Lord Peston

Question: Is globalisation having a desirable effect in both the developing and the developed world?

Lord Peston: All our reports are totally evidence based - we do nothing that is not based on the evidence. The answer is in broad terms, with some exception which I shall mention, we think the effects of globalisation have been very definitely positive.

Positive in the sense that those countries who have opened themselves up to global forces to various degrees have gained. And to quote the American economist Paul Krugman there is no example of a country that has really prospered or bloomed that has kept themselves closed. That is our main, broad conclusion.

But following from that two things: one is that we strongly argue against what seemed to be the original IMF position that different countries can approach openness in their own way; secondly there is at least one part of the world where there are no discernable signs of benefits and that is sub-Saharan Africa - which we are very concerned about.

How much is the set of problems that exist there down to globalisation and how much of it is down to themselves? It's not our view that their problems have been caused entirely or even mostly by globalisation.

Question: Is the developed world getting richer at a quicker rate - is the inequality gap growing as a result of globalisation?

Lord Peston: The answer is problematic. We have had evidence which says the gap is growing - but we have had evidence to say there has been a considerable amount of convergence between countries and the benefits have not therefore mostly accrued to the rich countries. There is other evidence which takes the opposite view. This is one area where the interested person ought to look at the different bits of evidence that we point to and make their own assessment.

My own personal view, is that I am more impressed by the evidence that says inequality hasn't risen. But that is very much on balance a matter of judgement.

Question: What have been the consequences of globalisation for Britain?

Lord Peston: Our broad conclusion is that this has been beneficial to Britain. How beneficial is slightly tricky because if you look at the growth rate of the economy, on the whole it seems to have been fairly stable and therefore you can argue on the one hand well then it doesn't look as though globalisation has transformed the economy.

On the other hand that if we didn't embrace globalisation to the extent to which we had our growth rate would have been lower than it has been.

In certain obvious areas we have gained considerably - in the financial services area. London is a global centre of enormous importance and if you concentrate just on financial services clearly there are very considerable benefits.

Question: Do organisations such as the World Trade Organisation (WTO) have sufficient powers to effectively police and regulate the globalised world?

Lord Peston: I think it is fair to say that we started off very sceptical not merely of WTO, but also the IMF, the World Bank and so on. One the advantages of an evidence based approach is that we ourselves have shifted our view.

On the whole we feel more positively about the three institutions. But we are concerned about two matters.

The poorer and the smaller countries of the world did feel that they are under-represented in terms of powers and influence in the WTO and we certainly recommend that the government and the EU ought to be pressing for redressing the balance somewhat.

But we are not naïve - in the end we know that bodies like that will be dominated by world powers, that's the world we live in.

Equally, although we think the IMF has improved, we really do think they need to be much more sensitive to the particular circumstances of some of the poorer countries and not impose on them a narrow doctrine that they seemed to be doing 20 years ago?

Question: What are the remaining barriers to a globalisation that puts all parts of the world on an equal footing?

Lord Peston: The first thing which we emphasise very strongly is that we are still very concerned to the extent to which the rich countries of the world still protect themselves from totally fair and reasonable competition on the part of the poor countries.

The word that comes to my mind is hypocrisy. Having told the poor countries, 'put your house in order, start to modernise, embrace the global world' they start to succeed and either we do terrible things like subsidising our agriculture and protecting it.

To use my favourite football analogy it would be as if some football team in the premier league really had improved its position and then Manchester United changed the rules and said you have got to score three goals to count one.

We are still very unhappy about the double standards that the rich countries have and we strongly argue that it is our duty to do more about that. The CAP is an absolute disgrace - compare CAP subsidies with how much aid we give, you just see the imbalance there. You'd be better off giving no aid and get rid of all the CAP subsidies.

Question: Is the British government doing enough to address this issue?

Lord Peston: The general view, and this is without us being ultra-patriotic, we were very impressed when we spoke to all sorts of people outside the country at the high regard that they held for Clare Short. Her reputation stands incredibly high in the emerging world as someone trying to do all she can. That is therefore very much to the credit of our own country.

Now, doing enough? You can always do more - to give one obvious example a great number of the problems in the countries we are talking about arise from their institutional structure rather than anything else. They really don't have legal systems that are terribly encouraging of business enterprise and there are various other aspects of their system which is a problem. We would certainly feel we have a duty to try and help them.

Our whole approach is not for us to tell them what to do, or to do it for them. The expression we use is 'to help them to help themselves'. And the other concept we are very keen on is doing things in partnership.

The answer is that Clare Short has definitely improved things and works very hard - but it is always true that we could do more.

Question: Did you find any evidence to support the glib assertion that "globalisation = Americanisation"?

Lord Peston: You can exaggerate that view. Just off the cuff from personal experience, in the past year I have been in Italy, France and Spain. This notion that everything is dominated by global brands simply is not true. There is no doubt, that you do see some McDonalds and Coca Cola is one of the world brand images.

The Americans are very powerful and have enormous influence of what happens, but the world is not one world equals America in our view. Except for the examples I have mentioned of protecting American industry and agriculture I don't think we see the US as a force for evil.