Globalization and the Commonwealth

Abstract

Globalization—the spread of the open and competitive economic system—is accelerating in the post‐Cold War world. Globalization tends to polarize economic performance. Successful economies do even better—and Commonwealth members are among the leaders. But unsuccessful ones fall further behind. Though Commonwealth countries are well represented in regional groupings, their distribution is unbalanced, so that Commonwealth interests are best served by ‘open regionalism’ and strong global institutions. These institutions—the World Trade Organization (WTO), International Monetary Fund (IMF), World Bank—are crucial to success in a globalized world. The Commonwealth can shape them and help its members to get the most out of them. The Singapore ministerial meeting has boosted the WTO, especially in services, which can offer special opportunities for small remote Commonwealth countries. But the WTO has not yet done enough for the poorest. Private investment flows to developing countries have doubled in four years, but their distribution is uneven. International rules for investment are developing piecemeal. The IMF and World Bank are jointly engaged in debt relief, following up Commonwealth initiatives for the poorest. IMF conditionality is being tightened for all countries—many prefer to anticipate it. World economic prospects are thus improving, notably in Africa. If the Commonwealth should adopt common positions—on debt relief and trade opportunities for the poorest, on open regionalism and a new round of WTO negotiations—these would carry weight. The Commonwealth can do more for its members than the global institutions in some respects. It works by direct exchange of experience, helped by common traditions in government. It can cover the politics of economic reform and has a strong non‐governmental component. It is accessible to its smallest members. It works by persuasion and example, not by compulsion.