6:30 AM Jan 15, 1996


Geneva 15 January (Chakravarthi Raghavan) -- "The manner in which the market economy has installed itself in the erstwhile planned economies or in the developing countries implementing reforms aggravates this menace. It brings to mind the worst of the savage capitalism of the 19th century. The need for jobs and monetary rewards and the weakness of the State are such that quite often individual rights and those of workers are over-ridden rough-shod. Corruption and violence are rife. Highly polluting factories are exported without any regard for the environment or public health. Certainly there is growth, but not the kind of high quality growth that one wishes to encourage. Of what use is this globalization that ignores all ethical norms or the law?"

Words of an unreconstructed east European communist, Southern NIEO radical nationalist or a no-holds-barred political demagogue in the North running for an election?

No, read on. These are words from a high priest of the Market God.

"Added to this picture is the danger that commercial conflicts exacerbate the multiplication of illegal economic practices and the eruption of financial crisis. Is it not enough to remember that atleast on three occasions during the last decade, the world economy was shaken by over-indebtedness, by wild fluctuations in exchange rates and waves of speculation? The latest, the Mexican crisis of 1995 - the fourth - was a strong revelation of the financial risks of globalization."

The speaker: Michel Camdessus, Managing Director of the International Monetary Fund (IMF), speaking in Rome on 30 November last at the Institute International Jacques Maritain at the 'Colloque International Economia pour Quel Avenir?'. Camdessus was giving an introductory address at that colloquium and speaking on 'Strategies and Economic Institutions for a Global Village'.

To be fair to Camdessus, he spoke the words cited in the context of the risks of Globalization in the world economy, of the opportunities and the problems and the 'many risks'. Globalization, he said, provided many chances for the developing countries, but also many risks as many people could get marginalized.

Even in France, Camdessus said -- and this was before French public sector workers took to the streets to protest and reverse the 'reforms' sprung on the public as needed to save France under globalization -- there are many problems and people are very worried about what is going on. Even in France where people favour globalization, there are worries that the rich are getting richer and the poor poorer, he added.

"What is one to think of this admixture of change and danger? Is the expectation that the dynamics of globalization will serve to unify the world, a more fraternal world, a mere chimera? Or can one still believe like Pere Teilhand de Chardin that 'God himself draws men and reaches out to them through the unifying process of the Universe?' To each his own heart-felt conviction! As for me, I would draw inspiration from another illustrious Auvergnat (from Auvergne, a region of France), Blaise Pascal - 'one has to take a risk'. I bet these are the signs of the times as spoken by St. Matthew - a new opportunity given to our world. One has nothing to lose in taking up this challenge and devote great energy for constructing a unified fraternal world."

Alas, in his speech at the Rome colloquium, Camdessus did not advance any new ideas for reforms to the systems or for actions, national and international, to curb the excesses of 'the market', but said: "The signs of the time do not reveal marvellous solutions for world problems."

The content of his speech on economic policies and instruments was more or less the same mixture about adjustment, getting the prices right and other neo-liberal economic reforms, the recipes that people have been assured for several years now, will create growth and the jobs for reducing unemployment that will take the world to a new Eldorado.

Rather, Camdessus spoke of "humanizing the dynamics of globalization in bringing to maturity all the germs of growth and accrued solidarity, at the same time containing the forces of marginalization."

He spoke of the needs of competitivity to be combined with solidarity... of Global solidarity that could not be limited to people who sacrifice the surpluses of what they have, but go much beyond that. And adverting to the values at the heart of the Christian conception of man, he spoke of the responsibility of each country to realise its own destiny and bring its irreplaceable contribution to the common good, and solidarity for harmonizing logistics of competition and cooperation.

A technocrat who served as Governor of the Central Bank in France in the socialist government during the first Mitterand Presidency, Camdessus moved to Washington for the IMF top job, when a conservative government came to power in Paris.

Soon after he took over as head of the IMF, the then UNCTAD Secretary-General, the late Kenneth Dadzie, met him and discussed the Third World debt crisis and put across the UNCTAD view that the debt was unpayable and uncollectible and some write-offs should be a central element of a long-term debt restructuring policy if arrested development in the South is to resume. Camdessus listened to the arguments and did not dismiss them offhand.

As Dadzie told this writer later about the conversation, Camdessus personally agreed, but said "these are thoughts I can afford to have only on a Sunday".

Camdessus's speech on globalization, on the market economy and its effects on the South and the former East, on competition coupled with solidarity, and Christian values, was in his individual capacity. It was delivered in Rome, but on a Thursday and not a Sunday.

In a speech a fortnight later in Washington, at the Society for International Development, where he spoke about Africa and the Challenges ahead, Camdessus described his job as "missionary-in-chief to sell structural adjustment gospel".

He spoke of globalization being the 'first challenge', recited the Mexican experience as indicative that the world was already in the 21st century, about larger capital inflows and higher investment, improved technology and expanding export markets showing globalization offering considerable opportunities to accelerate economic progress throughout the world, but that countries unable to adjust enough to integrate themselves into the mainstream of global economy risk marginalisation.

He then presented the challenge before Africa as the same for every other country: to pursue an adjustment strategy that enhances the prospects of benefiting from globalization, while avoiding the risks.

He spoke of establishing domestic economic security for improving international competitiveness -- getting economic fundamentals right, of establishing an institutional framework to provide confidence for both domestic and foreign entrepreneurs to invest, pursuing reasonably consistent policies for a critical mass of reforms (to assure irreversibility of reforms).