The New Global Community

Introduction

Sitting in my home on a sunny March morning in the year 2000 I vividly recall a day in November, 1991 when I received a telephone call asking me, an American lawyer, to volunteer my time and legal skills to assist the government of Lithuania in its transition from a Communist, centrally-planned economy, to a democratic, market economy. Since that time, I've spent just about as much time in Central and Eastern Europe as I've spent at home in the United States. Cities such as Vilnius, Tirana, Sofia, Bratislava, Kiev and Moscow, which in the past, to the extent I had heard of them at all, were only names on a map, came alive to me during those years.

Why did I agree to go to Lithuania in the first place? How did I end up working with the governments of fifteen countries in Central and Eastern Europe over the next nine years? The answer to these questions is in some ways tied to the fact that at that time (and continuing into the present) a new phenomena had begun to overtake the globe one can't pick up a newspaper or turn on the television without hearing about socialists embracing capitalism, governments selling off companies they had previously nationalized, and countries seeking to entice back multinational corporations that they had expelled just years earlier. What did these changes mean for me and my children?

Participating in a unique moment in history and rubbing shoulders with the new revolutionaries in Eastern Europe who had overthrown Communism, was, of course, in and of itself, a motivating factor. Equally important, however, was my belief that if the West and its advisors could bring about the desired material improvements in everyday life for these long-suffering people, then democracy would follow and the world would be a better place for my children. To achieve such material improvements, however, required not only significant changes in financial institutions, but also a complete reconstruction of these countries' legal systems---the place where I fit in.

I believed then, and now, that if one wants to understand the post-Cold War world, you have to start by understanding that a new international system has succeeded it, that is, globalization. Globalization has meant the spread of free-market capitalism to almost every country in the world. Additionally, globalization has brought about the integration of markets, countries and technologies in ways that have never before been seen.

The end of the Soviet Union and communism has redrawn the map of world politics and has eliminated ideology as a dominating factor in international affairs. The growth of capital markets and the continued lowering of barriers to trade and investment has further tied markets together. The symbol of the Cold War system was a wall which separated Eastern and Western Europe for over forty years and which divided everybody. The current symbol of globalization is the Internet.

Globalization is the embodiment of speed - speed of commerce, communication and innovation brought about by new technologies such as computers, satellites, fiber optics and the Internet. Globalization has also given rise to a new set of economic rules - rules that revolve around opening, deregulating and privatizing a country's economy.

As a result, future historians may look back at these times and come to the conclusion that the great divide between the twentieth and twenty-first centuries was the change in the nature of the nation-state and the opening of the doors of many formerly closed countries to trade and investment, vastly increasing, in the process, the effective size of the global market facilitated by revolutionary changes in technology.

I learned about the speed of globalization and the revolution in communications early on in my travels. Although my first serious interaction with a computer and the Internet occurred only a week before I left on my kickoff trip to Eastern Europe (I was a late starter), communicating with my office in New Jersey, whether from Vilnius, Lithuania, Warsaw, Poland or Tirana, Albania was a relatively simple matter. Not only was I able to stay in touch with my U.S. clients, review their documents and handle their legal problems on a daily basis, no matter where I was located, but I was also able to communicate directly with development experts throughout the world with one click of a mouse. Moreover, no matter where I traveled the Internet provided me with a powerful and portable development tool because it made laws and legal materials of all types readily available to me for reference, adoption, adaptation and dissemination.

Issues Facing Globally-Connected Capital Markets

Capital now moves across countries at breakneck speed; manufacturing and the generation of services move more easily across borders; and, markets are supplied from a continually changing set of sources. New ideas and techniques also move among countries with increasing ease.

The integration of financial markets is particularly significant. Information and communications technology has, of course, provided the framework for globally-connected capital markets. Increasingly, however, investors around the world are using the same approach and criteria to make their...

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