Earth Trends by Martin Khor

Monday 14 May 2001

Take These Chances for South's Coordination

The visits by Cuba's President Castro and India's Premier Vajpayee,   as well as the Group of 15 Summit in Jakarta later this month, are opportunities for making South-South coordination of policies more effective.  These opportunities should be taken, for the developing countries need to move faster and more successfully, if they are to ever match the developed countries in the battle for the future of globalisation and global economic and social policies.


Last week, Cuban President, Fidel Castro, paid a visit to Malaysia together with a team of over 200 officials.  Among other events, he gave a three-hour lecture on globalisation and the international situation.

And he reiterated the need to be "rebellious"  against an unjust world system where developing countries are pushed around.

This week, the Indian Prime Minister Atal Behari Vajpayee will be visiting Kuala Lumpur.  This visit is aimed at cemeting ties on trade, investment and other joint projects including health care.

At the end of the month, there will be a Summit meeting of the Group of 15 developing countries.  It will discuss how the developing countries can work better with one another.

These visits and meetings are opportunities for Malaysia and other developing nations to get together and formulate collective positions and strategies for their development interests.

If they let slip the opportunity, or don't organise better, the developing world will be left further behind.

The world is fast moving, and most of the movement is generated by the developed nations and the global markets that they and their companies dominate.

These nations are few in number but big on power.  And through careful planning and coordination they largely know what they want and where they want to world to go.

True, they compete among themselves and sometimes they don't agree.  Recently, for example, the United States angered its Western allies when President Bush announced it would pull out of the Kyoto Protocol on climate change.

The Europeans take the dangers of climate change more seriously than the US and are pressing for reductions in the emissions of poisonous gases.

Again, the move by the US to have a missle defence shield is causing grave concerns among non-allies like Russia and China, but also among European countries.

There are also clashes on trade issues between the US and Europe, and sometimes between these two and Japan.

Despite these disagreements, the developed nations have all kinds of institutions and methods to get them working together as a group.  They have the Group of Seven that meets at Summit level annually, and with follow up and preparatory mechanisms.

They have the OECD, a grouping of 30 of the richest countries, with a think tank conducting research and formulating joint policies and activities.

The Europeans have the European Commission, with thousands of staff, whose task is to coordinate the policies and positions of its European state members.

And these developed countries also dominate the policies and processes of powerful international bodies such as the International Monetary Fund, the World Bank, and the World Trade Organisation, through which they can make policies for the world economy and to a large extent determine the national policies of the developing countries.

In contrast, the developing countries are less organised.  They lack the financial and personnel resources that the rich countries have and cannot match the thousands of staff members of the OECD or the EC.

They do however have their own organisations, meant to strengthen cooperation among themselves.   There is the Group of 77, comprising over 130 developing countries, and the Non Aligned Movement.  The G77 operates on a daily basis in the United Nations and has been quite successful in many areas, including on environment issues.

There is the Group of 15, and the regional organisations such as the Organisation of African Unity, Asean, Mercusor (for some Latin American countries) and Caricom (for the Carribean countries).

However the capacity and resources of these organisations are limited, compared to the rich countries' agencies.  For example, the G77 office in New York has only three or four staff, and the G15 secretariat in Geneva has about the same number.

The developing countries have been making use of the United Nations and its agencies, whose secretariats have previously been quite supportive of their interests.  For example, the Geneva-based UNCTAD has in the past promoted commodity agreements to ensure fair prices for Third World exports.

However, the UN agencies have lost much of their strength due to their being downgraded in terms of resources or authority, in a deliberate move by the developed countries to transfer their mandate on social and economic matters to the IMF, World Bank, the WTO and also to the G7 and OECD.

What the developing countries lack in resources, it can make up for in greater and more efficient coordination among political leaders and negotiators.

It is near impossible for more than 130 countries to agree on everything, or even on most things, and a Herculean task to even organise among so many countries on all subjects.

Thus, it would be more effective if those countries that are concerned about a certain subject get together on that issue and push for a common position at least among themselves in the international arena.

In the Biodiversity Convention, a large number of developing countries formed a "like minded group" in the Biosafety Protocol negotiations when five or six members of the Group of 77 decided to join ranks with the US, Canada and Australia.

In the WTO, there is also a "like minded group" of about 15 developing countries (including Malaysia) that meet at least once a week and try to coordinate some policies.

In the IMF and World Bank, some developing countries work under the Group of 24.

Whilst there are thus some basic and working mechanisms, the developing countries need far more resources, personnel, and most of all political will to get South-South policy coordination to anywhere near an effective level, to be able to begin matching the developed countries.

Malaysia has a high profile in championing South-South cooperation, and in these few weeks it can play an important role, during the Indian Prime Minister's visit, and the G15 series of meetings in Jakarta.

The reform of the international financial system should be high on the agenda of developing countries, for they have been the victims of debt crisis, and financial and currency turmoil.  There is yet no effective coordinated response from the South, either at the IMF or the Financial Stability Forum and other venues where decisions are taken.

The WTO is another crucial arena where global economic policies are made that are legally binding on all Members.  The future shape of the WTO will be decided between now and its next Ministerial meeting in November.

Developing countries have the opportunity now to insist that the WTO resolve the many problems arising from its existing agreements (dubbed the "problems of implementation"). 

They can unite more strongly to turn away the proposals that developed countries are pushing to negotiate yet more agreements on non-trade issues such as investment, competition, government procurement and labour standards.

In the next weeks, leaders of developing countries have to get their act together and agree to stand firm in refusing to negotiate these new issues, as the WTO General Council in Geneva is supposed to agree to an agenda for the Ministerial meeting in the next few months.

Then there are issues relating to the global governance of world's economic and social issues.   The governance structures are much weighted against the developing countries.  Key decisions are taken by the Group of Seven rich countries, and by institutions they and their companies control.

Developing countries can insist on reforms to the way global governance is conducted.  But they can do so effectively only if they get together, work out their positions in a sound intellectual way, and formulate strategies and tactics on negotiations and other actions.

It is a tall task, but it has to start somewhere, and better to do so sooner and not later.  The visits by President Castro and Prime Minister Vajpayee, as well as the G15 meetings in Jakarta, could be part of the building blocks towards better South-South coordination.