The challenges to the next administration posed by globalization fall into three broad categories. The first is to ensure a strong and stable flow of global capital. A critical component of this is an effort by the international community to make financial crises, such as the recent one in Asia, less frequent and less costly. This experience has led to a reform of the international financial architecture, putting in place more effective means to prevent crises, safer policies in the emerging market economies, and reorienting the International Monetary Fund so that it is better equipped for modern crisis response. An open world-trading system is the cornerstone of the new global economy, and the new U.S. administration should continue in this direction.
Globalization has a number of positive effects.
It reduces conflict because people are working together for common prosperity and therefore have enormous incentives to set aside their differences. Ultimately, this strengthens domestic forces and improves human rights. Support for the Poorest Countries Open markets and open trade alone cannot carry the burden of lifting the poorest nations out of poverty. The challenge faced by the global community is to find ways to facilitate the inclusion of the poorest countries in the global economy by overcoming the barriers to their integration. This will be difficult as long as half the world's population has yet to use a telephone and 40 percent of African adults cannot read.