It is, in fact, neither new nor necessarily Western; and it is not a curse. Over thousands of years, globalization has contributed to the progress of the world through travel, trade, migration, spread of cultural influences, and dissemination of knowledge and understanding (including that of science and technology). These global interrelations have often been very productive in the advancement of different countries. They have not necessarily taken the form of increased Western influence. Indeed, the active agents of globalization have often been located far from the West. “The high technology in the world of 1000 A.D. included paper, the printing press, the crossbow, gunpowder, the iron-chain suspension bridge, the kite, the magnetic compass, the wheelbarrow and the rotary fan. A millennium ago, these items were used extensively in China – and were practically unknown elsewhere. Globalization spread them across the world, including Europe. A similar movement occurred in the Eastern influence on Western mathematics. The decimal system emerged and became well developed in India between the 2nd and 6th centuries. It was used by Arab mathematicians soon thereafter. These mathematical innovations reached Europe… playing an important part in the scientific revolution that helped to transform Europe.” (“How to Judge Globalism”, American Prospect, January 1, 2002). European areas which, for one reason or other, remained cut off from these cultural and economic currents, suffered backwardness.
To me recent “globalization” is simply the continuation at an accelerating pace of trends including: European overseas expansion, the industrial revolution, the related strengthening of individual and corporate property rights, including notably the exponential increase in the number of patents, trade and capital movement liberalization, technological progress, and in particular what has been called “the death of distance”. The fairly recent break-up of the Soviet Union, as well as the adoption of a form of capitalism by the Chinese communist party have expanded the ambit of globalization to all but very few parts of the planet.

Nor is reaction against technological progress, trade and the influence of foreign ideas anything new. An ancient Roman writer already bemoaned the perils of deforestation. Closer to our times, Karl Marx and Friedrich Engels expressed the feelings of modern anti-globalization movements eloquently, when they wrote the Communist Manifesto (1848):

What does [X] stand for ? The word they used was “bourgeoisie”, but you can readily see that “globalization” would fit in just as well, indeed even better in our days.

John Kay pointed out (Financial Times, Nov. 14, 2001) that “Globalization is things that people hostile to the modern market economy dislike. It is entirely possible to pick and choose from these many components of globalization. You can dislike the increasing homogeneity of shopping centers worldwide but still support free trade in manufactured goods. You can favor deregulation of electricity markets but worry about the consequences of worldwide adoption of an Anglo-American model of capital markets… Yet all these strands of globalization have one common business consequence. That consequence is the substitution of industrial structures based on competitive advantage for those based on historic market position”.

Winners and losers

Opponents of globalization speak on behalf of a large number of groups and people whom they see as losers (or victims; see Robert Hughes’ Oxford lectures published as “Culture of Complaint: The Fraying of America”, Oxford University Press, 1994). According to anti-globalizers, the main losers include:

workers in the advanced industrial countries, whose income is depressed or who are losing their jobs because of imports from “cheap labor” countries

immigrants take jobs away from workers of affluent countries and add to the tax burden by receiving free government services.

workers in the poorer countries who are employed in “sweatshops”

working children of the developing countries

the flora and fauna of advanced as well as poorer countries, which is getting depleted

indigenous groups who are being expelled from their lands by modern investments

minority cultural groups such as the French, who are being “invaded” by majority Anglo-Saxon movies, foods and other products

developing economies which were ravaged by financial crises brought about, according to opponents of globalization, by liberalization of capital inflows,

states, which lost power to multinational corporations.
and so forth.

Each of these items lends itself beautifully to graphic representation. It is easy, indeed inviting, for CNN to take a shot of an unemployed worker in a US steel town; an endless row of Indonesian women bent over sewing machines; a Pakistani child stitching a football; dying monarch butterflies; bewildered Amazon Indians huddling near a bus depot; Jean Bové bulldozing a MacDonald’s outlet in Southern France or Thai bank executives reduced to selling fish on the streets. In a criminal court, these would make great “exhibits”.

Proponents of globalization have a much harder time, because they cannot produce dramatic exhibits. Who benefits from the free movement of ideas, goods, people and capital ? Their answer is: the vast majority of the world’s population. Indeed, one of the main benefits of globalization is that real prices have come down as a result. Most importantly from a distributional viewpoint, necessities such as food and clothing are much cheaper today than they were ten or twenty years ago, and this reduction is in large part a direct consequence of liberalization and trade expansion. Being able to purchase cheaper food and clothing, as well as other necessities, poorer people of all countries, developing and affluent, gain purchasing power. With the money so saved, they can afford to buy that one extra good or service which, before liberalization, had been just out of their reach. Such gains benefit literally billions of people, while workers who lost their jobs for whatever reason, number in the millions, a quantum difference. Not only did the price of food and clothing decline, but that of most consumer goods and services – computers, cellular phones, VCRs, portable CD players are now within the reach not only of the vast majority in rich countries, but of a rapidly increasing number of people in developing countries. And yet, as noted, the very real plight of the unemployed minority receives massive media attention, while the welfare of billions goes unnoticed.

I remember the time when the government of Haiti was planning to lower import duties on imported cooking oil; this was going to put the country’s only oil plant out of business, putting three hundred employees out of work. The media ran an intensive campaign against liberalization, focusing on the 300 workers. Yet cooking oil represented 5 percent of the entire budget of Haitian households (and a much larger proportion for poorer families). Since imports would cut the price in half, this meant that liberalization would raise the real income of the average Haitian household by at least 2 percent in one fell swoop (the equivalent of a year’s worth of GDP growth) and that of poorer households even more. The media, however, ignored this welfare impact, and so it is in most countries. Because they tend to be unorganized and because the impact of price reductions on each individual is small, developing country consumers do not have a voice, producers and organized labor do.
The same goes for workers in the industrial countries who are displaced by technological change (opponents of globalization tend to neglect the fundamental role of technological change in disrupting established patterns). Overall unemployment in the industrial countries has not increased systemically over the last 10-20 years. Therefore, while some lost jobs, others found new ones. Indeed, considering population increase and immigration, far more people found new jobs than lost jobs. Yet the media focus on losers, not those who found new jobs.

Another problem confronting proponents of globalization brings us back to the economists’ way of thinking, and that is the use of the counter-factual. When economists consider an intervention, for example an investment, they focus on the changes which the facility and its construction would bring about. In order to calculate changes it is first necessary to describe what would happen in the absence of intervention. This is what is meant by “counter-factual” – the French have a more colorful expression: l’anti-monde. The counter-factual scenario, by necessity, is debatable, since it is not possible to tell for sure what will happen in the future. Because of this inherent uncertainty, economic calculations are subject to often wide margins of error which undermines their credibility with the general public. Furthermore, opponents of an investment can easily come up with projections of their own, opening up discussions about which of several counter-factuals are the more plausible, which are not easily settled.

Consider the case of an investment by a private foreign water company in a developing country. Economists will compare the likely costs and benefits and set these against the likely costs and benefits of not undertaking the investment. This is a rather complicated, abstract, mental process. Suppose that consumers are being charged ten cents per liter, and are being billed once a month. Economists will point out that poorer consumers living in slums used to have to buy water from a truck and pay fifty cents a liter; hence the new water scheme constitutes a major saving (of time as well as money). Opponents of the project will have an easy time, however, meeting slum dwellers on the day they receive their monthly bill from the water company. The monthly bill will seem formidable against the day’s earnings, and CNN will be able to film very worried faces.
In short, costs are far more photogenic than benefits.

The same argument applies to whole national economies. Over the past quarter of a century, for example, economic growth of the sub-Saharan African countries barely kept pace with population growth. Yet a number of the region’s countries have undertaken some policy reforms (“stabilization”, “structural adjustment”) in line with the famous (or infamous) “Washington Consensus”. The fact that standards of living did not improve visibly (and in some countries declined) was taken by opponents of liberalization/globalization as evidence not only that the medicine didn’t work, but that it poisoned the patient. Structural adjustment and stabilization caused economic decline. Economists and reformers think, correctly, that this is a case of, post hoc, ergo propter hoc, but demonstrating this to the general public is almost impossible. Such a demonstration requires a counter-factual, i.e. a reconstruction of what most likely would have happened, had the African countries not undertaken stabilization and adjustment measures. Faced with posters showing IMF officials having lunch at a restaurant next to a picture of a starving African child, counter-factual explanations pack very little punch.

And yet, the ultimate non-globalizing country, North Korea, is hardly anybody’s idea of economic success
I now return to the list of losers. As an economist, I would say the following:

workers in the industrial countries: as noted, those who lost jobs should blame technological change rather than globalization. What is needed, on the part of governments, is not a brake on imports or on outflows of investment, but rather safety nets which make it easier for those who lost their jobs to find new ones. Trade restrictions or restrictions on business relocation abroad will only depress the general standard of living by making things more costly for consumers (and firms) than they would be otherwise;

immigrants tend to respond to labor shortages, taking jobs which native Norwegians, Belgians, Italians, etc. do not want or cannot fill. Immigration is making net positive contributions to the host countries’ economies. Because they tend to be younger than the native population, they are also supporting, rather than undermining, social security and other public transfer systems. Japan, which allows few immigrants, will experience severe problems, as the population aged 20-59 is expected to shrink between now and 2050. In contrast, in the United States that age group is expected to increase by 30 percent owing largely to liberal immigration policy.

workers in the poorer countries: conditions in “sweatshops” should be compared not to labor conditions in the US, Canada or Europe, but to the job choices available to the women and men of the developing countries. To them, finding a job with Nike beats working in the fields (and according to evidence also beats working for a local firm). The real losers are those whose governments do not give their populations a fighting chance of benefiting from greater inclusion in the world economy (e.g. North Korea, Myanmar, and an unfortunately substantial number of developing and transition countries)
Child labor is a result of poverty. Not so long ago, children worked on the farms, in coal mines and in textile mills in Europe and in the US, because families needed the extra income. The situation in most developing countries is the same today as it was then in the industrial countries. To be realistic, legislation will likely only curb child labor when better jobs are available to their parents, more schools exist, etc., in short, when overall conditions improve.

The causal connection between “globalization” and depletion of fauna and flora is a subject of debate. I would argue that foreign firms tend to behave better environmentally (and socially) than do local firms in the developing countries, because they face much harsher reputational sanctions (e.g. the Nestlé boycott). History suggests that, as with child labor, people are willing and able to devote more resources to protecting the environment with increasing affluence. Coal-burning in London, the main source of “pea-soup fog” was only abolished in the 1950s and 1960s, as the electorate became affluent enough.
Governments and firms should do whatever they can to avoid expulsions of indigenous (or any other) people from their lands, and where this happens nevertheless, compensate these persons as adequately as possible. Yet here again, the cause of hardship has more to do with technological progress than with trade and capital movement liberalization.

As for my compatriots, who complain about being invaded by American products and movies, I ask why they are bringing their children to Macdonald’s in droves; I also ask why they are not watching more French TV programs (the answer: because most are incredibly boring). Seriously, consumers are not compelled to consume particular goods and services. Mr. Bové should be tolerant of other people’s freedoms (and property rights).

Importantly, globalization has meant more, not less, competition among corporations. As John Kay put it (op. cit), “The principal victims of globalization are companies, activities and individuals in rich countries with strong historic positions but no competitive advantages: US car workers; Bethlehem Steel; Sabena”. This applies as well, of course, to developing country companies, including notably state-owned enterprises.

Countries experiencing financial crises brought about by “excessive” inflows of capital (or sudden capital flight) generally suffer from unresolved problems to do with their macroeconomic management and institutional underpinnings (e.g. ineffectual banking supervision). Blaming globalization for the crises and turning their backs on the world economy will not help to solve the underlying problems, but will surely slow down long-term growth.

Last but certainly not least, globalization has not undermined government power. As David Henderson puts it, “it is a mistake to suppose… that a liberal trade and payments régime prevents the exercise of effective sovereignty” (op. cit., p. 64). Elsewhere, he cites the example of New Zealand, a small economy which has gone through far-reaching liberalization. These measures “have not eroded the national sovereignty of New Zealand, nor have they done much to restrict the freedom of action of New Zealand governments in anything that matters to them… More broadly, and as in other countries in the world except for those where no effective authority exists, the government of New Zealand retains the power to run its own affairs in relation to such matters as defense, foreign policy, constitutional arrangements, the electoral system and voting rights, residence, citizenship, the legal system, cultural concerns, education, public provision for health, pensions and welfare, and the status of the national language or languages. Here as elsewhere, …[multinational enterprises] have neither the wish to be involved with these issues nor the power to influence them significantly….” (“Misguided Virtue”, New Zealand Business Roundtable, Wellington, June 2001, pp. 56-57).

Distribution and Poverty

Poverty is diminished in two ways: (1) Increasing income overall and/or (2) shifting part of a constant income to a poorer sector of the population. Stepping back to consider a broader canvas, the impact of globalization on income and inequality is a subject which has spawned whole libraries of studies. It is an area where not only is there little or no consensus among disciplines, but where economists themselves have widely differing views. There are many dimensions to poverty besides low income, in line with old French adage: “L’argent ne fait pas le bonheur” (see Carol Graham and Stefano Pettinato, “Hardship and Happiness” , Brookings, 2002), and data about success or failure in these dimensions leave much to be desired. For instance, the data about what happens to individuals over time, or how one generation’s standard of living compares to that of their parents or their children, are extremely scarce, when these questions are clearly of the utmost relevance.
So, what can one say with a fair degree of certainty about growth and inequality in developing countries ? Most importantly to me, life expectancy at birth, the most basic and robust of all social indicators, has increased very considerably and the gap between the old industrial and the developing countries has narrowed. In South Asia, one of the world’s largest concentrations of poor people, average life expectancy at birth more than doubled from only 30 years just before World War II to 63 years today. During the past half-century life expectancy in China rose from 48 years to 70. In Latin America life expectancy increased from 40 years prior to the war to 70 years today. Even in Sub-Saharan Africa, the least developed region, life expectancy increased from 30 years before World War II to about 50 years, but then declined to 47 years, owing to the AIDS pandemic and other diseases.. In comparison, life expectancy in the old industrial countries increased from 56 years prior to World War II to 78 today. In other words in the course of two generations the gap between the industrial and the developing regions narrowed substantially everywhere with the dramatic exception of Sub-Saharan Africa. So overall, poverty has diminished when defined by health of population and life expectancy, as well as by income [source for the numbers: World Development Indicators, 2001]. As Amartya Sen and others emphasize, poverty is about more than income. But income is central; practically all other dimensions of human misery are, or can be, made more bearable through money.

But what happened to inequality ? It is striking how little income distribution within countries seems to have changed during the last fifty years, including recent “globalization years”. This is depressing because in most developing countries, income is distributed very unequally. Looking at the developing world as a whole, many studies show increasing divergence between the growth paths of countries. Focusing on the developing world’s more than 150 countries, one finds that most experienced little or only modest per capita income growth over the past decade or two, but that things improved in quite a number, and in some, remarkably fast. So, studies which consider numbers of countries in the same way as the United Nations: one country, one vote, show increasing divergence (“the rich get richer and the poor become poorer” ) , This is not surprising since about one-third of all developing countries are in sub-Saharan Africa, a region which has suffered from extremely slow growth. Other studies consider population numbers rather than numbers of countries. By doing so, what stares one in the face is the fact that the economies of China and India (as well as those of some other heavily-populated countries) grew at high rates during the past twenty years. Together, t they account for well over 2 billion out of today’s 5 billion inhabitants of the developing world. The fact that these large populations experienced much faster growth than the rest inevitably translates into increasing inequality over time. What is the solution ? surely not artificially to slow down growth in India and China, even though this would, ceteris paribus, improve overall income distribution.

Concluding thoughts

In conclusion, when we contemplate the nearly 200 nation states what is perhaps most striking is the impression of extraordinary variety: variety of cultures, of attitudes, of social organization, and variety of historical trajectories, including very different social and economic experiences. Then, different disciplines approach these countries’ development issues from very different directions. It is therefore, I think, unreasonable to expect much consensus among participants and observers, especially since each and every development issue has political dimensions. One should not even expect much consensus about what we like to call “the facts”, since these reflect largely various choices of data, most of which are of poor statistical quality anyway and cannot easily be compared across countries.

I can only speak as an economist, and accept the fact that in all probability few professionals of other disciplines (and most certainly not most economists either) will agree with me. When I look back I see a few common threads. Above all, I see that living conditions have improved considerably for most inhabitants of the developing world. Most importantly, everywhere, except in some countries of the former Soviet Union, people’s lives are longer than did their grand-parents and great-grand-parents. Child mortality declined in every developing region of the world. Poorer persons benefited as much as the rest of society from economic growth, where it occurred. How do these trends relate to globalization ? I am happy to have run out of time, so that I may leave that topic for others to address. I would only suggest in closing that we ask people of the poorest countries themselves whether they want globalization to slow down or to stop. It is striking how few of them participated in the many anti-globalization demonstrations of the past few years. I am sure that most of the would answer in the negative.

In conclusion, here are two sets of quotes from developing country officials. The first is from the President of Bolivia, Jorge Quiroga (Washington Post, December 5, 2001): “As we are trying to push democracy, we should also try to spread freedom in commerce and trade”, “The fight for freedom and the fight against terrorism has two facets: terrorists target not only our freedom of democracy but also freedom of trade… The more products, the more freedom of trade, the more globalization, the better”, and “The best sustainable long-term development is access to markets”. The second is Uganda’s Minister for General Duties, Mondo Kagonyera, who stated to opponents of a major hydroelectric project, which had been carefully screened by the World Bank: “The champions of environmental conservation should realize that the major problem of conservation in Uganda is poverty” (Africa News Service, December 12,2001).

___________________________________________________________________________________________________________
(*) Guy Pfeffermann is Chief Economist of the World Bank's International Finance Corporation(IFC), Director of IFC's Economics Department and adjunct professor at Johns Hopkins University's School of Advanced International Studies.