Trade and Globalization

[Download the full paper here].

The recent deliberations in Washington about the fiscal cliff have triggered a national debate in the United States about the nature, extent and future sustainability of key elements of the U.S. social safety net: Social Security, Medicare, Medicaid, support for education, the unemployed and the poor.

Economic interdependence among nations, Americans have long believed, is the surest and safest path both to a wide prosperity and a perpetual peace. If all nations jointly depend together on one vast "global" factory for many basic goods, so our thinking holds, no one state will ever dare disrupt the functioning of this "communalized" system.

As the Great Recession rumbles on, hitting the old, very rich countries of Europe and North America far harder than the new, somewhat rich economies of Asia and Latin America, the traditional order of global financial governance is looking increasingly frayed. At the Group of 20 summit in Los Cabos, Mexico, on June 18-19, world leaders are expected to issue bold statements about their commitment to reshaping institutions such as the World Bank and the International Monetary Fund to reflect shifts in the economic balance of power.

It’s a cliché that the Pacific Ocean is displacing the Atlantic, that China will replace America at the top of the world’s hierarchy of power, and the East will surpass the West. The cliché is also wrong. The multipolar world we are entering will have no single winner, and the three-pillared West of the European Union, North America, and Latin America remains a triangular zone of peace and foundation of global stability.

Perhaps it's the combined Twitter power of the Two Bills (Gates and Easterly), but working in development is hot, and not just for their 5.9 million followers. I'm not kidding: The website GradSchools.com lists 204 master's programs in international development, meant to prepare students for the glamorous life of managing technical assistance to water and sanitation departments in Bangladesh or dealing with the logistics of emergency food programs in Somalia.

Washington, D.C. --  American policymakers are beginning to catch on: The domestic manufacturing industry is modernizing, and as a result transforming the economy.

Afshin Molavi and Sam Sherraden discuss The tensions surrounding Iran’s nuclear development program, the state of manufacturing jobs in the US, and how China’s growing influence is affecting economic and political relations around the world. Pamela Chan hosts.

At the last World Economic Roundtable, Michael Kumhof, Deputy Division Chief of the Modeling Division of the International Monetary Fund, and Raymond Torres, Director of the International Institute for Labour Studies of the International Labour Organization, came to discuss the relationship between inequality and financial crises. 

This post originally appeared on the SPINNAKER Network.

Two weeks ago, President Obama announced Congress’s approval of three long-awaited trade deals with Colombia, Panama, and South Korea. They have been both hailed and rejected by the usual suspects, but the debate has centered largely on employment and labor issues. However, there’s also something to say about what these deals mean for financial inclusion, specifically with regards to mobilizing savings for the poor.