Demon by Siona Benjamin (detail)
Demon by Siona Benjamin (detail)
Demon by Siona Benjamin (detail)
  What the Reporter Saw
The role of media in globalisation and development

its contents
  Vol V : issue 4& 5

  Amartya Sen

  Günter Grass
  Joseph E. Stiglitz
  Meghnad Desai
  Jug Suraiya
  Sunil Khilnani
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Joseph E. Stiglitz and Anya Schiffrin

Globalisation has become one of the major topics of the media in both developing and developed countries. Reporters now cover major events, such as the annual meetings of the IMF and the World Bank, and the periodic meetings of the World Trade Organisation, and also interpret what happens at those meetings within the broader debate on globalisation. Media coverage of globalisation has already played an important role in shaping the recent evolution of globalisation. The spotlight that the media placed on globalisation, including earlier trade agreements, after the riots in Seattle at what was supposed to be the inauguration of a new round of trade negotiations in December 1999 helped validate many of the criticisms that had been levelled by the critics of globalisation, and provided some of the impetus to having the new round of trade negotiations focus on development.

Acrylic on canvas by GIEVE PATEL

While economic and business reporters naturally focus on economic globalisation — the closer integration of the economies of the world as a result of the reduction of transportation and communication costs and the reduction of man-made barriers to the movement of goods, services and capital throughout the world — there are other important dimensions to globalisation: globalisation of knowledge, ideas, ideology, civil society, culture. These other dimensions represent both some of the greatest virtues and some of the most important criticisms of globalisation. Advocates of globalisation see not only the increases in incomes, but also the spread of democratic values. Opponents of globalisation worry not just about the loss of jobs, but about the loss of local culture.

For example, countries with dissimilar economic situations could be given very similar advice — such as to cut deficit spending and raise interest rates — when they receive IMF and World Bank aid. And much of this advice is meant to bring them into the global economy, such as trade liberalisation or privatisation which can lead to foreign ownership of local companies.

Because the advice is often not well adapted to the country at hand, and is often insensitive to the social and political context, it has often failed, and has often generated intense domestic opposition. This opposition itself has now become a global phenomenon: protests against the reduction of food subsidies or suspicion of foreign ownership of local businesses have occurred in many countries around the world. The opposition has now spread from developing countries, where it has long been present, to the developed world: the anti-globalisation movement itself is a global one.

Today, domestic economic policies have global impacts. This is particularly true of the policies of the advanced industrial countries: US or EU agriculture subsidies mean that developing countries such as those in Africa find it harder to export their products. In adopting its $4 billion cotton subsidies, America meant only to help its 25,000 (mostly well-off) cotton farmers; the unintended consequence was to lower further the living standards of 10 million African cotton farmers, many of whom are already living at subsistence levels. But it is even occasionally true of developing countries: when Vietnam decided to expand its coffee exports, it was so successful that coffee prices around the world were depressed, leading to economic difficulties in Brazil, Colombia and Central America.

All of these phenomena have affected the kinds of topics the media covers and the media has also had to look at the reactions around the world of those affected by globalisation. Too often, the media characterises critics of globalisation as ignorant opponents of the process (for example, Sebastian Mallaby in his new book on James Wolfenson and the World Bank refers to the protesters as ‘flat-earthers’). It is important for the media to remember that much of the opposition to globalisation is not so much to globalisation itself, but to the way that it has been managed, and in particular, to the imposition of a particular set of ideas and ideologies on developing countries. The end of the Cold War has also meant globalisation of economic ideologies such as that of the Washington Consensus, arguing for ‘market fundamentalism’ (the belief that markets, by and large, are self-regulating and accordingly, that there should be a minimal role for government) and advising countries to focus on liberalisation, privatisation, and stabilisation — which usually means keeping inflation low even at the expense of economic growth.

Among the ideas that globalisation has helped spread is ‘global capitalism’, which accepts that economic globalisation and the domination of large multinational firms is inevitable and beneficial, and that countries should be working on how to live with it. This in turn has helped spawn another global movement — that of anti-globalisation, which has become a global movement.

In economics as well as in politics, today there is also an intertwining of the global and the local. What this means for journalists is that today, reporters everywhere cover global issues, and that local economic stories have become global ones. This has placed a huge burden on reporters all over the world. It is not enough to know about your local company any more. You also need to know about global trends in the sector in which your local company operates. You can’t write about labour in Jakarta or Hanoi without knowing about the Nike boycotts in the US and Europe. Writing effectively about a local privatisation or banking crisis means having to know about what has happened in other countries. It is the experiences in other countries that informs so much of the debate.

Unfortunately, reporters around the world are covering these often complex topics with very little background information, either about the experiences in other countries or the alternative interpretations that have been given to them. We have met with reporters around the world and found two things: they are by and large (with some notable exceptions) ill-prepared to write about the complex economic issues facing their country; and they lack information about what has happened in other countries.

In Ecuador we met reporters who needed to know about privatisations because Ecuador was thinking of privatising electricity and they had never covered a privatisation before. A few months later we went to Bulgaria and found that reporters there were also supposed to be covering electricity privatisation. They didn’t know much about the subject and they had no idea that it had been discussed in Ecuador. In Turkey, a country beset by financial crises, reporters asked us about the debt crises in Argentina and Brazil.

In Brazil, reporters we met wanted to know how Korea had done so well and what lessons they could draw on as they wrote about the Brazilian economy. When we were in Bulgaria, it had just restructured its foreign debt and reporters were unsure of the consequences; they knew that Russia had restructured its debt just before its crisis of 1998, under the advice of the same people who had encouraged Bulgaria to restructure. They naturally worried about whether there would be similar consequences. In Moldova, one of the poorest of the former Soviet Union republics, which had seen its income decline 75 percent since it began its move to a market economy, most of the meagre public funds were spent on servicing international debt. It faced imminent default or debt restructuring. Reporters wanted to know how these things happen and what the consequences would be: would it lead to an even further decline, or, as in Russia and Argentina, would it signal the beginning of a turnaround?

Inevitably, this lack of knowledge hurts coverage. Business and economics reporters are especially vulnerable because the subjects they write about are so technical and require so much knowledge. Naturally, reporters will turn to the nearest available sources and, regrettably, they sometimes report what they learn uncritically, not realising the biased perspectives. When a journalist is on deadline and writing about a topic that is unfamiliar to them, it is all too easy to take the nearest press release and repeat it verbatim. The problem is that those who devote resources to public relations usually have a motive for doing so. They typically want to convince others to support the positions that they advocate. But too often reporters take press releases as facts rather than as advocacy.

The international economic institutions, for instance, have well-honed and well-funded public relations departments. If they are urging a country to privatise its water supply, they naturally will explain why it will enable more investment, and therefore greater access to clean water. They will typically not mention the enormous opposition to water privatisation in other countries, and if the issue is raised in a press conference, they will either quickly dismiss such opposition or explain why it is misguided. They are unlikely to emphasise the problems that have occurred elsewhere — the increase in prices, making clean water unavailable to some that previously had access; the one-sided renegotiations — if the foreign concessionaire bids in a way that leads to low profits, he insists on new terms, often with pressure brought to bear by the foreign government; but if the foreign concessionaire has high profits, pressure from the government to renegotiate are strongly resisted. If there are discussions of an electric power agreement, the emphasis will be on the increased availability of electricity, not on the price or on the large risks which the government may assume.

Other readily available sources of information often reinforce these biases. The water company obtaining the concession or the international firm signing the electric power agreement often have well-functioning and well-financed public relations departments that attempt to shape public opinion.

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Joseph E. Stiglitz, former Senior Vice President and Chief Economist of the World Bank, is the author of ‘Globalisation and its Discontents’ (2002). Regarded as the founder of the economics of information, he is University Professor at Columbia Business School. Stiglitz was awarded the Nobel Prize for Economics in 2001
Anya Schiffrin is Director of journalism training programmes at the Initiative for Policy Dialogue, Columbia University. A former editor, she lives in New York