| VOL.2.NO.2 | A MONTHLY NEWSLETTER OF THE MINISTRY OF COMMERCE & INDUSTRY |
FEB 2000 |
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UNCTAD X :
Disparities in the distribution of wealth and income are on the rise, both within and between nations. We can expect to start the next century with income disparity between the top and bottom quintiles of perhaps 150:1, if we are not there already. There is substance in the saying that a global quintile disparity of 150 to 1 is fraught with risks for rich and poor alike. It is a shocking fact that the assets of the world’s three richest people are more than the combined GNP of 26 of the world’s poorest countries. According to the Worldwatch Institute, there are more poor people than ever before, after years of globalisation. Poverty, inequality and deprivation persist, nay, they are growing. To use the words of Nobel laureate Amartya Sen, "People are denied their entitlements." One-third of the people in the developing world live in poverty without their entitlements of the very basic needs. As many as 840 million people suffer from malnutrition. More than 600 million children who should be in school are not. As we enter the 21st century, more than 250 million adults remain illiterate, and most of them live in the third world--this is the balance-sheet of globalisation as we enter the new Millennium. The term "Third World" was originally intended as a badge of pride: Jawahar Lal Nehru coined it to refer to those countries that maintained their independence, aligning themselves neither with the West nor with the Soviet Union; but soon enough, the political intention was overwhelmed by the economic reality- "Third World" came to mean backward, poor and less developed. And the term came to carry a connotation not of righteous demand but of hopelessness. Of course, in the meanwhile, the so-called Second World also vanished. Did the "Third World" exist from the beginning of history? I turn the pages of history and find that the answer is ‘No’. For instance, India had supplied Europe with calicos and muslins, as China had supplied silks and satins. The British manufacturing industry, at the end of the 18th century, clamped a 100% tariff on the imports of Indian textiles. The cotton towns of Surat of India, Dhaka and Murshidabad of Bangladesh, which is now a least developed country, were described by Robert Clive in 1757 as just ‘as extensive, popular and rich as the city of London’. These manufacturing centres exported millions of pounds of cotton goods each year. What happened to the Indian textile industry was repeated in other industries. The native iron smelting industries of India that could produce six-ton 24 feet steel pillar at Qutab Minar 1500 years ago and the steel for the famous Damascus blades were wiped out. That’s how we lost out and became a part of the "Third World". That’s why we believe that the rules of the game of the international trade or the world order should be fair and equitable. That’s why we demand that the international rule-making must not encroach on the sovereignty of the national Governments and permit flexibility and autonomy to developing countries to pursue their material development strategies on the basis of the needs and aspirations of their people. Globalisation means different things to different people Globalisation means different things to different people. Globalisation is at once praised by some and feared and condemned by others. Those who get new opportunities for expanded markets and the spread of technology and management expertise, which in turn promises greater productivity and higher standard of living, praise globalisation. Those who cannot get these benefits and whose jobs are threatened by competition from imports, are bound to condemn globalisation. When McLuhan coined the phrase "Global village", he meant the shrinkage of the world due to communication revolution. That kind of globalisation due to onward march of technological revolution is welcome and inevitable. But if the term ‘globalisation’ is used as a standardised prescription and dictated as a condition precedent for development and growth, it is fraught with risks and therefore invites protests. The political, social and cultural diversity of the world does not lend itself to "one size fits all" prescriptions. Countries must be given the flexibility in policy making, because otherwise they will loose control over their own economies. Today nobody debates any more about Market vs. State. The question is not whether the State or the Market should dominate; each has a unique role to play. The issue is one of balance and where the balance is, may depend on the country, the capacity of the Government and the institutional development of the markets. A highlight of the current process of global economic liberalisation has been the establishment of a rule-based multilateral trading system under the Uruguay Round Agreements. India stands for a rule-based multilateral system which is just and fair. But the GATT and WTO look like a one-way street. You could drive down it from the North but the road was normally blocked from the South. While the developed countries continue to press for greater access for their goods and services, their capital, intellectual property rights, etc., in the world markets, the same is largely denied in areas where developing countries enjoy comparative advantage; even the traditional and indigenous knowledge of the developing countries is not given minimum protection. Trade measures in developed countries have significantly eroded the market access granted to developing countries in the Uruguay Round Agreements. Issues extraneous to trade such as labour standards, environment, investment etc. are sought to be put on the negotiating agenda. On the other hand, issues such as the cross border movement of persons, a matter of great interest to developing countries, are resisted by the developed countries. Ironically we saw the world upside down at Seattle: while developing countries were pleading for freer trade, developed countries were seeking Trojan horses to hide their protectionist intentions. By bringing non-trade issues like core labour standards, Seattle has failed and WTO process has become an object of strong criticism, both in the Developing and the Developed World. I quote from the editorial of The Wall Street Journal : "Once established, any labor-environment working groups will be impossible to get rid of. Soon they will be determining everything from minimum wage rates to environmental standards that would preclude all sorts of development. It’s hard to see why countries trying desperately to bring prosperity to their people should sign on to a deal giving politicians from rich countries the right to dictate Third World domestic policies in order to appease First World special interests and dilettantes". Therefore, WTO process needs to be reformed. The fear, anxiety and insecurity of the developing nations should be appropriately addressed. And most importantly, any attempt to insulate the First World markets from Third World competition should be stopped. Therefore, WTO should be given a much narrower, trade-oriented remit. The non-trade issues can be properly addressed by the appropriate international institutions-more competent and better equipped than WTO. Because WTO is empowered with the Rule of Law, ‘coherence’ of Brettonwoods institutions like World Bank, I.M.F. with W.T.O. has generated suspicions and invited resistance. While cooperation among international organisations may be good, we should be careful that in the name of coherence we do not create a networking behemoth which puts pressure on developing countries through cross conditionalities. Wanted : A New Deal for Development & Global Cooperation Yesterday, one of the eminent economists said in our Round Table that socialism inherited from the previous century has come to an end. But we should not forget that the cry of the grief uttered in the pain of poverty and deprivation by people still echoes all over the developing world. Out of the pain must be born the new dreams of justice - a new world economic order. Let us not forget the fact that while the First World with only one-fifth of the population consumes two-thirds of the earth’s resources, the effects fall most heavily on the four-fifths of the population which is in the Third World. Therefore, with that reality and historic responsibility in mind, let us create a New Deal for development and international cooperation. And in that process, let us not forget the underclass, the man in the slums and streets, the small farmer and the small shopkeeper in the street corner. Let us pay more attention to the rural areas where the poorest of the poor live - nay, exist. What we should seek is a framework within which all peoples of the North and the South, the Industrialised world and the Developing world, can work together and trade together fairly without the feeling of oppression or exploitation. Because, we all share, one world - the planet earth. I would like to conclude by quoting Mahatma Gandhi : "I do not want my house to be walled on all sides and any winds be stuffed. I want the culture of all the lands to be blown about my house as much as possible. But I refuse to be blown off my feet".
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?UNCTAD X :India calls for a New Deal for Development & Global Cooperation F Globalisation means different
things to different people ?Monthly Update from PMI/Geneva ? WTO Director - General’s Report to General Council on Consultations After Seattle ?Schedule of Meetings at the WTO, Geneva : March, 2000
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