5:25 PM Sep 21, 1995
MAHATHIR DOUBTS WTO'S BENEFITS FOR SOUTH
Penang, 20 Sept (TWN/Martin Khor) -- Malaysian prime minister Dr Mahathir Mohammed has cast doubts on whether the World Trade Organisation will be beneficial to developing countries in general. The Malaysian leader, who is an outspoken critic of the North's economic and political policies, also attacked traders and governments responsible for the turmoil in the currency market, which further impoverished the poor nations. "We are beginning to doubt that the WTO will be any more beneficial to the weak than the United Nations organisation has been," the Prime Minister said. "Might is still right and it will remain so until there is a radical change in the attitudes of the powerful." Speaking yesterday at the opening of a conference of the International Association of Seed Crushers (comprising major players in the international oils trade), Dr Mahathir criticised policies of rich countries that obstruct developing countries' efforts to improve their trade performance. The policies he criticised included the attempt to link trade with labour and social standards and the currency realignment exercise which raised some developing countries' debt levels. According to Dr Mahathir, linking trade policies with labour and social standards would prevent poor nations from achieving the social reforms that these conditionalities were supposed to bring about. Such a linkage amounted to a hidden barrier and an attempt to curb exports from developing to developed countries. "We should free ourselves from the need to hide behind such spurious tactics in the attempt to counter fair competition," he remarked. "We should be prepared to open up our countries to international trade within the agreed rules designed for fair competition." The Prime Minister also spoke on how the turmoil on the currency markets were impoverishing poor countries that could no longer control their currency levels. "The loss of sovereignty over one's own currency and manipulation by unscrupulous currency traders and governments is creating havoc, distortions and anarchy which hurt the poor particularly," he said. He gave the example of how Malaysia's yen-denominated debts had risen by over 300 percent as a result of the rising value of the yen. Besides the impact of debt, Dr Mahathir also spoke on how the yen appreciation adversely affected developing countries' terms of trade. Producers of raw materials had to sell more and more in order to pay for less and less manufactured goods, said the premier. He related the experience of Malaysia, which had turned away from dependence on the export of raw materials to avoid adverse terms of trade. Presently, however, its manufactured goods were also affected by the yen revaluation and the loss of GSP privileges long before the country reached the per capita income cut-off point. Dr Mahathir was referring to the recent announcement of the United States administration that Malaysia was no longer eligible for trade concessions under its general system of preferences trade programme. The Malaysian Premier also warned the rich countries that if they obstructed developing countries' growth, there would be spillover effects that would be against their own interests. He said the emerging nations were able to grow at a more rapid pace than Western economies, as they started from a lower economic base and had higher propensities for savings and investments. This growth would however be stunted if the developed world not only did not lend a helping hand but actually put obstacles in the way of developing nations. "The world is a much smaller place now and we are all close neighbours," Dr Mahathir remarked. "If neighbours are poor there will be a spillover effect into other countries, and one of the results will be the massive migration of the poor with all the attendant problems." He concluded that developed countries, which proclaimed themselves as world leaders and claimed the high ground on human rights and justice issues, should set a good example for the rest of the world.