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Forums, October 2002 Click on a link to see Past Forum notes: MAKING GLOBALISATION WORK FOR THE POOR THE EARTH SUMMIT IN JOHANNESGBURG: CAN WE CONVINCE THE U.S. TO JOIN THE MAKING GLOBALISATION This forum took place on: Do we need wreckers or reformers? Both speakers opposed the globalisation of financial markets, and global financier George Soros deplored the drive to export foisted on developing countries by the IMF. Caroline Lucas, Green MEP, agreed with that. Yet their disagreement was clear: can we reform our global institutions to respond to the challenges of disease and malnutrition, environmental degradation and social depravation, or is globalisation a relentless drive to the bottom? No one contested that globalisation does not currently work for the poor - but George Soros thought it could. A capacity audience at the fourth in the GLOBAL DEVELOPMENT FORUM's current series of Wednesday debates agreed*. Both internationalists, Soros and Lucas welcomed the exchange of ideas, technologies, culture and hospitality. But for Lucas, globalisation was a mono-cultural nightmare of disempowered citizens, the old national economies subsumed by corporate power, environmental and social standards sacrificed to profit. Free trade and intense competition have exacerbated poverty: the poor had prospered in the 1960s and 70s when regulations were tight, but per capita income in more than eighty countries is now lower than in 1980s. Even IMF statistics show that one fifth of the world's population has regressed. Soros broadly agreed on the date and even the consequences. He blamed the Reagan-Thatcher project to reduce the ability of the state to interfere in the economy by liberating capital markets. He judged it a success in their terms: governments must now compete for global capital with the only short-term assets they can offer: lower taxes and weaker regulation. Their ability to deliver public goods like health and education has been diminished, and inequality has risen. Yet a reduction in trade was not the answer. Politics may not have kept pace with economic change, but the remedy lay in strengthening global institutions to promote human rights, reduce corruption and ensure the international provision of public goods. Lucas would certainly refute the label of wrecker, but would sooner dismantle global institutions like the WTO and IMF than reform them. Her alternative is 'relocalisation'. Keynes was a liberal internationalist, but even he thought that goods and finance should be primarily national. If we are less dependent on exports, political control could be regained, and environmental and social concerns prioritised. Long-distance trade could be used where necessary, but the drive of policy would not be the expansion of trade but its reduction - an environmental gain in its own right. For Soros, trade benefited both sides. There were winners and losers, both within countries and between them. But the overall gain meant that the winners could compensate the losers. The fact that they don't is a cause of injustice, but a question of politics rather than economics. The main problem lay in the globalisation of financial markets, and the preference of capital for the wealthy centre over the poorer periphery. Yet these were problems that could be addressed by increasing poor countries' access to capital. He supported a Tobin tax on capital flows as a valuable source of new revenues, likening it to VAT on the transfer of goods and services, although it would do little to curb speculation. The IMF drive for export-led growth could be abandoned, particularly for primary products like foods where inelastic demand means that export prices fall as the supply increases. The WTO would ensure that US steel tariffs are eventually rescinded, even if trade in agriculture was biased by huge subsidies in the EU and US. These were still valuable institutions to have, and indeed should be strengthened. The leadership of James Wolfensohn at the World Bank shows how institutions can be reformed. In response to a question about labour rights, Soros's faith in reform faltered, at least for the WTO. Now that China had joined, there was little prospect that respect for labour rights would become a condition for trade, since the WTO operates on consensus. However its adoption of International Labour Organisation (ILO) standards could prove a Trojan horse akin to the USSR's acceptance of the Helsinki Declaration on human rights, which it too judged as largely irrelevant at time of signing. The ILO had authorised sanctions against Burma's use of slavery, although the failure of its members to implement them may speak volumes for the organisation's current effectiveness. Lucas rejected Soros's notion of international
trade as the exchange of goods by willing partners, arguing instead
that open markets were being imposed by the WTO, biased in favour of
corporate vested interests. But for Soros, isolationism would be regressive,
the remedy worse than the disease. Yet there is an important area of
agreement: both believe that the jurisdiction of economics and politics
should coincide if the poor are to benefit. The gulf between them is
whether that should be through the relocalisation of the world economy
that would reverse globalisation, or through the development of global
political institutions that ensure the poor reap the benefits of the
global economy. This forum took place on: Does the liberal agenda promoting human rights in developing countries fail to recognise the more pressing need for basic rights like food, shelter, healthcare and education? Are political and civil rights a western preoccupation, an irrelevant luxury when set against the immediate and life-threatening hardships faced by the world's poorest people? Chair David Goodhart, the editor of Prospect magazine, characterised the debate as a choice between the China model, where human rights come second to economic growth, and India, the world's largest democracy. Kate Allen, Secretary General of Amnesty UK, insisted that human rights are essential for all rather than the concern of those whose basic needs are already met. The poor, just as much as the rich, value the protection afforded by human rights. Their commitment to democracy could be seen in the long queues at South African polling stations or the electoral rout of Indira Gandhi after she had declared a state of emergency. She also rejected the notion that authoritarian regimes are better placed to ensure economic progress: Africa's fastest growing economy, Botswana, is a democracy. She argued that family planning in certain Indian states, through the education of women and a public debate, had been just as effective in reducing the fertility rate as China, with its coercive one child policy that has led to gender-based abortions. Boris Johnson, Conservative MP for Henley, was unable to attend due to a vote in the House of Commons, and his political researcher Matthew Pencharz stepped into the breach. He argued that the key to development is commerce, which could be fostered through guaranteed property rights and the rule of law. This could create the wealth needed for the provision of basic needs. He highlighted recent moves to give people in shantytowns title over their property, which would give access to credit and extend economic opportunities. He contrasted this with the arbitrary rule of Robert Mugabe, who has overruled Zimbabwe's judiciary to force through his programme of land reform. Contributions from the floor challenged this 'trickledown' approach to development. If the rule of law if sufficient, why does homelessness still exist in Britain? Kibbutzim demonstrate that property rights are not essential for economic development. Pencharz may believe that we need to focus on economic rights in order to create the wealth to fund basic needs, but this suggests that until such needs can be afforded, there is no right to them. His emphasis on the rule of law helps, insofar as it is important that no one, not even the state, should be above the law. However the rule of law is a prerequisite for any rights agenda, human, basic or economic, since without it, none can be enforced. The issue of enforcement produced some cynicism from the floor, with the suggestion that the west's emphasis on human rights rather than basic rights may be self-serving: governments in developing countries can be held accountable for human rights abuses, but who is responsible for enforcing, and funding, basic rights? Many poor countries cannot afford them, and by focusing on human rights, western governments can better avoid responsibility for funding basic rights. Moreover, since access to basic needs like food and education already feature in the Universal Declaration of Human Rights, there was little to be gained from a distinction between basic rights and human rights. The role of international institutions like the IMF and WTO were also questioned, as conditions on loans and debt relief to countries like Brazil undermine the choices of democratically elected governments. Allen insisted that human rights must apply not only to international institutions but also the corporate sector. She also highlighted a further flaw in the argument that authoritarian rule may be more suited to economic development: could a repressive regime be trusted to recognise when it was time to let go? At the end of the debating the audience voted on whether they would prefer to be a Cuban, enjoying universal access to basic services but few political and civil rights, or an American, with political rights but where millions lack access to services like healthcare and housing. The result was evenly balanced, although there was a strong sense in the meeting that these rights should not be placed in opposition, but that, as Allen insisted, political and civil rights were an effective means of ensuring basic rights for all.
This forum took place on: That Johannesburg is a disappointment was judged as inevitable by all those of the panel. This was highlighted by the chair John Gummer MP, who pointed out that the title of the debate had been chosen long before the Summit itself. Given the broad range, complexity and urgency of the issues surrounding sustainable development, not all interests could be satisfied even if the Summit had benefited from the unstinting support of the United States, and this was in fact very far from the case. According to Fanny Calder of the Royal Institute of International Affairs, the texts that emerged from the summit either contained flowery rhetoric but no concrete commitments, or were couched in such diplomatic language as to be rendered meaningless. Sir Mark Moody-Stuart, formerly of Shell and now chair of Business Action for Sustainable Development, took heart from the new recognition that business must be part of the solution, rejecting the call from Friends of the Earth for a global convention to control international corporations. Whilst global regulation is appropriate for some issues like climate change and trade, local and national governance and accountability are the key to driving up business standards. However Greenpeace's Charlie Kronick believed that the US had undermined the Summit, interpreting the challenges of sustainable development as a threat to its economic interests and reducing all agreements to the lowest common denominator. Kronick was further dismayed that, having watered down the agreements, the US refused to be bound by the conclusions of the Summit. Whilst welcoming the deal on sanitation, he highlighted the failure to achieve access to energy for the two billion people of the world who lack it, or to set targets for the use of renewables. Zac Goldsmith, editor of the Ecologist, attacked the summit as an extension of the corporate agenda of liberalisation and privatisation set out by the WTO in Doha last year. Privatisation reduced poor people's access to education, health and water, whilst liberalised markets undermined self-sufficiency in food production. He claimed that two billion rural people were being rendered destitute, unable to compete with the high levels of agricultural subsidies in the US and EU. However he argued that the biggest problem was the Summit's failure to address global climate change, at the insistence of the US government. The resulting environmental degradation will lead to mass migration and exacerbate existing problems of poverty and disease. If growth were the answer, then the six-fold rise in output since 1945, and the eighteen-fold increase in international trade, would surely have built a paradise, whereas in reality all the world's major problems had become more acute. According to him, sustainable development is a contradiction in terms, and the challenges of poverty and environmental degradation require a return to small-scale, decentralised agriculture and self-sufficiency, the exact opposite of the policies promoted by corporate interests at Johannesburg. Whilst Goldsmith believes the whole thrust of Johannesburg to be wrong, Moody-Stuart and Calder place their faith not in the formal intergovernmental agreements but in the informal, 'Type 2' partnerships between the UN, governments, NGOs and businesses. Moody-Stuart highlighted successful partnerships in areas such as mining, chemicals and forestry, and emphasised the importance of the global reporting initiative in defining appropriate indicators and standards that could both inform local legislation and provide benchmarks against which international businesses could be judged. Whilst concerned about the failure of governments to implements previous commitments, Calder argued that partnerships provide better analysis of both problems and solutions, fostering greater trust and increased commitment. Concerted action by NGOs in setting the agenda, governments in changing legislation, and businesses adopting best practice, could be more effective than if they act independently. The lively contributions from the floor tended to be more radical, sharing a suspicion that the business agenda was subverting the concerns of civil society. This view was shared by Kronick, who is wary of unequal partnerships where businesses drive forward the corporate agenda. Whilst Moody-Stuart welcomed the reaffirmation of the 2015 targets set in Rio, Kronick regretted that in the ten years since Rio a new agenda had not been set, reflecting a greater understanding of the challenges and the urgency of the problems. An opportunity like Johannesburg only comes once a decade. It is hard to escape the impression that recalcitrant governments and more assertive corporations have emasculated hopes that the process started ten years ago in Rio can lead to a fairer allocation of the world's resources, and protect us all from the consequences of environmental degradation.
This forum took place on: Does its history of immigration and its geographic isolation necessarily make the US inward looking, or does its apparent unwillingness to address world poverty reflect its belief in free trade as the solution and its suspicion that aid props up dictators? As concerns of US unilateralism abound from Kyoto to Johannesburg to Iraq, Prof Colleen Graffy, Chair of Republicans Abroad, faced an uphill struggle to convince the audience that the US was part of the solution to world poverty rather than the problem. The three other speakers largely despaired of America's willingness to address world poverty, although from different perspectives. Ziauddin Sarder, author of Why people hate America, argued that the US is a hyper-power of unprecedented global reach that creates world poverty by controlling global institutions like the World Bank, IMF and WTO, and structuring regulations to its advantage. He believed that its founding myth as a nation 'built by immigrants in search of a better life' gave the US a sense of its own righteousness that justified the vigorous pursuit of its own interests and made it less willing to help 'bad' countries. Yet the US is not monolithic, and Sardar pointed to the one third of the US workforce earning less than $8 an hour as a potential source of change. Journalist David Nicholson-Lord highlighted similar cultural reasons for the US's lack of concern about world poverty. He attributed Scandinavian countries commitment to development to their homogeneity: a shared language and religion, combined with a European history of invasion and war, enables a more sophisticated understanding. In contrast, diversity in the US requires a simpler debate that elevates the pursuit of wealth to a secular religion: the American Dream. Whereas Scandinavian countries meet or exceed the UN's aid target of 0.7% of GDP (compared with 0.3% from the UK), the US languishes at 0.1%. Yet US consumption requires considerable resources, with the ecological footprint of the average American equating to 9.6 hectares, compared with 5 for a European and 1.4 for Africans and Asians. For change to occur, we need a new, more sophisticated and internationalist America, where corporations have less power and its politics cannot be bought. For Mary Dejevski of the Independent, geographic isolation contributes to the US's ignorance of the world, and even of themselves. Few travel abroad, and communities are segregated by race and wealth, and bypassed by freeways so that the well-off are oblivious even to domestic poverty. There is also a deep suspicion of government and a belief that the voluntary sector is more effective, combined with a complacency that if other countries were more like America, they would be morally better and materially richer. Whilst 9/11 was a wakeup call that made the US worry about abroad, it is seen in the context of religious war, and not that America's self-interest lay in addressing world poverty. Graffy argued that trade and reform hold the key, rather than aid to potentially corrupt governments. Total aid from governments to developing countries is just $50bn, compared with $200bn of foreign direct investment and $2.4 trillion of export earnings. The key to development is to empower the poor through economic freedom, individual rights and the rule of law. Thus the Republican administration proposes a 50% increase in its aid budget, provided this is tied to reform. She claimed that if a country adopted economic reforms, every dollar in aid attracted twice that in private investment. Moreover, whilst conceding that US government aid is significantly less in terms of GDP, she insisted that US private aid amounted to over $70bn if remittances to relatives are included. Nicholson-Lord disagreed with Graffy that the success of countries like Singapore and South Korea was due to free trade, arguing instead that it reflected a form of state capitalism predicated on special tariffs as a post-war bulwark to communism. He highlighted the spectacular failure of free market economics, pointing out that the last two decades of deregulation had seen slower world growth. In fact there was a degree of consensus on the failure of either trade or aid in alleviating poverty over the last fifty years. However with the other three panellists seeing few real signs of hope, and Graffy seeing no need to change the Republican administration's existing policies, prospects of the US joining the battle against world poverty seem remote. |