Global Middle Class Initiative

Media accounts of the savage, two-year war between Israel and the Palestinians inevitably focus on the enormous human costs exacted by the ongoing strife but there is another facet of the struggle that may do even more lasting damage: its destructive effect on the two societies' economies. The devastation to the Palestinian economy has been well documented, including a recent United Nations report. Yet the intifada's toll on Israel's economy has gone largely unnoticed. Israel has no natural resources; whatever economic strength it has is based on guts and brains.

In 1997, International Rivers Network followed the money for China's Three Gorges Dam all the way to an issue of bonds underwritten by several global investment banks. This discovery sparked a five year campaign - still ongoing - to press Wall Street firms to incorporate environmental and social criteria into their core businesses of lending and underwriting. Focusing on Citigroup, the presentation will outline the history and results of the campaign and what it means for the future of holding private capital accountable.

Johannesburg -- The apartheid system is gone, but many here at the World Summit on Sustainable Development seem to want to bring back a form of "separate and unequal" for South Africa and for the rest of the Third World -- in the form of environmental regulation that would stifle economic development.

This week's positive reports showing rising consumer confidence and manufacturing activity have raised hopes that a solid economic recovery is now taking hold. But Washington should not expect its tax coffers to overflow anytime soon or for the economy to return to 1990s-level growth rates. In the short term, the economy still faces an uphill struggle to overcome the excesses of the 1990s -- too much consumption, too much debt, and wildly inflated asset prices -- that are now depressing economic growth.

In the months leading up to the votes on Trade Promotion Authority (TPA), President Bush had to buy off powerful domestic constituencies with tariffs on steel and, more recently, increased subsidies for agriculture. Now that he has TPA, the President has wisely reversed course and proposed a far-reaching plan to use the Doha round of trade talks to eliminate the majority of world-government support for agricultural products by 2010. The agricultural proposal, in conjunction with TPA, will hopefully enable the administration to undo years of European Union and U.S. protectionist policy.

Among supporters of globalization, there is remarkable disrespect for even the most basic facts. For example, World Bank data shows the vast majority of developing countries experienced slower growth between 1980 to 2000 than in the preceding twenty years. But even in light of such compelling evidence, former Treasury Secretary Larry Summers told the New York Times:

A new model of consumer-led growth is beginning to emerge in the tiger economies -- in South Korea and Thailand, in particular.

This model owes a lot to the U.S. model. But in this instance, it is not the model that the U.S. Treasury and International Monetary Fund, both Washington-based institutions, have been peddling for more than a decade.

The real American model

Rather, it is the American post-war success story of consumer and government-deficit led growth that has made the United States such a prosperous middle-class economy.

Please join us as Harvey Himberg explores the role of financial institutions in foreign direct investment (FDI) and the implications of their role for the relationship between investment and the environment. Without legitimate and relatively functional national and supra-national regulatory mechanisms to set the "rules of the game" and arbitrate disputes, like those enjoyed by trade, how can FDI and its environmental impact be regulated? As of now, financial institutions are, by default, becoming the de facto arbiters of environmental standards for FDI.

Thought at one time to be the likely centrepiece of its foreign policy, the Bush administration's relations with Latin America are in disarray.