Globalisation weakens poor countries further

by Gustavo Gonzalez

Valdivia, Chile, Jun 21 -- The World Bank stated today that globalistion is condemning some nations to total poverty, and has reached a point where they are no longer "developing countries" but "perpetually weak economies."

Shaid Javed Burki, the World Bank's vice-president for Latin America and the Caribbean, said during his opening speech at the annual conference for Decentralisation and Public Sector Accounting, that the region must "bring its governments closer to the people" in a new framework for change.

The conference in Valdivia, a port city 810 kms south of Santiago, has brought together representatives from the region's governments, as well as delegates from international organisations, and experts on local development and decentralisation.

Eduardo Aninat, Chile's finance minister, said during the opening session that human resources form the basis for any decentralisation process and he called on the gathering to take up the issue, maintaining a broad and humanitarian view.

The contradiction between the globalisation process and the attempts by various countries to decentralise development processes and government policies, as suggested by both Javed Burki and Aninat, is the focus of this two-day conference,

Javed Burki asserted that bringing the government and people together would help the standard of living, both in terms of work opportunities as well as in demographic issues.

The World Bank official stated that the general opinion is that globalisation has concentrated economic power in the hands of a few large multinational corporations, such as banks and petroleum companies.

This greater economic power, added to the speed with which financial resources now circulate, and the distribution of productive means, explained Javed Burki, all contribute to the impoverishment of the smallest countries and the loss of State power.

Within this new framework, the category of "developing countries" loses meaning for these smaller nations, he stated, which have really become "perpetually weak economies."

Javed Burki said that leaders must understand the true meaning of globalisation, as well as its effects on various countries, and move toward government decentralisation to improve the distribution of its benefits to the people.

Demographic changes, he added, raise unavoidable challenges for the industrialised countries of the North. Japan, for example, currently has a population of 120 million, but it is expected to fall to just 60 million in the next 60 years.

The northern countries will not be able to maintain the necessary industrial infrastructure within their territories, nor can they hope to promote selected population migration, but will have to move their industries to the developing world in search of a workforce.

But they will move to those countries whose populations are better trained and educated, which means that investments of that type should go to the weaker countries, explained the World Bank vice-president.

He also stressed that the investment process increasingly rests on resources supplied by the inhabitants of the industrialised North, where private funds, in accordance with neo-liberalist trends, reduce those countries' risks.

Javed Burki stated that pension funds in the United States currently invest nearly a third of the total overseas - but less than half of that sum is invested in countries of the South.

The World Bank proposes to correct this situation by strengthening the development capabilities of the smallest countries. The organisation will take on a determining role in the decentralisation process and local development.

"Within globalisation are the seeds of change that must take root in the developing world," said Javed Burki, who called for "converting globalisation into an active rather than a passive process" for the region.

The World Bank began its annual conferences for Latin America and the Caribbean in 1995 in Rio de Janeiro with a meeting focused on economic reforms.

Subsequent conferences included themes of poverty (Bogota, 1996), international trade (Montevideo, 1997), and banks and capital markets (San Salvador 1998). (IPS)

The above article by the Inter Press Service appeared in the South-North Development Monitor (SUNS).