8:31 AM Apr 8, 1997
UN: GLOBALIZATION UNDERMINES SUSTAINABLE DEVELOPMENT
New York 8 Apr (Martin Khor) -- Ministers and senior officials of UN member-states gather this week at the high level segment of the Commission on Sustainable Development, and they will be doing so under the shadow of globalisation trends which have set up serious obstacles to tackle development or environment problems. The CSD meeting and its outcome will lead into the UN General Assembly Special Session in June, which is to review the implementation of Agenda 21, five years after the 1992 Earth Summit. Many UN and government officials privately agree, that the deteriorating situation after Rio has been due to the rise of neo-liberalism and its pattern of the globalisation process. This trend has undermined the concerns for development and environment and has rendered "sustainable development" a concept without any content for implementation. The UNCED approach represents one paradigm for international relations: that of consensus-seeking, incorporating the needs of all countries (big or small), partnership in which the strong would help the weak, integration of environment and development concerns, the intervention of the state and the international community to control and regulate market forces in public interest so as to ensure social equity and bring about more sustainable patterns of production and consumption. The neo-liberal "free market" approach represents a different paradigm. It advocates the reduction or elimination of state regulations on the market, allowing "free market forces" to prevail, and providing a high degree of rights and "freedoms" to the large corporations that dominate the market. The state should intervene only minimally, even in social services. On the environment, instead of intervening to impose environmental controls or regulations, the market is to be left free on the assumption that this would foster growth and the increased resources can be used for environmental protection. Such an approach sidelines equity concerns or the negative results of market forces, such as poverty and non-fulfilment of basic needs. It assumes the market will solve all problems. Extended to the international level, this requires liberalisation of international markets, breaking down national economic barriers, enhancing rights to corporations to sell and invest in any country of their choice without restraints or conditions. Governments are not to interfere with the free play of the market, and social or development concerns (including aid to developing countries) are downgraded. Such an approach means a Social Darwinian philosophy of "each man for himself, each firm for itself, each country for itself." In this neo-liberal law of the jungle, it is the right of individuals and companies to demand freedom to seek advantage and profit and to have access to the markets and resources of other countries anywhere in the globe, in the pursuit of their right to profit. The advocates of this approach want a free-market system where the strong and "efficient" are rewarded, and the weak or inefficient may suffer losses but in any case should fend for themselves. The paradigm advocates competition, with winners-take-all, but with no cushion to compensate the losers for their loss. Aid and special treatment for developing countries is downgraded. In the past five years after Rio, there has been a dramatic clash of these paradigms in international affairs. The paradigm of partnership and cooperation was represented by the United Nations series of world conferences, in which global problems were sought to be discussed and resolved in a framework of consensus-seeking. It was recognised that the market left to itself could not solve the problems and would indeed be a hindrance, and that governments, the inter-governmental community as well as NGOs and citizen groups have a critical role to play -- to temper the market with social and environmental priorities and programmes. The need to build the capacity of the weak and poor was accorded priority, and the role of aid and differential treatment for them was recognised. In contrast, the free-market paradigm has been pushed by the Bretton Woods institutions, which despite their major failures, have persisted in promoting structural adjustment programmes based on market liberalisation, and by the GATT/WTO which is dominated by the Northern governments advocating the opening up of markets (especially of developing countries) for the exports and investments of corporations and financial institutions. The conclusion of the Uruguay Round and the signing of the Marrakesh agreement in April 1994 heralded a new era where multilateral trade agreements and negotiations would subject countries much more to the objectives of Northern governments advocating greater and wider "market access" for their corporations. The Uruguay Round agreements and the paradigm they represented have turned out to be more powerful than the UNCED agreements and products of 1992 and the partnership approach which they promised. Indeed, in the past five years, the liberalisation free-market paradigm, that gained prominence and pre-eminence, has undermined the sustainable development partnership paradigm, which has been sidelined in terms of importance. The market paradigm had strong instruments for implementation: in the Bretton Woods institutions, structural adjustment can be enforced as conditions for much-needed loans; in the WTO system, the Agreements and rules are enforceable through a powerful dispute settlement system which includes trade penalties and retaliation. In contrast, the partnership paradigm has been deprived of its main means of implementation -- financial resources and technology transfer. The main factor for the triumph of the market paradigm is the strong support and aggressive advocacy of it by the powerful countries, and their deliberate marginalisation of the partnership paradigm. Within these countries, the Commerce and Finance departments of government enjoy far greater influence than the Environment or Overseas Aid departments. This has contributed to the far higher priority given in these countries to national and private commercial interests vis-a-vis environment and development concerns. In recent years, the Northern countries have also successfully downgraded the role, resources and influence of the United Nations in social and economic affairs and policies, while enormously increasing the powers and influence of the BWIs and especially, the WTO in determining international economic and social policies. With the higher status of the market paradigm, sustainable development concerns have been given lower priority. Governments of strong countries have become obsessed with competitiveness of their firms and countries; this has reduced the commitment to improve the environment and change production and consumption patterns. Deregulation has weakened environmental policies (or their enforcement) in many countries. Interest in implementing the development components of UNCED (and of other Conferences such as the Social Summit Conference) has diminished. The means for implementation of the many action proposals have not materialised. A major reason why the UNCED objectives have not been realised is the fact that the behaviour and practices of the main economic players (that determine production and consumption patterns) have not been brought under any kind of effective framework of accountability and disciplines. UNCED was itself partly responsible for this, as it did not propose any measures for regulating big corporations. In the past few years, the power of big corporations has increased: they control even more of the world's resources and account for a greater share of production activities, distribution, finance and marketing.There has been no noticeable change in their production patterns. The "business as usual" practice has resulted in continuation or even intensification of environmental pollution and resource depletion. Through globalisation of media, their advertising and sales promotions of consumer products and tastes have had an even much greater impact in spreading the kinds of lifestyles and consumption patterns that are environmentally unsustainable. The regulatory situation relating to TNCs and business in general, has worsened greatly in the past five years. The efforts to finalise a Code of Conduct on TNCs were formally killed in 1993, and the agency in charge of the Code, the UN Centre on Transnational Corporations, was closed down. Thus, the main international initiative and institution for establishing guidelines (non-binding at that) for the behaviour of TNCs, and that would lay down a code of obligations and rights of TNCs and states, have disappeared, and many years of work and negotiations have come to nought. Other initiatives such as the UNCTAD one for a Code of Conduct on Technology Transfer has been abandoned, and the UNCTAD Set of Principles and Rules on Restrictive Business Practices of 1980 remains a voluntary code without any teeth. Instead, there has been a strong opposite trend to reduce and remove more and more regulations that governments have over corporations, to grant them increased rights and powers, and remove or reduce authority of states to control their behaviour and operations. The Uruguay Round has already granted far higher standards of intellectual property rights protection to the TNCs, thus facilitating further their global monopolisation of technology and ability to earn huge rents through higher prices. There are strong pressures from Northern governments at the WTO to grant foreign companies the right of entry, establishment and national treatment in all WTO member states. Other proposals on competition policy and government procurement would give them further rights of access to business in developing countries. The ability of governments to regulate the operations and effects of TNCs and companies in general is being severely curtailed. Since it is most unlikely that businesses will voluntarily curb their own practices so as to be in line with sustainable development, especially since there is now an intensification of competition, the removal of the rights of states to regulate business, especially TNCs, is a major and perhaps fatal blow to the international community's attempt to arrest environmental deterioration and promote sustainable development. The recent years have also seen the weakening of political leadership in almost all countries in their attempts or ability to address environment, social and development issues. In the North, the political leadership has followed the rationale of "competitiveness in a globalising world" to place environmental and social concerns much lower on the list of priorities. Instead, these governments are meeting the demands of their corporations to promote liberalisation and to champion their interests domestically and internationally. Thus, at international negotiations, whether at the WTO or at the UN, Northern governments promote proposals that widen the rights of TNCs, whilst blocking or diluting principles that promote development. In the international arena, Southern governments, individually or as a group, are inadequately prepared for negotiations, compared to the Northern governments. Despite the dramatic expansion of the importance of international organisations and processes in determining national policies, the political leadership and bureaucracy in most developing countries have not put adequate human and financial resources in preparations for international negotiations. As a result, they often find themselves weakened and unprepared in the negotiations. This can sometimes lead to their being unable to effectively promote their points, and to having to agree to other points that are detrimental to their interests. Such a situation is particularly dangerous when the negotiations involve legally-binding agreements, as in the WTO. Many political leaders and bureaucrats privately agree that the present state of affairs on environment and development is negative and requires drastic reforms. However, they go along with the big tide of liberalisation and catering to the demands and interests of the business elite. Many have declared that they are unable to change the situation, and that the forces of liberalisation and globalisation are too strong to counter. Despite this rather bleak picture, there are also positive developments in recent years that keep the hopes for sustainable development, and the spirit of Rio, still alive. These include: * The still influential role and substantial resources of the United Nations system, despite its budgetary crisis and the attempts to blemish its image. The UN enjoys popular support, mainly because of its socially and environmentally positive positions, and its efforts to promote international cooperation. The partnership paradigm represented by the UN is thus still very much alive where the public are concerned. * The series of World Conferences organised by the UN and its agencies in recent years has had a positive public impact in highlighting a wide range of global problems, and provided opportunities for a focusing on the existence of the problems, their causes and proposals for action. They were also opportunities to advocate or reassert approaches and views that are counter to the dominant liberalisation and globalisation dogma. Thus they have built a useful foundation which can contribute greatly to future work and activities. * The past few years have seen continued and in some cases, strengthened activities of citizen groups that represent alternative approaches and paradigms to promote social and environmental causes. Particularly positive, has been the increased networking and collaboration among the groups in North and South, and a cross-fertilisation of interests in different issues, including environment, development, human rights, women's rights, culture and social problems. The emergence of global civil society, advocating alternative viewpoints at international fora and to international institutions, is an important development that can monitor and help shape the globalisation process. This remains a significant hope for the promotion of sustainable development. * The weaknesses, inequities and limitations of the globalisation model based on free-market interests are rapidly becoming evident. This has led to growing criticisms of the paradigm by influential members of the political, business, journalistic and academic establishment. The leaders and opinion makers of the system are themselves increasingly questioning and criticising the dominant policies and their effects. As the "consensus" on the orthodox approach breaks, the need to reform the globalisation and liberalisation process will become clearer. Despite such countervailing views and activities, the globalisation proponents have the upper hand at present and are thus able to block progress towards development or environmental goals. It remains to be seen whether the current CSD session and the General Assembly special session in July can begin to turn the tide, or whether sustainable development and the "spirit of Rio" will become another vanishing species. (This is the last of a two-part article. The first part appeared in SUNS No. 3958)