The merits of globalisation was the topic of a BBC World Service radio programme last week. The panel discussion also considered whether 'hot money' or capital flows should be regulated and their impact on women. We present extracts below

PRESENTER Lyse Doucet: Globalisation is the new buzzword that seems to surface everywhere. Is more interdependence, more openness a good thing? Can the flow of hot money be controlled?

Do morals have a place in this world of fast money? Who suffers most? And are women hit hardest?

With me are:

Dr Jayanta Ghosh from the Centre for Economic Studies and Planning of the Jawaharlal Nehru University in Delhi, India.

She has written extensively on global economic and social issues and is about to publish two books: one on the evolution of the international economy and another on the Southeast Asian crisis.

Elisabeth Paulson is the Deputy Director at the Economist Intelligence Unit in charge of the quarterly assessments of business environments in some 60 countries.

She is also a specialist on South and East Asia.

Helena Norberg-Hodge is founder and director of the International Society for Ecology and Culture and the Ladakh Project.

She has received what we call "the alternative Nobel Prize" for her work on community regeneration, the environment and decentralised economic development.

She is also a founding member of the San Francisco-based International Forum on Globalisation.

Bronwyn Curtis, an economist who focuses on international financial markets, has had extensive experience in banking and commodities and until recently was chief economist at Nomura International, the largest Japanese securities house.

She is also a member of the Economic and Social Research Council.

The world, it seems, is more open than ever before, goods and capital are moving between countries, helping to create jobs and fuel growth in both developing and developed nations.

But these same flows have the power, as we have seen in South-east Asia, to create crises which can bring countries to their knees.

On balance, is globalisation a good thing?

Curtis: It's good and bad. You can't really say on balance it's one or the other. What it does is bring inevitably huge change.

If you think back to when the UK industrialised, it took a long time. It was a long, slow process. The infrastructure grew with the process. So, over time, everyone got used to it. You had more people moving to industrial centres.

What's happened in a lot of developing countries is it happened so quickly.

Doucet: If we're talking about these flows of capital, this invisible hand if you like, do we say then that markets know best?

Norberg-Hodge: I think we can't say that markets know best. Money goes to where money can be made and money can be made most easily in areas where people are often very vulnerable, women in particular.

It moves into areas where people have no built-up environmental protection or even human rights protection.

To say we should allow the market to move quickly into the most vulnerable parts of the world is something I think most people, if they understand the consequences, would not agree with.

Doucet: But they do say that markets, foreign direct investment, do bring good things to vulnerable countries because they can create more jobs. Is that not a good thing?

Norberg-Hodge: If you look around the world, you'll find that unemployment and poverty is increasing far more rapidly than ever before in the industrialised countries because of globalisation. Millions of people are being pulled out of rural livelihoods into enormous slum-like megalopolises in search of work.

All of those people were actually unemployed and when they move into those cities they have a harder time getting clean water and decent food, they have almost no community, no support.

At least in the villages they generally have all of those things, direct access to food, more community. However, because the economic activities in those villages are not quantified, don't measure up on economic yardsticks, people consider that nothing and this is where we get a very slanted impression.

Doucet: So, in fact, doing nothing less than turning countries upside down.

Dr Jayanta Ghosh, do you agree with that assessment?

Dr Ghosh: There are aspects of it which obviously are inevitable and good and positive, in particular the changes technology brings. For example, through Internet, communications, etcetera.

Doucet: They bring the world together...

Dr Ghosh: Absolutely. And they in a sense democratise the world as well.

But there are other aspects and to say that these are inevitable is to my mind quite crazy. To say that we have to have unregulated financial flows, we have to have short-term capital movements that are very volatile and destabilising, there's no alternative.

We have to have completely free movements of all kinds of capital and no possibilities for labour to move freely.

Doucet: Take your own country, India. What does India have to have if you could pick and choose some globalisation? What would it have to have to make a better world?

Dr Ghosh: What India needs, what most developing countries need today is huge investments to make infrastructure, to increase employment, very sustained huge investments.

It turns out that history has shown in a very difficult way that finally you have to emerge from under-development through your own savings... you can't do it by relying on foreign capital.

Doucet: So the big bad wolf actually isn't outside the door and barging in, actually the big bad wolf is inside, it's your own governments that have to take responsibility for what's happening.

Paulson: I agree. But one thing that misses the point on globalisation is, ultimately, domestic governance is let off the hook. I think it's no coincidence that the rise of this term "globalisation" has coincided with the rise of "illiberal democracies".

Most of the countries that have suffered the most did so in the last couple of years. We're not talking about the worst-hit -- South Korea, Malaysia -- these are not sort of the direst of the dire.

They were lucky enough to even be considered part of this global financial woe but nevertheless it's no coincidence that they had huge dislocations, huge buildup pressure in their political systems, not to mention mismanagement which benefited a lot of people in positions of power.

Doucet: But they also benefited from the financial corporations which have been very happy to work with these kinds of leaders.

Paulson: No question at all. And even speaking as an American, I'm under no illusion that so many of the banks in the US were very much behind this drive to open up capital accounts; in particular, to make the world free for their own banks and insurance companies to operate.

Dr Ghosh: Actually I have a real problem with this word "governance", I can't stand it. I think it's complete nonsense. Because what it's really trying to say is that everything terrible that happened to developing countries is their fault.

Because, you know, they have this crony capitalism, we don't. We are all lovely transparent banking systems, you know, never mind if long-term capital management is a hedge fund but actually is today still being unravelled because it was so full of crony capitalists.

Never mind but all these countries are full of these terrible dictatorial regimes and therefore they deserve what they get.

It's more than a domestic problem in that there is something fundamentally undemocratic about the way capital flows today. And I think it actually reduces the power of people within their own countries to fight this. Because you're always told "Oh my God, we have to keep investor confidence, we have to keep the foreign investor happy".

Doucet: We seem to be saying that there are undemocratic regimes but these flows themselves are undemocratic.

This creates a very undemocratic world.

Norberg-Hodge: Exactly, I think we need greater clarity on this. First, the term "globalisation" was coined by large multinational corporations and when we analyse what this process actually is and where it comes from, what we find is that we have had very large multinational corporations lobbying governments to sign treaties that essentially are not about trade between countries.

They are not even about investment flows between countries, but are about every country opening up to large multinational corporations and to large centralised banks and investment firms.

So we need to understand that what we're talking about is this very centralised global economy dominated by huge companies and a few large banks.

Now we already had a highly centralised global economy when we allowed one World Bank, one International Monetary Fund to dictate to every country around the world what their economic policies should be.

Doucet: There are a lot of different ways in which the world is now connected more than before... Let's just take one: "hot money", these speculative capital flows. Dr Ghosh, do you think this contributed to the downfall of countries like Indonesia, letting too much money in too quickly?

Dr Ghosh: Yes, there's no question about it. I think that is sort of universally accepted now, that hot money is bad and so on and so forth but it's not the only bad thing.

I think that's what we have to also remember, this thing that "Oh everything is the fault of speculative capital" is also problematic. It's not.

There are deeper and longer processes at work. Even "FDI, yes FDI can be good, it always creates jobs", I think that's a misconception. What we also have to remember is that 86 per cent of it last year was mergers and acquisitions internationally.

So most of it is not actually new investment, it's just people buying each other up.

Doucet: Now we're going to take a call from a Lena Tan from Singapore. Lena Tan, I understand you want to give your point of view on globalisation. Can we blame it?

Lena Tan: I'd like to reiterate what has just been said. I think that there are many causes and many links and I think trying to just pinpoint one culprit or one factor and think this is causing everything is really misconceived.

Globalisation is occurring, we really can't stop it. It's a feature of the new landscape and we've just got to cope with it. And here I think it's where states come in and by talking about the importance of the role of states I don't mean that states should give in to the business of planning everything.

They should be in the business of providing the right sort of infrastructure so that their people and countries can be flexible enough to adjust to a new landscape where adaptability is key.

Doucet: Elisabeth Paulson, do you agree that states have a role to play?

Paulson: I think they do. The debate on whether to open capital flows misses the point because in the end putting in some of these controls wouldn't have averted the crisis.

Doucet: If globalisation is here to stay, what role do governments have to play to try to reduce its impact?

Norberg-Hodge: What we need to do is to recognise that unless measures are taken very very soon to curtail the hot money, first of all to create some sort of stability, we're going to see even more disastrous changes. We keep talking about the Third World, but in my own country of Sweden we see a tremendous job insecurity, we see small farmers destroyed day by day.

Here in Britain, same picture. I've just returned from New York, the main headline news last week was that the sense of job insecurity is rising dramatically, particularly among white-collar workers, so I find there is a tremendous sense of insecurity, instability worldwide.

We need to slow that down, we have the chairman of the US Federal Reserve, Alan Greenspan, in agreement. That's the first item on the agenda.

Have a multilateral treaty immediately, to curtail the hot money and allow some space and time for nation states in multilateral arrangements to create even healthier economic policies. That first step would be to control the instability and volatility.

To move to a healthier economy, we have to look much more deeply, to realise that fundamentally what we called economic growth destroys farmers.

So we have seen throughout the industrialised world that we have reduced our farmers to roughly 2 per cent. They are now committing suicide, they are having to give their animals away.

This programme was transcribed by IVY GOH of The Sunday Times' Transcribers Desk.