International

Journal of Economic Cooperation Among Islamic Countries 19, 1-2 (1998) 137-152

GLOBALISATION AND INDUSTRIAL DEVELOPMENT: IMPLICATIONS FOR DEVELOPING COUNTRIES

AND INTERNATIONAL CO-OPERATION


George Assaf¹

Globalisation is the most talked about concept of the 1990s. Commentators in developed and developing countries alike from all walks of life--whether they be politicians, trade union and religious leaders, journalists, economists or business gurus-

-have something to say about it. Everyone agrees that globalisation is a process that has tremendous significance for industrial development. There is less agreement, however, on whether globalisation is of benefit to everyone, especially in the short term for developing countries. In this paper, some of the major issues associated with globalisation and industrial development are addressed, particularly how the United Nations (UN) system and international agencies such as the United Nations Industrial Development Organisation (UNIDO) can contribute to ensuring that the developing countries can fully participate in the process to best advantage.²

The paper is structured as follows: Section 1 sketches the current performance of the world economy as essential background to understanding the globalisation process. Section 2 identifies the core characteristics of globalisation and asks the important question: what is different or new about globalisation? Section 3 highlights the major phenomena of soaring private flows and declining Official Development Assistance (ODA) in recent years and the rise in inequalities within and between countries. Section 4 confronts the thorny issue of whether trade with developing countries is harmful to developed countries. Finally, Section 5 highlights the major challenges globalisation presents for industrial development and particularly for the UN system and specialised agencies such as UNIDO.

The central message of the paper is that globalisation is the major challenge of the 1990s. If it is managed properly, it has the potential to benefit all, especially in the medium to long term, whether developing countries, countries with economies in transition or industrialised countries. It is not an uncontrollable force or a headless monster as some would lead us to believe. But neither is it benign: with any dynamic process of change, there are winners and losers. However, it is not a zero sum game. The real challenge is to harness the potential of private entrepreneurship and market

¹ Planning Officer, Strategic Planning Office, UNIDO, Vienna.
² It is important to emphasise that the discussion in this paper is limited to the industrial development issues of globalisation. It does not, therefore, touch upon the vitally important cultural, religious, linguistic, sociological and political challenges that globalisation poses.

forces without destroying social cohesion; and at the same time, to identify the losers from the process and design policies and other measures to help them overcome their constraints and thereby reap the benefits of full participation in global markets. It is in this broad context that the United Nations system and UNIDO in particular have a vital role to play.

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