UN MUST SET NORMS,FRAMEWORK OF GLOBALIZATION

5:46 AM Apr 4, 1997

UN MUST SET NORMS,FRAMEWORK OF GLOBALIZATION
New York 3 Apr (TWN) -- Globalization linked to liberalization, which has been institutionalized in the World Trade Organization, is a major process, under way in the world economy, that has been left to proceed on its own, and is characterized by uneven global development -- with significant growth and benefits for a few countries and marginalisation for the many.

And whatever the pros and cons of this process, globalization is no panacea for the problems facing the world, and in particular the developing countries, nor could a particular romanticized view of this process in the past be used to set prescriptive norms that countries must abide by.

This was a general view that emerged at a Round Table, organized by the Third World Network and the Group of 77 at the United Nations here on "Globalization, Sustainable Development and the South".

The views on globalization and the role of the United Nations was the principal theme of the speeches at the opening ceremony of the Round Table, as well as at a session devoted to the subject, setting the tone for the subsequent discussions at the Round Table.

Other sessions addressed recent developments in the WTO and the multilateral trading system, the assessment of environment and sustainable development, five years after Rio and the critical environment and development issues before the Commission on Sustainable Development and the subsequent special session of the UN General Assembly in June.

Among the participating panellists and speakers were the Chairman of the Group of 77, Amb. Daudi Ngelauktwa Mwakawago of Tanzania, Mr. Martin Khor, Director of the TWN, the President of the UN General Assembly, Amb. Razali Ismail of Malaysia, and Mr. Nitin Desai, Under-Secretary General of the United Nations for the newly created department embracing all the economic and social sectors, Brazil's Permanent Representative, Amb. Celso Amorim, Mr. Chakravarthi Raghavan, Chief Editor of SUNS, Mr. Bhagirath Lal Das, former head of UNCTAD's Trade Programme and advisor on trade to the TWN, and Mr. Carlos Correa of the Buenos Aires University and former vice-minister of Argentina, Vicky Tauli-Corpuz of the Philippines and a leader of the Indigenous Peoples Movement, and Charles Abugre, Director of the TWN Africa Regional Secretariat.

The speakers and panellists had some differing perceptions of the globalization process, driven by neo-liberalism and subserving the interests of the transnational corporations, its durability and whether or not it was irreversible.

But all or most of the speakers were agreed that globalization could not be made into prescriptive norms, and that nations of the world, and particularly the developing nations, should look at it carefully and see how international actions and measures could be taken to maximize any benefits and minimize and eliminate elements that contribute to the marginalization and impoverishment of people.

All the speakers and most of the participants, were agreed that the issues raised by globalization should be addressed, and the United Nations was the proper forum to address all aspects of this -- economic, social, cultural etc -- and that the United Nations must set out the framework and the guidelines under which the process could move forward.

The UN General Assembly President, Amb. Razali Ismail of Malaysia, said that globalization had been institutionalized by the Uruguay Round Agreements and the WTO. There had been winners and losers in the Uruguay Round, and Africans were among the losers.

Razali suggested that the Group of 77 should use the opportunity of the forthcoming session of the Commission on Sustainable Development and the June Special Session of the General Assembly, to review the implementation of Agenda 21, to ensure reaffirmation of the Rio commitments and set in motion a process to set the framework for the Globalization process and ensure the world becomes 'global'.

Citing a wide variety of academic studies and writings, to question the romanticized view of history of liberalism of the 19th century and the myths surrounding the current versions of globalization and neo-liberal economics, Raghavan said, the globalization process was being pushed in the name of the free market and free trade by the Bretton Woods Institutions and the WTO, even as the industrialized North and the major powers were in fact, pursuing neo-mercantalist policies to advance the interests of their corporations. The BWIs and the WTO had become manipulative instruments to advance the interests of the United States, Europe and the other major industrial nations, he charged.

Laissez faire prevailed in the world economy of the late 19th century only for a brief while, and came to an end on the Continent when France and Germany discovered that laissez faire did not benefit them and industrialization needed a state role, Raghavan said, and ridiculed the romanticized view of this period of history presented by the BWIs, WTO and the so-called mainstream economists.

Britain preached liberal economics, and advocated free trade, in the 19th century, only after it had established a powerful productive apparatus through capital accumulation from mercantilism and colonialism. And now Europe and the US preached neo-liberalism and free trade only in areas of advantage to them -- financial and telecommunication services, information technology etc -- but not in agriculture, or steel, or textiles and clothing, footwear and other labour-intensive products.

Razali said, whether one liked it or not, "globalization is a fact of life and we have to deal with it." In the UN, said Razali, globalization is used as a buzz-word in a rather loose fashion. Unfortunately, it is being equated to globalizing markets and the power of the private sector. The UN, he said, is the natural venue to look at the normative aspects of globalization.

Razali added that the previous UN Secretary-General, Mr. Boutros Boutros-Ghali, had talked about need for globalism - a term which included pluralism and need for safety nets etc.

UN Under Secretary-General, Nitin Desai, underlined that not only were economic issues involved in globalization, but also social, cultural and others, and all these had to be addressed in an integrated way at the United Nations.

Amb. Celso Amorim, who was a discussant at the session, said he agreed with Raghavan that globalization should not be seen as a panacea or a normative prescription. Globalization has the same destructive creativity that characterized capitalism, and generates both problems and solutions.

"We should ask ourselves about post-globalization. Our task is not to question whether globalization is good or bad, but how we can put it to serve our own ends of social justice, equity, etc."

Raghavan said, while the 1980s has been viewed in retrospect as a "lost decade" for Development, seven years into the 1990s, and five years after the Rio UNCED Summit, "it seems we have lost development altogether to globalization and neo-liberal economics, which is preached but not practised in the North, where neo-mercantilism is the reality hiding behind 'free trade and free market' slogans."

While the term globalization was used in mid-1980s to describe a process already under way, and involving complex elements of production, consumption, investment, technology, and trade in goods and services, it has gradually become a term to prescribe a normative strategy of development for developing countries, one of rapid integration into the world economy, he said.

And the Bretton Woods Institutions and the 2-year old WTO, under the guise of promoting the free market and free trade were in fact, promoting a particular form of globalization, namely, one of rapid integration into the world economy through the instrumentality of transnational corporations, he added.

While these institutions were thus promoting the interests of the TNCs based in the major industrial countries, and through non-transparent and undemocratic decision-making processes, the United Nations was being sidelined. The UN and its specialized agencies were being discouraged or stopped from addressing the core issues of economics, and this is in clear violation of the UN Charter, and particularly Chapters IX and X of the Charter.

Under the guise of budget constraints and need to economize, the UN and its institutions were being starved of funds. And while the UN and agencies, to persuade its biggest debtor to discharge its Charter obligations, was undertaking reforms and under this guise, the essential programs and activities in the core economic sectors were being abandoned, the BWIs and their staff continue their high-life styles - as exampled by the recent revelations about the gold-leaf panelling on the executive dining room at the new World Bank headquarters in Washington DC -- even while the Bank, Fund and their economists prescribe for developing countries, a "one-size-fit-all" policy package of perpetual belt-tightening.

This was increasing the numbers of the poor and problems of poverty and inequity everywhere for the majority of the people, while a few become richer and richer.

While this type of "globalization" was being presented as an unstoppable phenomenon and something new, there have been a number of studies and writings by eminent economists, to how a similar process had in fact taken place in the last century too.

While there are some new elements involved now, nevertheless it remained true that the process and the particular form of globalization and integration of markets was the result of international rules of the game, and the actions and inactions of governments at national and international levels, and they could act to reverse the process and cure the bad and negative aspects of this process, he said.

At the beginning of the 90s, there had been an element of euphoria in the major industrial centres about neo-liberal economics and globalization, and developing countries and their peoples who were impoverished and marginalized were blamed for the marginalization.

But with high unemployment, and structural at that, gripping the North, there had arisen recently a strong backlash against globalization, and the problems of the North were being blamed on trade with the South and low-wage imports, whereas studies in UNCTAD had shown that the real cause of the unemployment is the macro-economic stance of the North and the over-emphasis on controlling inflation.

In response to the protectionist pressures, the governments in the North were trying to accommodate these pressures, by raising issues of social clause and environment norms, and through spurious theories about "fair trade" to justify their own protectionist actions, like anti-dumping and countervailing duties.

This was taking place at a time when developing countries have opened up their economies and trying to integrate themselves into the world economy. To do these, they need for many years to come, substantial financial flows from the North.

But with official aid continuously dropping, and private flows going to only a few, the vast majority of the developing countries are being marginalized. Their ability to export and earn essential foreign exchange was being impeded by restrictions on imports of labour-intensive goods and services.

This was an untenable situation and sooner or later, will have serious negative impacts on the WTO and its multilateral trading system.

History did not come to an end with the collapse of the Berlin wall, and geography had not become irrelevant, despite the romantic views about globalization or the El Dorado awaiting the faithful in the future, Raghavan said.

Liberalism collapsed in Britain in the early part of this century when popular support vanished in the face of rising unemployment and hardship and inequities. A similar situation was now arising for neo-liberal economics and globalism, and unless steps were taken to tackle the deficiencies, the neo-liberal economics too would collapse, and in the near future.

Amorim, commenting on Raghavan's presentation, said that three myths about globalization need to be dispelled.

Firstly, there is the myth that globalization is homogenous and would benefit everyone. In reality, it did not extend to all countries and it increased inequality. And when it is equated to liberalization, it is also not balanced.

Developing countries are asked to restrict their freedoms, for example, in IPRs and also on investment. At the same time, the North does not have the same attitude in other agreements, for example, in agriculture.

Secondly, it was a myth that with globalization the state can be dispensed with. Although private capital is welcome, it has not proved to be attractive in areas such as environment and education.

"The state has a role to play, for example, to ensure that the markets are integrated in the right way. The state still has an important role in trade policy and it is not true that states are willing just to allow for liberalization of their economies. For example, the US trade law, is a trade war machinery, he said.

The third myth is that unrestricted financial flows bring along freer trade and prosperity. The reality is different, as shown by the Mexico crisis. Complete freedom of capital can cause volatility and this in turn, can lead to more protectionism.

Amorim concluded that the real task was not to be for or against globalization. "The real task for developing countries is to face a double challenge: how to mitigate disruptive activities against the CSD, and how to garner energy arising from globalization and make use of it in our favour."

Mr. Denis Benn, Director of UNDP's Special Unit on TCDC, who chaired the initial session devoted to globalization and development, said that Raghavan had made an important point about the 19th century free trade and its links to colonialism and prior British industrial revolution. These elements had to be borne in mind in formulating sustainable development, and policies and measures towards this end, he said.

Razali had earlier noted the differences between the industrial countries and the developing world on such things as definition of "sustainable development", "sustainable growth" etc.

Referring to this, Mr. Bhagirath Lal Das said that while the developing world and the developed were arguing in New York about these, at the WTO, the developed countries - whether the US or Europe or Canada or anyone else - had no doubt and pushed for "economic growth" (for themselves), and for access to the markets of the South, and new issues and agendas that would further this.

Developing countries had missed an important opportunity at Singapore in not insisting on the problems of implementation being addressed, and decisions taken.

At least now, he said, they should prepare themselves and put forward a number of proposals for changes in the rules, and these should be presented for the next Ministerial meeting which will take place in 1998.