7:03 AM Jun 21, 1994


Geneva 21 June (Chakravarthi Raghavan) -- The 30th anniversary of the founding of the Group of 77 being observed this week at New York with a ministerial meeting of the Group, and celebrations at other centres, is nestling between other anniversaries and preparations for them -- 50th anniversary of D-Day, of the founding of the Bretton Woods Institutions, of the Philadelphia Declaration of the ILO, founded in 1919 as a response of sorts to the Russian Revolution and its "workers' state".

Anniversaries, more so decennial ones, become occasions for congratulations, nostalgia, reminiscences and, from time to time, some self-doubts and soul-searching.

The Group of Seventyseven's 30th anniversary, is no exception either -- the Group and its members are trying to find a raison d'etre for itself as the world moves towards the next millenium.

The world into which the Group of 77 was born is radically different from that of today. Many things have changed, but many old problems remain and several new ones have come up. The rich-poor gap has widened, poverty has increased and hunger is still stalking the world. Some diseases like smallpox have gone, but others like AIDS have taken their place.

The Group came into being on 15 June 1964, at the end of the first session of the UN Conference on Trade and Development which had been convened at the instance of the developing world and in response to its perception that the post-war economic systems -- the Bretton Woods money and finance systems and the GATT trading system -- were not responsive to the needs of the developing world and special policies and institutions to further them were needed.

As more and more countries became independent, more and more of them discovered that political independence was not being translated into good life for the people.

Though it is now fashionable to blame their failures on their economic dirigism, the economic policies in most of them came packaged from Washington, London or Paris. Rostow's "take off theories" and the MIT packaged development models shaped Third World policies more than Soviet models.

It was Raul Prebish, through his analysis and dependency theory based on the Latin American experience and which, with variations, was found to be similar to that of Africa and Asia, that conceptualised the problems and possible solutions. This led in 1963 to the convening by the UN General Assembly of the UN Conference on Trade and Development.

Prebish was by no means a Marxist, but a market-economist, who pointed out that while the market was useful as an efficient allocator of resources, it did not help unequals in the market who needed help, benefits and special treatment to be able to use the market.

The history of the founding of UNCTAD and of the Group of 77 on 15 June 1964 (when the seventyseven signatory countries issued a declaration setting out their common positions at the conclusion of the Conference) have been written about and published extensively. But it is perhaps worth remembering that in 1964 it was Raul Prebisch who appeared before the Latin American group (which at that time was reluctant) to advise them that it was in their own interest to join hands with the Afro-Asians and form a single developing country grouping.

The world in which the Group of 77 was born, though a world of military power blocs, was in fact beginning the process of moving away from confrontation -- Washington and Moscow having drawn back from the precipice during the Cuban missile crisis. Nevertheless the two were engaged in competition and rivalry for influence and power, and many in the Third World used that rivalry to find some 'space' for themselves.

It was also a world in which the West had reaped the benefits of the post-war economic system they had fashioned, the golden era of growth and affluence in the North. A moiety of that affluence had trickled down to the South -- merely whetting appetites but not satiating hunger.

Starting with appeals and pleas for special benefits -- that resulted in many promises, but no effective and sustained actions -- the Group of 77 moved towards calls for reform of the international systems. But, unfortunately, it was thought that rhetoric could make up for actions and that the G77 had only to enunciate demands for them to fall like manna from heavens.

The rhetoric of the New International Economic Order of the 1970s, and several other 'orders' that spewed forth from various international organizations and fora, and the failure of the group and subgroups within them, at every juncture, to use the limited leverages that were available and act collectively, are too painful a record for repetition.

Then came the 1980s (the change actually in fact began in 1979 when finance capital, with its demands for preservation of the value of the assets in the centres became more powerful than industrial capital) and the US Federal Reserve hiked up interest rates, resulting in real interest rates never before reached since Christ drove the money changers out of the Temple in Jerusalem.

This spawned the debt crisis with the Fund and Bank emerging as the debt collectors of the transnational banks and, with their conditionalities forcing the developing world to "adjust" to the needs of the North and adopt market and trade theories and policies that are preached, but never practised in the North.

Side be side, the North also launched the wide-ranging Uruguay Round of Trade Negotiations, involving areas of economic activity stretching beyond the normal meaning of 'trade' and encompassing areas within the sovereign jurisdiction of countries and their mix of choices. The negotiations were aimed at creating level playing fields for the transnational corporations and for transnationalizing national systems of production, trade and consumption.

By the time the negotiations ended, the world in which they were launched had changed -- typified by the tearing down of the Berlin wall, by the Gulf war and its aftermath, by the implosion of the Soviet Union into constituent republics and the emergence of the US as the sole Super-Power but no longer dominant in the world economy, the emergence of a unified Germany as the major power-house in Europe (and looking both to the west and to the east) and of Japan as an economic super-power and yet one so dependent on exports and vulnerable to pressures from United States and Europe.

But the initial euphoria with which the 'New Order' of the single super-Power was greeted -- Fukuyama's history has come to an end in the victory of liberalism -- has now given way even in the North to many doubts and the disorders and insecurity in the South, is creeping into the North too.

After initial resistance, one by one the countries of the South have opted for economic liberalism and, within the GATT trading system, have moved away from demands for special favours and privileges, and asking only for equality of treatment and elimination of discrimination.

But this too is still eluding them.

The new trade order -- the Marrakesh Agreement for a World Trade Organization and its package of agreements covering goods, including agriculture and textiles and clothing, services, and trade-related intellectual property rights securing global monopoly privileges for Northern corporations who hold industrial/intellectual property rights -- will still not end discrimination against the countries of the South and ensure equality among unequals.

Under this new trade order, the North will enjoy special treatment to protect its textiles and clothing industry for atleast another ten years, and its agriculture for much beyond.

The North has ensured a visa-less Fund/Bank/WTO laissez-passer for transnational capital while erecting new barriers to the movement of the other factor of production -- labour. It is also attempting to forge new trade instruments to discriminate against the South -- on the grounds of environment protection and labour standards.

Instead of the South's old argument that 'free trade is not possible among unequals', it is the North, and many of its think tanks, that now advance that idea and argue for erection of new trade barriers against the South -- on the ground of their 'unfair competition' through cheap labour or low social standards, or of their not sharing Western cultural mores of consumerism and overconsumption.

The doubts within the South about old groupings and the calls for new groupings are echoing views from the North that with the end of the bi-polar world and emergence of a single Super-Power, the Non-Aligned Movement has no role and should be wound up and that in a world of 'liberalism' and Alliance Capitalism centred around the Triad the Group of 77 has no role either.

The New Order and collapse of Soviet Super-Power, though, did not result in any similar calls for end to the North Atlantic Treaty Alliance. Rather NATO is sought to be given a new basis and politico-military theories are being formulated for its continuance and extension beyond the borders of Europe and North America -- and without a demur from the South in contrast to the outcry (of the 1950s and 1960s) which greeted John Foster Dulles attempts to extend NATO umbrella over French and Portuguese colonies in Asia and Africa.

New military concepts and security theories to keep up the military establishment and defence budgets of the North are being evolved. And protection of environment and preserving other people's forests or biodiversity and getting access to those resources is on the way to become a matter of 'national security' for the US and other major industrial powers -- thus escaping trade rules of the WTO.

Nor has the Organization of Economic Cooperation and Development, or its various subgroups (the G7, the G5 and the G3 etc) been wound up as unnecessary in a new world of 'liberalism'.

While the South is advised not to act collectively in such institutions like the GATT -- but form 'issue groupings' led by the North, ala Australian-led Cairns group -- or at the IMF and the World Bank, the North has always conferred and acted together visavis the South.

At every stage of the Uruguay Round negotiations, the Quad (Canada, EC, Japan and the US), and within them the US and the European Community, always met first both to resolve their own differences and to present a common front against the South. The G7, the G5 and the G3 periodically meet to lay down policies and programmes for the Fund and the Bank to follow.

The Ministers of the Group of 77 at the 30th anniversary meeting this week are expected to issue a call for resumption of the North-South dialogue.

But in fact the dialogue never stopped.

Only, after the endless forum game of the 1970s when the dialogue became a series of monologues with no conclusions, and after the 'softening up' of the South through the Fund/Bank structural adjustment programmes, there is the dialogue of the 1990s -- on the North's agenda and reflecting its concerns -- the soft issues of drugs, selective human rights, environment (safeguarding and maintaining the North's life-styles and improving the quality of its life, and free access to the South's resources and use of its carbon sinks), population etc in the UN.

The South 'adjusting' for the continued affluence of North is now in the GATT-IMF/World Bank.

The soft issues of the North will continue to be pushed via the Agenda for Peace and the Agenda for Development, while the South's agenda of hard economic issues which underlie all politics, nationally or internationally, will remain ignored until the South organizes itself and functions more effectively and collectively in the fora where the issues have been hijacked -- the GATT/WTO, the Fund/Bank -- and act to block the North's agendas.

Though the Fund and the Bank have lost their Bretton Woods legitimacy, and influence on the North and its policies, but function as the instruments of the North in the South and the former East, and formulating and forcing on the South their own development policies and strategies - rather than the original role of intermediating in the market to provide short- and medium- to long-term finance -- the developing countries continue to function in these institutions as donees and supplicants, rather than act collectively to safeguard their interests.

In the GATT, there never was a formal Group of 77 chapter -- only an informal group of developing countries that has largely functioned to name candidates for various posts, while avoiding the substantive issues in negotiations and with individual developing country members acting to prevent any common view emerging.

But whatever the merits of such individual functioning to gain market access in the old GATT, the new WTO trading system -- dealing, not with market access for goods exports, but a transnational production and distribution systems suppressing and superseding national systems -- has emerged as a forum of perpetual negotiations for shrinking national space in favour of global corporate interests.

The very nature of the GATT is such that the majors can talk about 'free trade' but practice neo-mercantilism. None of the theories of GATT economists or that of the Fund and the Bank, of unilateral liberalization welfare maximising benefits for the liberaliser, is ever practised by the industrialized countries themselves. The GATT in practice, has been a trade negotiation forum for bargaining for reciprocal exchange of trade concessions that are then multilateralized.

Whatever the merits of 'each for himself' in the old GATT negotiations -- for particular market access (tariff and non-tariff) concessions -- the costs of this exercise, individually and collectively, has been shown in terms of setting the rules of the game in the Uruguay Round of Trade Negotiations -- in the trading rules in goods, in services and in intellectual property regime -- where the major industrialized countries, whatever their differences among themselves, have been united in their common objective of opening up the Third World markets for their TNCs and for rewriting the rules of the game to prevent rise of competitivity in the South.

But the final outcome, the World Trade Organization and its annexed agreements on trade in goods, services and the new global intellectual/industrial property regime, has set the stage for perpetual negotiations -- with the North always the demandeurs and constantly rewriting the rules and the weak and dependent South unable to act together to prevent perpetuation of the colonial era international division of labour that, under the talk of interdependence and globalization, the new age of Alliance Capitalism centred around the Triad is forging.

How to reverse this prospect as the world moves to the next millenia, and how to ensure that the post-war decolonisation and independence of the South is not a mere interregnum, is the task and the agenda that faces the South on the 30th anniversary of the founding of the Group of Seventyseven.

It is a task that needs conceptualisation, and formulation of strategies and tactics. It needs effective functioning, not only in the UN and the agencies, but more than ever in the GATT/WTO and the FUND/Bank. It needs not a platform approach as in the first two decades of the G77, but a carefully chosen and selective agenda that can unite as many as possible, and not harm any.

It is a task full of challenges, but not insurmountable ones. It needs coordination firstly in national capitals -- with trade, industry, agriculture and foreign ministers acting together -- and collectively among governments in the international arena and the WTO/Fund/Bank institutions, and not merely improvisation by diplomats and negotiators on the spot.