Integrating the international economic system of interdependencies. In its broadest sense, globalizing not only the facilitation of international trade of goods but also the integration of national production systems through the increased mobility of capital and labour, i.e. developing a total global market for all goods, services and activities. In a narrower sense, it may mean developing the global market for a particular commodity or integrating the global marketplace composed of free-market and mixed economies.
The globalization process is being driven by market liberalization, the expansion of multinational corporations and the information technology revolution. This is the satellite globalization, the expansion of trade in goods and especially of "symbolic goods", consumer images, experiences of happiness, ideas about beauty, trademarks of products and objects representing symbols of integration into the modern world. The globalization of communications systems, trading systems and political systems are what may be called "top down globalization".
Transnationalism was born in the late 1960s when some corporations re-organized their global operations and began working on a transnational basis. Paradoxically, while nationalism is, for the moment, a political trend and more countries are being created, the global economy has re-organized in a supra-national network, largely invisible to both common people and government leaders.
This strategy features in the framework of Agenda 21 as formulated at UNCED (Rio de Janeiro, 1992), now coordinated by the United Nations Commission on Sustainable Development and implemented through national and local authorities.
Ensuring that all countries enjoy the benefits of globalization requires meeting complex policy challenges which arise, particularly at the global macroeconomic level, from the growing interdependence of the various spheres of economic activity, including particularly trade, finance and investment, and the downside risks which this interdependence sometimes carries.
Economic integration in varying degrees has been the goal of many businesses, organizations, and governments at various times in history. During the broad liberalization process since the 1960s, barriers to international trade in goods, external financial transactions, transfer of technology and, more recently, services and some aspects of labour movements, have been lowered. The process has been uneven and highly influenced by government policies, as exemplified by successive rounds of negotiation within the framework of the General Agreement on Tariffs and Trade (GATT). Since the mid-1980s the globalization of economic activities has accelerated significantly, with computer technology making it possible to move money and information rapidly around the globe.
UNCTAD, as the focal point within the United Nations for the integrated treatment of trade and development and the interrelated issues in the areas of finance, technology, investment and sustainable development, is pre-eminently placed to examine these issues and to build consensus for reformulation of policies in a globalizing world from a development perspective and has a major role to play in helping developing countries, in particular the least developed countries, and the economies in transition better understand how to design policies for an efficient integration into the world economy, taking into account the many new issues which confront policy-makers, and tailoring the process to each country's level of economic development and institutions. In this respect UNCTAD should continue to explore, based on relevant experience, how to enhance the development opportunities at the domestic, regional and international level offered by the globalization process.
The process of creating a more closely integrated world economy is likely to continue during the next 10 years, and with increased globalization will come greater interdependence of all aspects of economic life. National economies will gradually lose their separate identities and become closely linked into an international economic system.
Economic integration is achieved through multilateral international economic agreements, treaties and organizations (based on regional location; prior military, mutual defence treaties; common language; common political heritage; common ideologies, or any combination of these) whose purpose is to create a common market between members and to achieve common economic domestic and foreign policies.
The global linking of economies means that a downturn in one country affects all others. Trading patterns must change before an economic disaster forces the whole world to open its eyes on the yawning chasm of long-term global recession. The international community has a leading role to play in guiding economic forces towards greater prosperity for all. Developed and developing countries alike must be integrated into a mutually-cooperative trading system that offers self-sufficiency and economic dignity to everyone.
In its broadest sense, the economic globalization process leads also to the integration of societies and many of their problems, such as the need for protecting the global environment.
An open international trading system must work fairly so that it brings real development benefits to the world's poorest countries, helps contribute to poverty eradication, without leading to a deterioration in environmental or labour standards. Taking greater account of the trading interests of poor countries is also in developed world's more immediate self-interest. Without the co-operation of the developing countries – who now make up a majority of WTO members – there is little prospect that the next WTO trade round, due to begin in 2000, can be concluded successfully.
In a globalized world, facing increased risks of financial crises and unacceptable high unemployment, uncoordinated national policies are no longer adequate to protect the social cohesion in our societies. While competitive multinational companies become "global players", the poor, the unemployed and all those struggling to catch up with the frontier of technological progress find themselves excluded.