{
  "title": "Working for a Better Globalization -- Remarks by Horst Köhler, Managing Director, IMF",
  "publication": "IMF News, January 28, 2002",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/28/04/53/sp012802",
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  "summary": "Given at the Conference on Humanizing the Global Economy, Washington DC",
  "publishDate": "2002-01-28",
  "sections": [
    {
      "heading": "Overview and context",
      "content": "- Delivered at the Conference on Humanizing the Global Economy, Washington, DC, January 28, 2002.\n- Emphasizes that globalization is ongoing, rooted in human aspirations and political choices for openness and democracy.\n- Warns against reversing globalization; calls instead to work for \"a better globalization\" that is more inclusive and balances risks and benefits."
    },
    {
      "heading": "Benefits and challenges of globalization",
      "content": "- Positive outcomes highlighted:\n  - \"Global per capita income has more than tripled.\"\n  - Major improvements in literacy and life expectancy over the past 50 years.\n  - Developing nations that include \"Brazil, Chile, China, India, Korea, and Mexico\" doubled their share in world trade and raised per capita incomes; these countries are cited as demonstrating the advantages of integration.\n  - Half of the world's population lives in developing nations that benefited from integration.\n- Challenges and disparities:\n  - \"Nearly three billion people who are trying to survive on less than $2 a day\" remain marginalized.\n  - \"The disparities between the world's richest and poorest nations are wider than ever.\"\n  - Global downturn after 2001 deepened risks and made life more difficult for vulnerable countries."
    },
    {
      "heading": "Principles for shaping globalization",
      "content": "- Trust that all countries' voices will be heard and interests recognized.\n- Trust that countries will live up to responsibilities and consider cross-border effects.\n- Respect for national and local responsibilities, religions, cultures, and traditions; build global action on inclusion, broad participation, and local initiative.\n- A global economy requires global ethics: respect for human rights, personal and social responsibility, sharing with those who have less, and protection of the vulnerable."
    },
    {
      "heading": "Role and reform of Bretton Woods institutions (IMF and World Bank)",
      "content": "- Institutional roles:\n  - World Bank: \"long-term investment projects, institution-building, and assistance in dealing with social, environmental, and poverty issues.\"\n  - IMF: \"functioning of the international monetary system, and on promoting sound macroeconomic policies as a precondition for sustained growth.\"\n- IMF priorities and actions:\n  - Support countries in taking advantage of private capital flows while minimizing volatility and crisis risk.\n  - Increased openness and transparency compared to the past; promotion of transparency in member countries.\n  - Led a \"conceptual sea-change\" using standards and codes plus annual surveillance to create a level playing field.\n  - Joint IMF-World Bank Financial Sector Assessment Program (FSAP) central to strengthening domestic financial sectors, combating money laundering, and thwarting financing of terrorism.\n  - Steps to streamline IMF conditionality to allow national ownership of reform programs; conditionality remains essential but should not be lecturing or dominating.\n  - IMF seeks to \"listen and learn\" and values religious and civil society organizations."
    },
    {
      "heading": "Lessons from crises and the Argentine experience",
      "content": "- 2001 was \"a very difficult year\"; the global economy weakened and September 11 deepened risks.\n- Argentina:\n  - IMF augmented financial support \"twice in less than 12 months.\"\n  - Political disunity in Argentina undermined implementation of chosen strategy.\n  - IMF stands ready for dialogue, technical assistance, and financial support \"within our mandate.\"\n- Lessons for IMF:\n  - Concentrate more on crisis prevention and generate preemptive policy action.\n  - Establish better ground rules for roles of IMF and private sector in crises; suggested a \"Sovereign Debt Restructuring Mechanism\" akin to a Chapter 11 for countries with unsustainable debt.\n  - Reform and structural change must be broad, well grounded, and socially equitable.\n  - Countries opening to the global economy need domestic institutional capacity and generally should adhere to a flexible exchange rate regime.\n  - Need for enhanced cooperation with the World Bank and regional development banks on institution-building and social protection."
    },
    {
      "heading": "Poverty reduction, debt relief, aid, and trade",
      "content": "- Support for UN Millennium Development Goals for 2015; goals described as \"ambitious\" but achievable.\n- Emphasis on \"self help\" by poor countries: establishing peace, rule of law, good governance, investment in human capital and infrastructure, policies that encourage private initiative and integration into the global marketplace.\n- Poverty Reduction Strategy Papers (PRSP):\n  - IMF and World Bank promoted a country-led process.\n  - International Conference on Poverty Reduction Strategies assessed two years of PRSP experience; PRSP seen as promising but with tensions and administrative burdens.\n  - Executive Board review of PRSP process and the IMF's Poverty Reduction and Growth Facility scheduled for March (year implied by context).\n  - Calls for deeper analysis of root causes of poverty and increased technical assistance to build institutional capacities.\n- Debt relief:\n  - Enhanced HIPC Initiative has \"already provided $36 billion of debt relief to 24 poor countries.\"\n  - Debt relief is valuable but \"no panacea\"; institutional foundations for borrowing and lending safely are necessary.\n- Official development assistance (ODA):\n  - UN target: \"0.7 percent of GNP\" for ODA.\n  - Current average in OECD countries: \"0.22 percent of GNP.\"\n  - Shortfall: \"over $100 billion a year in aid flows.\"\n  - United States ODA: \"0.10 percent of GNP.\"\n  - Meeting the UN target within the next decade could generate, \"in the first year alone,\" enough new resources to meet the estimated \"$10 billion annual requirement for a new global effort at HIV/AIDS prevention and treatment.\"\n- Trade liberalization:\n  - Described as \"the best form of help for self-help\"; advocates opening markets and phasing out trade-distorting subsidies where developing countries have comparative advantage.\n  - Examples of subsidies harming developing-country producers:\n    - United States: \"price support payments for cotton cost more than $2 billion a year\"; subsidized US production has taken \"over 30 percent of world cotton exports.\"\n    - European Union: governments spend \"over $2 billion a year to buy up excess domestic sugar production,\" leading to dumping on world markets.\n    - Japan: agricultural subsidies lead to rice prices \"8 times as high as the world market price.\"\n  - Calls on the United States, Japan, and the European Union to phase out unsustainable subsidies."
    },
    {
      "heading": "Policy recommendations and calls to action",
      "content": "- For governments and international community:\n  - Do not attempt to reverse globalization; instead work to make it more inclusive and equitable.\n  - Restore the momentum of global growth—industrial economies should do everything in their power to that end.\n  - Increase aid to meet the UN target of \"0.7 percent of GNP.\"\n  - Phase out trade-distorting subsidies in agriculture, processed foods, textiles and clothing, and light manufactures.\n  - Support comprehensive and coherent plans in crisis countries and cooperate closely with affected countries.\n  - Strengthen crisis prevention, clarify IMF and private sector roles, and consider a Sovereign Debt Restructuring Mechanism.\n  - Promote institution-building, social protection, and flexible exchange rate regimes where appropriate.\n- For civil society and faith-based organizations:\n  - Continue advocacy and dialogue, press for increased aid, better access to trade, and more rapid structural change in advanced economies.\n  - Help mobilize support for poverty reduction, debt relief, and effective use of resources.\n- For the IMF and World Bank:\n  - Continue transparency, standards and codes, FSAP work, and streamlined conditionality that allows national ownership.\n  - Enhance technical assistance to build institutional capacity in developing countries.\n\nSource: Working for a Better Globalization — Remarks by Horst Köhler, Managing Director, IMF (January 28, 2002).\n\n---\n\n\n References\n\n- Argentina and the IMF\n- United States and the IMF\n- Poverty Reduction Strategy Papers -- A Factsheet\n- Speeches\n- Horst Köhler\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/28/04/53/sp012802"
    }
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    "Published: January 28, 2002",
    "Delivered at the Conference on Humanizing the Global Economy, Washington, DC, January 28, 2002.",
    "Emphasizes that globalization is ongoing, rooted in human aspirations and political choices for openness and democracy.",
    "Warns against reversing globalization; calls instead to work for \"a better globalization\" that is more inclusive and balances risks and benefits.",
    "Positive outcomes highlighted:",
    "Challenges and disparities:",
    "Trust that all countries' voices will be heard and interests recognized.",
    "Trust that countries will live up to responsibilities and consider cross-border effects.",
    "Respect for national and local responsibilities, religions, cultures, and traditions; build global action on inclusion, broad participation, and local initiative.",
    "A global economy requires global ethics: respect for human rights, personal and social responsibility, sharing with those who have less, and protection of the vulnerable.",
    "Institutional roles:",
    "IMF priorities and actions:",
    "2001 was \"a very difficult year\"; the global economy weakened and September 11 deepened risks.",
    "Argentina:",
    "Lessons for IMF:",
    "Support for UN Millennium Development Goals for 2015; goals described as \"ambitious\" but achievable.",
    "Emphasis on \"self help\" by poor countries: establishing peace, rule of law, good governance, investment in human capital and infrastructure, policies that encourage private initiative and integration into the global marketplace.",
    "Poverty Reduction Strategy Papers (PRSP):",
    "Debt relief:",
    "Official development assistance (ODA):",
    "Trade liberalization:",
    "For governments and international community:",
    "For civil society and faith-based organizations:",
    "For the IMF and World Bank:",
    "[Argentina and the IMF](http://www.imf.org/external/country/ARG/index.htm)",
    "[United States and the IMF](http://www.imf.org/external/country/USA/index.htm)",
    "[Poverty Reduction Strategy Papers -- A Factsheet](https://www.imf.org/en/about)",
    "[Speeches](https://www.imf.org/en/news/searchnews)",
    "[Horst Köhler](https://www.imf.org/external/np/omd/bios/hk.htm)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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