Globalisation has been 'a huge plus for humanity': Tharman

Deputy Prime Minister Tharman Shanmugaratnam speaks at the International Monetary Fund seminar in Washington.
Deputy Prime Minister Tharman Shanmugaratnam speaks at the International Monetary Fund seminar in Washington. PHOTO: IMF

Tharman points to failures in domestic policy in countering inequality in some countries

Globalisation has been a big plus for many countries, said Deputy Prime Minister Tharman Shanmugaratnam, countering critics who have made it fashionable to divert attention from failures in domestic policies by hitting out at globalisation.

Speaking at a seminar on inequality on the sidelines of the International Monetary Fund-World Bank annual meetings, Mr Tharman, who is also Coordinating Minister for Economic and Social Policies, stressed that globalisation has been a positive force in the world even though it has recently become the "new fashion" to blame it for all manner of ills.

"It (globalisation) has been a huge plus for humanity. It has been the way in which a large group of people living in emerging countries have begun to converge on the achievements of advanced countries and that process is still continuing," he said.

"Far too much is being made of the impact of globalisation on equality, on social cohesion, on a variety of things, and not enough has been made about domestic policy failure."

He noted, for instance, that different countries have had vastly differing experiences with globalisation.

While a recent study showed that two-thirds of workers in 25 developed countries have seen their wages stagnate over the past decade, he said there were many examples of countries that were coping far better.

"There is a difference between the ways Switzerland, the Nordic countries, Australia and the Singapores of the world have dealt with globalisation and with technological change."

 

DPM Tharman noted that Sweden, for instance, was one of the countries which have fared better in gaining public acceptance of the benefits of globalisation, adding: "It has had significant income growth for the median as well as the lower income groups over the last 15 years.

"If you look at it within Asia, some of us have sustained median income growth and others haven't. If you look at it among the developing countries, China has been an exception; not many countries have begun the convergence path.

"So there are big differences between countries, and it's got nothing to do with globalisation or technological change. It's about the use and misuse of domestic policy."

It was an argument made several times on Friday by other leaders and financial experts gathered for the IMF-World Bank meetings.

At a forum organised by the Bretton Woods Committee that Mr Tharman also attended, Organisation for Economic Cooperation and Development secretary-general Jose Angel Gurria said globalisation was "like oxygen". "Don't blame globalisation, please," he said.

On what governments around the world could do, Mr Tharman proposed three areas where domestic policy could make a difference: reducing the differences in quality among schools, helping the localised areas most affected by globalisation to regenerate themselves, and helping displaced workers get back into the labour force.

"We don't have enough activism to put a whole load of investment back into the labour force at different points of people's careers.

"It's not good enough to frontload investment for the first 18 or 22 years of a person's life. You've got to reinvest in people throughout their working lives," he said.

Separately, the Monetary Authority of Singapore yesterday said the Republic has maintained its US$4 billion (S$5.5 billion) loan commitment to the IMF until the end of 2020, as part of the US$340 billion committed by 25 member countries of the fund to safeguard global economic and financial stability during the period. The initial loan commitment was made in April 2012.

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A version of this article appeared in the print edition of The Sunday Times on October 09, 2016, with the headline 'Globalisation has been 'a huge plus for humanity''. Print Edition | Subscribe