Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 In the 18 th and 19 th centuries the process of globalization received a series of boosts that collapsed distances and lowered transport costs Steam Engine Steam Engine Steam ship Steam ship Airplane Airplane

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 And also collapsing time Telegraph Telegraph Telephone Telephone Radio Radio Television Television

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, ½ Hours In 1858, the first trans-Atlantic telegram from Queen Victoria to American President James Buchanan took 16 ½ hours to arrive.

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 The world was soon wired

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 Since then satellites have shrunk the world further

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 The easy availability of technology has shrunk time and cut cost 3-minute call from New York To London 3-minute call from New York To London 1930$300 (in today’s prices) 2003$0.08

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 The population of internet users worldwide has rocketed 1 Billion by 2005 More than 633 million users by late 2003 Fewer than 20 million users in late 1995 Source: Human Development Report 2001, Nua Internet Survey Internet Café, Hanoi

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 At a plummeting cost A data transfer costing $150,000 in 1970 costs $0.12 in 1999 Source: Human Development Report 2001

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 Freight costs have fallen 70 percent between 1920 and 1990

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 And so have tariff barriers – thanks to multilateral trade arrangements like GATT, WTO and NAFTA

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 Production of components in off-shore locations has reduced prices and shifted jobs across borders The Falling Price of TV

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, ,000 Multinational Corporations 63,000 Multinational Corporations 23,000 NGO’s 23,000 NGO’s UN Agencies UN Agencies WTO WTO IMF IMF Billions of consumers and tourists Billions of consumers and tourists

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 Global corporations, intent on finding the best markets, have taken over from the traders of the past Source: Global Inc. A Profile of Multinational Corporations

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 Daily worldwide transactions worth a trillion dollars forms a stack 20 times higher than Mt. Everest Source: Anthony Giddens,’Runaway World : How Globalization is Reshaping Our Lives’

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 People (billion passenger km) Billions of people travel around the globe, spending money, spreading ideas and information

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 In some ways, there have been real and tangible benefits to this reconnecting of humanity Call Center in India

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 Free trade and open economies have spread prosperity Beijing, 2003

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 The march of democracy has made an increasing number of governments accountable to their citizens and fostered awareness of human rights Source: Human Development Report, 2002

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 The difference between globalization then and now lies in the speed and volume of transfers and in the changing power balance Chili pepper took decades, perhaps a hundred years, to catch on from Korea to Sri Lanka. It was voluntarily accepted without any mighty corporation pushing its sale Chili pepper took decades, perhaps a hundred years, to catch on from Korea to Sri Lanka. It was voluntarily accepted without any mighty corporation pushing its sale

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 McDonalds, conversely, has spread all over Asia in just over two decades

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 But trade is not on a level playing field. Rich nations’ farm subsidies hurt poor farmers in the developing world US subsidizes 25,000 cotton growers with $2 billion subsidy US subsidizes 25,000 cotton growers with $2 billion subsidy In Africa poor cotton farmers lose $250 million in exports each year In Africa poor cotton farmers lose $250 million in exports each year

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 Subsidies and Survival $2.50 subsidy a day for a cow in Europe $2.50 subsidy a day for a cow in Europe Nearly half of the world’s population survive on less than $2 a day

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 Another major difference is the growing awareness of global interdependence as well as of the yawning gaps 2.8 billion people live on less than $2 a day. 2.8 billion people live on less than $2 a day. They have no electricity, no phone They have no electricity, no phone The richest 1% of the world’s people receive as much income each year as the poorest 57%. The richest 1% of the world’s people receive as much income each year as the poorest 57%.

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 Growth has come with inequality

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 The idea of protesting inequality has also taken on global proportions, as evidenced by the demonstrations that take place at every meeting of major world leaders.

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 The cost of global reconnection has been steep. The risks of HIV/AIDS, terrorism, nuclear war, environmental disaster, and computer viruses have all grown with the rapid movement of people, goods and information. Chernobyl, April 26,1986

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 SARS – A virus flying on a jet plane November 2002 China February 2003 Hong Kong April 2003 The World

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 Spanish Flu killed 25 million in a year, though the mortality rate was 2.5 percent Spanish Flu then, SARS now SARS spread to 32 countries in 5 months and killed 812, though the mortality rate was 12 percent

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 Intensified globalization made the difference Tourism and passenger jets transported the virus faster than steamboats and trains in 1918 Tourism and passenger jets transported the virus faster than steamboats and trains in 1918 World-wide network of health workers quickly identified SARS and sequenced the genome of the virus World-wide network of health workers quickly identified SARS and sequenced the genome of the virus Most importantly, a global institution – WHO - was able to order quarantine of affected areas Most importantly, a global institution – WHO - was able to order quarantine of affected areas

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 Computer viruses are especially threatening, because the whole world is wired and dependent upon electronic communication

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 Al Qaeda and other terrorist groups pose new challenges to the free movement of goods and people that globalization represents

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 Challenges notwithstanding, the drive to reconnect people all over the world will be quite hard to reverse The reconnection between developed and developing nations will turn the light on in many places but will produce sparks and blackouts as well

Y ALE C ENTER FOR THE S TUDY OF G LOBALIZATION © Nayan Chanda, 2003 The globalized world is like a small boat We cannot “afford to ignore the condition of our fellow passengers on this little boat. If they are sick, all of us risk infection. And if they are angry, all of us can easily get hurt.” - Kofi Annan - Kofi Annan Secretary General of the United Nations