Globalization's Next Frontier

It's difficult to know precisely what effect the launch of U.S. bombers and cruise missiles has had on the rugged, desolate Afghan landscape. But the effect outside Afghanistan's borders is clearer: Many nations have expressed support for the U.S. attack. But among some people in the Islamic world, the bombing has aroused opposition, intensifying anti-American sentiments and sparking violent demonstrations.

What is happening is a clash not between Islam and Christianity, or between the East and the West. Instead, it is a clash between Islamic fundamentalism and the modern world--a violent encounter between the adherents of two bitterly opposed world views who are now locked in a kind of global combat not seen since the fall of communism and the end of the cold war.

This new conflict threatens to upend a decades-long global progression toward tighter economic, political, and social integration--the process known as globalization. Fueled by trade, globalization has advanced the ambitions, and boosted the bottom line, of some of the world's largest corporations, many of them based in the U.S., Europe, and Japan. It has given developing countries an opportunity to join the growing global economy and share in the wealth, a necessary--if not sufficient--step toward easing poverty, tyranny, and local conflicts around the world. In many developing countries, it is working: Life expectancies and per-capita income are rising. Local economies are growing. And in some cases, this new membership in the global economy has encouraged social and political liberalization.

But the road to globalization has not been smooth. Critics have charged that it has excluded many of the world's poor, and that the move toward prosperity has sometimes come at the expense of human rights. Much of the criticism in the West calls for the reform of globalization, not its undoing. But for many Islamic fundamentalists, globalization represents an intolerable secularization of society.

Reports from BusinessWeek correspondents around the world suggest that the terrorist attacks of September 11 will likely slow globalization. The perception of risk is adding to the costs of doing business in this transformed world. Globalization depends on open borders and ready access to transportation and communications. All of those things are imperiled in a world wary of terrorism. Restrictions on travel, on crossing borders, on communication, on the shipment of goods, and on immigration are already in place, and they will be toughened in the coming weeks and months. Those moves will slow globalization and retard the growth of the global economy. That, in turn, could further damage an already troubled U.S. economy.

The U.S. must search for opportunities to reach across the divide separating Islamic fundamentalists from the West. It must find the moderates in Arab countries, the people who are able to find a way to honor their religion and at the same time participate in the global economy. Security is our immediate concern, as it should be. But global equity, progress, and economic growth must still be our long-term goals. The U.S. must now do everything it can to see that the long trend toward a more integrated and more prosperous world continues.

    Before it's here, it's on the Bloomberg Terminal.