Unrestricted globalization would lead to disaster

by Thalif Deen

New York, 28 Jan 2001 (IPS) -- UN Secretary-General Kofi Annan Sunday told a gathering of world economic and political leaders that unrestricted and unregulated globalization can lead to unmitigated disaster worldwide.

“My friends, the simple fact of the matter is this: if we cannot make globalization work for all, in the end it will work for none,” he warned the World Economic Forum in Davos (in the text of his prepared speech released in New York).

Annan said the unequal distribution of benefits and the imbalances in global rule-making which characterise globalization today will inevitably produce a backlash and growing protectionism.

“And that, in turn, threatens to undermine and ultimately unravel the open world economy that has been so painstakingly constructed over the course of the past half-century,” he noted.

Annan said: “Try to imagine what globalization can possibly mean to the half of humanity that has never made or received a telephone call; to the people of sub-Saharan Africa, who have less Internet access than the inhabitants of the borough of Manhattan (in New York city).”

In its latest annual report released Wednesday, the Geneva-based International Labour Organisation (ILO) said that nearly 90% of all Internet users are in industrialised countries, with the United States and Canada alone accounting for 57% of the total. In contrast, said the ILO, Internet users in Africa and the Middle East together account for a measly 1% of global Internet users.

“The creation and loss of jobs, the content and quality of work, the location of work ... all are affected by the emerging era of digital globalization,” ILO Director-General Juan Somavia said Wednesday.

“Let’s strip out the hype,” said Somavia, speaking of the digitalised global economy. “What’s left is its effect on people’s lives, wherever they live. We need to promote policies and develop institutions which will let everybody benefit. And it won’t happen on its own.”

The UN Millennium Summit, the General Assembly heads of state meeting held in New York last September, attempted to take a fresh look at the core priorities for the United Nations in the new century. “None was ranked higher than the need to make globalization work for all the world’s people,” Annan told the Davos meeting.

“You in this hall may take for granted that it can and will. But it is a much tougher sell out there, in a world where half of our fellow human beings struggle to survive on less than two dollars a day; where less than 10% of the global health research budget is aimed at the health problems afflicting 90% of the world’s population.”

Annan was also critical of the sense of priorities of rich nations.  “How do you explain, especially to our young people, why the global system of rules, at the dawn of the 21st century, is tougher in protecting intellectual property rights than in protecting fundamental human rights?” he asked.

Last year, Malaysian Prime Minister Mahathir Mohamad warned that globalization - which also calls for liberalisation and open markets - is killing some of the fragile economies of the world’s poorer nations.

Mahathir, who heads a country whose economy was nearly devastated by Western currency speculators in the 1997 financial crisis in Asia, admitted that the unrestricted flow of goods and services across borders may be good for a while. “But eventually it will destroy markets and result in contraction of world trade. The world would actually become poorer because of free trade,” he said. Developing nations are at a disadvantage of not operating on a level playing field, he added.

The Secretary-General once again made a strong case for his Global Compact, introduced at the Davos Forum two years ago, in which business leaders have been invited to join hands with the United Nations in building infrastructure, promoting development and protecting the global environment. He said the Compact has so far inspired many tangible projects, ranging from investment promotion in the world’s 48 least developed countries (LDCs) to human rights promotion in and around the workplace. “But there is much more that we can do to ensure that the opportunities of globalization are more widely enjoyed and appreciated,” he added.

To participate more effectively in the global economy, he said, developing nations need, above all, faster and more generous debt relief; increased official development assistance (ODA), carefully targeted to make poor countries more attractive as investment destinations; and the full opening of rich countries’ markets to poor countries’ products.

[Meanwhile, according to a press release from the Berne Declaration, at a panel discussion on global governance at the NGO-organized counter to the World Economic Forum at Davos, the ‘Public Eye on Davos’, Peter Bosshard (Berne Declaration, Switzerland), spoke on the paradox that in the last 20 years, democracy had been universally accepted as the legitimate model of governance, while its substance was increasingly eroded by a variety of trends. More and more, neoliberal economic thinking and the dependency on international financial markets stipulated that for national governments and societies, there was only one choice for economic policy - ‘and thus no choice.’. At the same time, relatively democratic and transparent institutions such as those of the UN system were weakened, and their role was taken over by financial institutions dominated by the North, or by private institutions such as the World Economic Forum (WEF). “It is ironic that in 2000 President Clinton called on the WEF to provide a vision for governments, while at the same time starving the UN or the World Health organization of resources”, Bosshard said.

[Martin Khor of the Third World Network, explained how international economic policy was governed by institutions which served the interests of large corporations and banks, particularly by the IMF and the WTO.  Khor demonstrated how during the Asian financial crisis, the Fund had pushed through policies which turned out to be completely inadequate, but which served the interests or foreign corporations by breaking open local markets. Those countries which did not fall under the IMF’s adjustment programs were meanwhile disciplined by the WTO. “The world is not ruled by a military-industrial complex anymore, but by a Wall Street-Treasury-IMF complex”, Khor concluded.

[Khor, Bosshard and Victoria Tauli-Corpuz of the Tebtebba Foundation in the Philippines, all challenged the notion that there was no alternative to economic globalization. Tauli-Corpuz pointed out that there were many alternative models of production and distribution which had been sustained on the local level for a long time. It was not a question of natural law, but of political choice whether such alternatives were protected and further developed, or whether policies of further economic globalization were promoted. Drawing from the recent experience in the Philippines, Tauli-Corpuz said that international networking of NGOs and movements could create the peoples power and political will to challenge globalization policies. Khor and Tauli-Corpuz agreed that the ‘Public Eye on Davos’ was an important and timely example of such networking.

[The first day of the ‘Public Eye’ conference, the Berne Declaration press release said was attended by about 100 people. Many people - and even journalists - who wanted to attend the conference were prevented from reaching Davos by the police. Students who distributed the ‘Public Eye’ program in Davos were arrested without any legal basis. The ‘Public Eye’ organizers protested against these arbitrary and undemocratic actions. Instead of ‘Bridging the Divides’, the theme of this year’s World Economic Forum should really be ‘Building the Roadblocks’, Peter Bosshard commented.] – SUNS4824