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Why Globalization is Good

Robyn Meredith and Suzanne Hoppough 04.16.07

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Multinationals are trashed as exploiters of the poorest people on the planet. Wrong, wrong, wrong.

A ragtag army of save-the-world crusaders has spent years decrying multinational corporations as villains in the wave of globalization overwhelming the Third World. This ominous trend would fatten the rich, further impoverish and oppress the poor and crush local economies.

The business-bashing group Public Citizen argued as much in a proclamation signed by almost 1,500 organizations in 89 countries in 1999. Whereupon hundreds of protesters rioted outside a conference of the World Trade Organization in Seattle, shattering windows, blocking traffic and confronting cops armed with tear gas and pepper spray. Six hundred people were arrested.

Cut to 2007, and the numbers are in: The protesters and do-gooders are just plain wrong. It turns out globalization is good--and not just for the rich, but especially for the poor. The booming economies of India and China--the Elephant and the Dragon--have lifted 200 million people out of abject poverty in the 1990s as globalization took off, the International Monetary Fund says. Tens of millions more have catapulted themselves far ahead into the middle class.

It's remarkable what a few container ships can do to make poor people better off. Certainly more than $2 trillion of foreign aid, which is roughly the amount (with an inflation adjustment) that the U.S. and Europe have poured into Africa and Asia over the past half-century.

In the next eight years almost 1 billion people across Asia will take a Great Leap Forward into a new middle class. In China middle-class incomes are set to rise threefold, to $5,000, predicts Dominic Barton, a Shanghai managing partner for McKinsey & Co.

As the Chindia revolution spreads, the ranks of the poor get smaller, not larger. In the 1990s, as Vietnam's economy grew 6% a year,...