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US Treasury Secretary Says Globalization Creates Wealth, But Unevenly


U.S.Treasury Secretary Henry Paulson says globalization has been a positive force on the world economy, reducing poverty and spurring development around the globe. At the same time, he acknowledges the benefits of globalization are not being shared equally and this has led to a backlash against it. Victoria Cavaliere reports from VOA's New York Bureau.

Speaking at the New York Stock Exchange, Secretary Pauslon said globalization is the key economic issue facing business and governments today.

He agreed with the Global Policy Forum, a non-profit group that monitors policy making at the United Nations, that globalization not only creates new markets and wealth, but also that the fruits of growth are not enjoyed by everyone.

The perceived negative impact of globalization has led to a political backlash, including policies to protect domestic markets. Pauslon says protectionism is not the answer. "Globalization has been a positive force. It's lifted hundreds of millions of people out of poverty, it's benefited this county and every country that has opened itself up to competition, free flows of capital. Yet you have this perverse situation where there's a growing protectionist sentiment in this country and around the world. There's a view that the benefits are not being spread evenly," he said.

Paulson says the U.S. economy must remain open to investment and trade, but the divide between rich and poor must be addressed. "My emphasis is going to be, how do you get the lower income up? We've got great mobility in this country already. But how do you enhance that? A lot of that is going to be education and training. I don't believe that we have programs in Washington that really work," he said.

But he was upbeat about the prospects for the global economy. "I've never seen a stronger global economy. I've said that for several years and it keeps getting stronger. Developing countries are growing at twice the rate they grew in the 1990's. They are growing at three times the rate of industrial nations. Europe has doubled its growth rate," he said.

The International Monetary Fund says many developing economies in Africa are growing. But a recent U.N. report on the so-called Millennium Development Goals found that not a single country in sub-Saharan Africa is on track to meeting the goal of slashing extreme poverty in half by 2015. The report also found that number of people living on less than one dollar a day has barely changed over the past seven years, roughly around 40 percent.