excerpts from Robert Rubin's talk on "Decision-Making on Globalization and Poverty Amidst Today's Global Complexities"

"I believe that all times are complex and uncertain," he said, "but that some periods are especially so. And I have believed for several years that this is one of those periods. The attacks of Sept. 11th, though a terrible personal tragedy for so many, didn't in my opinion change that complexity and uncertainty." He noted that they did, however, increase public awareness of the threat of terrorism, the spread of weapons of mass destruction, global poverty, failed states, and, most important, "the vastly tighter interconnection of our entire globe."

The thrust of Rubin's talk was twofold, encompassing first the international scene, where he believes industrialized nations must both help to combat poverty and broaden global participation and growth, and second the domestic arena, in which, he maintained, public debate and criticism are not only healthy but necessary. "Such debate, even in times of stress," he said, "is one of the great strengths of democracy" - but he emphasized that in a situation so fraught with complexities and ambiguities, discussion does not mean lack of decisiveness or lack of commitment to the war on terrorism.

Rubin pointed out that though globalization has, on balance, contributed greatly to economic well-being, it has also created social, economic, and cultural dislocations for many millions of people. Though the absolute number of those living in poverty worldwide has fallen, he said, it is still vastly too high, and the imbalance often foments resentment, anger, hopelessness, and despair, which may create environments that are hospitable to terrorism. It is well known that globalization, poverty, terrorism and geopolitical instability are "inextricably intertwined," he added, but the significance of their correlation has "not really taken hold" and "become truly integral to our thinking."

Once the risks are taken fully into account, he said, "One thing seems to me absolutely clear: A gated-community approach to global poverty simply will not work for affluent countries" - partly because the very tools and strategies of globalization can be used for ill as well as good. "A parallel agenda to globalization is needed to address a whole range of purposes," he said, "such as education for all, health care for the poor, a reasonable social-safety net, and redeployment programs for those dislocated by change." This would not only have a substantive impact, he said, but also could help convince industrialized nations that trade liberalization and market-based economics are in their best interest - which would in turn give globalization long-term viability.

The glitch is that policies depend on politics. "Industrial nations are still subject to intense protectionist political pressure," Rubin said. Even if it fulfills the pledge made during the United Nations International Conference on Financing Development held recently in Monterrey, Mexico, the United States, according to Rubin, "will be contributing something less than 1,500ths of 1 percent of our gross domestic product to foreign assistance." Add to that the European Union's 3,500ths of 1 percent, along with the contributions of other industrialized nations, and "total aid will still fall far short of what is needed to make adequate progress in combating poverty."

Rubin compared today's numbers with those of the Marshall Plan, which was first suggested by Secretary of State George C. Marshall in his 1947 commencement address at Harvard and which consumed 2 percent of the American GDP to deal with what Rubin called "a somewhat similar threat" by rebuilding war-torn Europe in the interest of political stability and a healthy world economy.

Why the huge change in just five decades? Public opinion. Rubin recalled that when he went to Capitol Hill to argue, as Secretary of the Treasury, for increased contributions to the World Bank, a House member told him that votes for foreign assistance would generate a storm of criticism from constituents, whereas votes against it would produce no adverse response.

"I personally believe," said Rubin, "that, at least in the United States, changing the politics of foreign assistance would benefit immensely from, and may even require, a privately financed, massive, multiyear, ongoing public-education campaign, similar to those against drugs and smoking, to educate the American people about the impact of global poverty on us."

He pointed out that "roughly half the world's population lives on under $2 a day, and roughly 20 percent lives on under $1 a day," and noted that the longstanding policy to aid only countries with good governance and relative freedom from corruption "means that impoverished populations in many countries will be relegated to continued unaided misery because of the actions of leaders and government over which they have no control. And that includes quite a number of countries where political instability and environments conducive to terrorism could affect us."

In a world so tightly interconnected, Rubin said, global poverty will "increasingly impose itself upon us, and change our way of life, in many and profound ways" unless we meet the challenge of combating it. "I do think," he said, "that we may well be at a historically important junction point between political and social disruption, between the possible use of weapons of mass destruction on the one hand, or increasing and more widely shared economic well-being and greatly enhanced security on the other hand."

- Harvard Gazette Archives