Inclusive Globalization: Making It Work for Everyone
Globalization and rapid technological progress have long been key drivers of economic growth and societal transformation. However, this progress has not benefited everyone equally. While globalization has brought tangible benefits to most people worldwide, it has also caused shocks and disruptions, particularly for low-skilled workers and traditional sectors that have struggled to adapt to new economic realities.
This challenge is not new. From the Bronze Age to the Industrial Revolution and beyond, humanity has continuously faced the spread of new technologies and the need to adapt. Debates over trade and access to foreign markets are as old as society itself. Nevertheless, history clearly shows that closing borders or embracing protectionism is not the solution. Countries that pursued this path largely failed, while those that implemented policies to expand the benefits of integration and strengthen social safety nets succeeded in achieving inclusive and sustainable growth.
1. Globalization: Benefits and Challenges
Real Benefits
Globalization has positively impacted emerging and developing economies in particular. According to the World Bank (2025), international trade has helped reduce the share of people living in extreme poverty from 36% in 1990 to 7% in 2025.
China provides a striking example: extreme poverty fell from 36% in the late 1990s to less than 2% by 2025 (World Bank, 2025). Vietnam, within a single generation, transitioned from one of the world’s poorest nations to a middle-income country, with notable improvements in health and education. Vietnamese students now outperform many wealthier nations—including France, Germany, the UK, and the US—in science, math, and reading skills, according to the latest OECD PISA 2025 results.
Even in advanced economies, economic integration has clearly raised living standards through more efficient allocation of capital, productivity gains, and lower consumer prices. IMF’s World Economic Outlook 2025 reports that international trade has increased real household incomes by up to 45% in advanced economies since 2000.
Migration has also boosted growth, innovation, and social diversity. For example, Canada welcomes approximately 250,000 immigrants annually, reinforcing the labor force and enriching the country’s cultural and economic vitality (Statistics Canada, 2025).
Side Effects and Challenges
Globalization, however, comes with costs. Increased global labor competition has put downward pressure on wages, especially for low-skilled workers in advanced economies. In the United States, competition from low-wage countries and widespread automation has contributed to declines in manufacturing employment, with long-term impacts on specific local communities (US Bureau of Labor Statistics, 2025).
Global capital flows, while boosting investment, have also heightened financial vulnerability and concerns about systemic stability (IMF, Global Financial Stability Report, 2025). Additionally, growing wealth and income inequality in many countries has fueled dissatisfaction, particularly in industrialized nations, where some citizens feel left behind by the system.
2. The Role of Governments and National Policies
To make globalization work for everyone, governments must create an environment conducive to growth and implement policies that mitigate globalization’s negative effects:
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Enhancing the skills of low-skilled workers: Investing in education, robust retraining programs, and partnerships between industry and educational institutions to facilitate transitions into new jobs.
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Strengthening social safety nets: Providing adequate unemployment insurance, comprehensive healthcare, and portable pensions, alongside fair tax policies.
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Promoting economic fairness: Combating monopolies, preventing tax evasion, and fostering competition in key sectors.
These policies can create a virtuous cycle: stronger, more inclusive growth reduces inequality, which in turn fosters broader support for further reforms and economic openness.
3. Global Cooperation: The Path to Inclusive Growth
No country can achieve prosperity in isolation. As Martin Luther King Jr. aptly said: “Whatever affects one directly, affects all indirectly.”
International trade exemplifies this interconnectedness. Trade drives competition, encourages innovation, and lowers prices for consumers. For instance, consumer goods today are far cheaper in real terms than decades ago despite higher quality standards, illustrating globalization’s tangible benefits.
Moving forward, it is crucial to strengthen multilateral trade agreements, open trade to all World Trade Organization members, and promote digital trade by enabling free data flows, unlocking the full potential of global e-commerce.
About fifty years ago, Canadian philosopher Marshall McLuhan described the world as effectively a “global village.” Today, the task of today’s leaders and policymakers is to transform this village into a truly humane one—a place where every individual can find a safe and prosperous home for themselves and their children.
Economic openness and the spirit of cooperation, the very principles on which the International Monetary Fund was founded, remain essential to supporting this mission and achieving broad, sustainable prosperity for all.
Sources:
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World Bank. (2025). Global Poverty Report 2025. worldbank.org
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OECD. (2025). PISA 2025 Global Survey on Education. oecd.org
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IMF. (2025). World Economic Outlook 2025. imf.org
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Statistics Canada. (2025). Immigration and Population Statistics. statcan.gc.ca
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IMF. (2025). Global Financial Stability Report 2025. imf.org
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US Bureau of Labor Statistics. (2025). Labor Market Data. bls.gov