“The world is small”; “we live in a global village”; these are common phrases used by many people, but many do not truly understand the implications of these statements. 

“Our modern era is marked by the complex phenomenon of economic and financial globalisation, a process that progressively integrates national economies at the level of the exchange of goods and services and of financial transactions.” 

There are many persons who shop on-line via the internet.  A product’s unavailability in Trinidad and Tobago does not mean a person cannot enjoy it.  Some persons purchase shares, stocks and bonds from other countries, and if this is not being done directly by the individual, the local financial institutions in which we invest do it for us. 

“In this process, an ever growing number of those involved in the economic sector is prompted to adopt a more global perspective concerning the choices that they must make with regard to future growth and profits. 

The new perspective of global society does not simply consist in the presence of economic and financial bonds between national forces at work in different countries, which have moreover always been present, but in the pervasiveness and the absolutely unprecedented nature of the system of relations that is developing. 

The role of financial markets is becoming ever more decisive and central.  Following the liberalisation of capital exchange and circulation, these market dimensions have increased enormously and with incredible speed, to the point that agents can “in real time,” transfer large quantities of capital from one part of the globe to another. 

This is a multi-faceted reality that is difficult to decipher, since it expands at different levels and is in continuous evolution along paths that cannot easily be predicted.” 

Globalisation gives rise to new hopes while at the same time it poses troubling questions.  Globalisation is able to produce potentially beneficial effects for the whole of humanity. 

In the wake of dizzying developments in the field of telecommunications, the growth of the system of economic and financial relations has brought about simultaneously a significant reduction in the costs of communications and new communication technologies, and has accelerated the process by which commercial trade and financial transactions are expanding worldwide.

 In other words, the two phenomena of economic-financial globalisation and technological progress have mutually strengthened each other, making the whole process of this present phase of transition extremely rapid.”

“In analysing the present context, besides identifying the opportunities now opening up in the era of the global economy, one also comes to see the risks connected with the new dimensions of commercial and financial relations.

 In fact, there are indications aplenty that point to a trend of increasing inequalities, both between advanced countries and developing countries, and within industrialised countries.  The growing economic wealth made possible by the processes described above is accompanied by an increase in relative poverty.

“Looking after the common good means making use of the new opportunities for the redistribution of wealth among the different areas of the planet, to the benefit of the under-privileged that until now have been excluded or cast to the sidelines of social and economic progress.

 The challenge, in short is to ensure a globalisation in solidarity, a globalisation without marginalisation.  This technological progress itself risks being unfairly distributed among countries.  In fact, technological innovations can penetrate and spread within a specific community only if the potential beneficiaries have a minimum level of knowledge and financial resources.

 It is evident that, because of the great disparities between countries regarding access to technical and scientific knowledge and to the most recent products of technology, the process of globalization ends up increasing rather than decreasing the inequalities between countries in terms of economic and social development. 

Given the nature of the current dynamics, the free circulation of capital is not of itself sufficient to close the gap between developing countries and the more advanced countries.”

Countries do not face a choice about whether to take part in the globalised economy: how then can we make Globalisation work for the poor?  Reaping the benefits of globalisation depends on individuals, communities and firms responding to the opportunities for employment and trade in the global market place. 

Action is however required at national and international levels to put in place policies that will enable poor citizens and poor countries to benefit from globalisation. 

Some key actions include:

1. Promoting effective governments and efficient markets - governments and the international community need to establish sound economic frameworks to preserve political stability, and promote the economic participation of the poor.
2. Investing in people – good health and education are necessary for full participation in economic life.  There must also be a transfer of skills and knowledge to the poor and poor countries – those with skills and knowledge must share their expertise.
3. Socially responsible private sector - the private sector is the engine for many of the gains from globalisation.  Socially responsible business practices as embodied in international standards should be adopted.
4. Using development assistance (previously referred to as aid) more effectively – ensure that greater resources are devoted to those low-income countries where the impact will be most effective.

Next week we look at the Trade and economic relations. 

For persons interested in purchasing the Compendium of the Social Doctrine of the Church, please contact the Justice Desk, Archbishop’s House at 622-6680.