From Melbourne to Prague: the Struggle for a Deglobalized World
By Walden Bello*
(Talk delivered at a series of engagements on the occasion of demonstrations
against the World Economic Forum (Davos) in Melbourne, Australia, 6-10
September 2000.)
We are, here in Melbourne in the next few days and in Prague in two weeks'
time, participating in an historic enterprise: that of creating a critical
mass to turn the tide against corporate-driven globalization.
For years, we were told that globalization was benign, that it was a process
that brought about the greatest good for the greatest number, that good
citizenship lay in accepting the impersonal rule of the market and
good governance meant governments getting out of the way of market forces and
letting the most effective incarnation of market freedom, the transnational
corporation, go about its task of bringing about the most efficient mix of
capital, land, technology and labor.
The unrestricted flow of goods and capital in a world without borders was
said to be the best of all possible worlds, though when some observers
pointed out that to be consistent with the precepts of their 18th century
prophet, Adam Smith, proponents of the neoliberal doctrine would also have to
allow the unrestricted flow of labor to create this best of all possible
worlds, they were, quite simply, ignored.
Such inconsistencies could be overlooked since for over two decades,
neoliberalism or, as it was grandiosely styled, the "Washington Consensus"
had carried all before it. As one of its key partisans has nostalgically
remarked recently, "the Washington Consensus seemed to gain near-universal
approval and provided a guiding ideology and underlying intellectual
consensus for the world economy, which was quite new in modern history."(1)
Globalization Unravels I: The Asian Financial Collapse The unrestricted flow
of speculative capital in accordance with Washington Consensus doctrine was
what our governments in East Asia institutionalized in the early 1990's,
under the strong urging of the International Monetary Fund and the US
Treasury Department. The result: the $100 billion that flowed in between
1993 and 1997 flowed out in the bat of an eyelash during the Great Panic of
the summer of 1997, bringing about the collapse of our economies and spinning
them into a mire of recession and massive unemployment from which most still
have to recover. Since 1997, financial instability or the constant erosion
of our currencies has become a way of
life under IMF- imposed monetary regimes that leave the value of our money to
be determined day-to-day by the changing whims, moods, and preferences of
foreign investors and currency speculators.
Globalization Unravels II: The Failure of Structural Adjustment The Asian
financial crisis put the International Monetary Fund on the hotseat, leading
to a widespread popular reappraisal of its role in the Third World in the
1980s and early 1990's, when structural adjustment programs were imposed on
over 70 developing countries. After over 15 years, there were hardly any
cases of successful adjustment programs. What structural adjustment had
done, instead, was to institutionalize stagnation in Africa and Latin
America, alongside rises in the levels of absolute poverty and income
inequality.
Structural adjustment and related free-market policies that were imposed
beginning in the early 1980's were the central factor that triggered a sharp
rise in inequality globally, with one authoritative UNCTAD study covering 124
countries showing that the income share of the richest 20 per cent of the
world's population rose from 69 to 83 per cent between 1965 and 1990. (2)
Adjustment policies were a central factor behind the rapid concentration of
global income in recent years--a process which, in 1998, saw Bill Gates, with
a net worth of $90 billion, Warren Buffet, with $36 billion, and Microsoft
co-founder Paul Allen, with $30 billion, achieve a combined income that was
greater than the total combined income of the 600 million that live in the
world's 48 least developed countries, a great number of which had been
subjected to adjustment programs.
Structural adjustment has also been a central cause of the lack of any
progress in the campaign against poverty. The number of people globally
living in poverty that is, on less than a dollar a day-- increased from 1.1
billion in 1985 to 1.2 billion in 1998, and is expected to reach 1.3 billion
this year. (3) According to a recent World Bank study, the absolute number of
people living in poverty rose in the 1990's in Eastern Europe, outh Asia,
Latin America and the Caribbean, and sub-Saharan Africall areas that came
under the sway of adjustment programs. (4)
Confronted with this dismal record, James Wolfensohn of the World Bank had
the sense to move the institution away from its identification with
structural adjustment with public relations initiatives like the SAPRI, or
the Structural Adjustment Program Review Initiative, that it said would be
jointly conducted with NGOs. But the IMF under the doctrinaire Michel
Camdessus refused to see the handwriting on the wall; it sought, instead, to
embed adjustment policies permanently in the economic structure through the
establishment of the Extended Structural Adjustment Facility (ESAF).
Yet as a consequence of greater public scrutiny following its disastrous
policies in East Asia, the Fund could no longer pretend that adjustment had
not been a massive failure in Africa, Latin America and South Asia. During
the World Bank-IMF meetings in September 1999, the Fund conceded failure by
renaming the ESAF the "Poverty Reduction and Growth" Facility. There was no
way, however, that the Fund could successfully whitewash the results of its
policies. When the G-7 proposed to make IMF certification a condition for
eligibility in the now defunct HIPC Initiative, Rep. Maxine Walters of the US
House of Representatives spoke for many liberal American lawmakers when she
commented, "Do we have to involve the IMF at all? Because, as we have
painfully discovered, the way the IMF works causes children to starve." (5)
So starved of legitimacy was the Fund that US Treasury Secretary Larry
Summers, who in an earlier incarnation as chief economist of the World Bank
was one of the chief backers of structural adjustment, told the US Congress
that the "IMF-centered process" of macroeconomic policymaking would be
replaced by "a new, more open and inclusive process that would involve
multiple international organizations and give national policymakers and civil
society groups a more central role." (6)
Globalization Unravels III: The Debacle in Seattle Freedom, said Hegel, is
the recognition of necessity. Freedom, the proponents of neoliberalism like
Hegel's disciple, Francis Fukuyama, tell us, lies in the recognition of the
inexorable irreversibility of free- market globalization. Thank god, the
50,000 people who descended on Seattle in late November 1999 did not buy this
Hegelian- Fukuyaman notion of freedom as submission and surrender to what
seemed to be the ineluctable necessity of the World Trade
Organization (WTO).
In the mid-nineties, the WTO had been sold to the global public as the
lynchpin of a multilateral system of economic governance that would provide
the necessary rules to facilitate the growth of global trade and the spread
of its beneficial effects. Nearly five years later, the implications and
consequences of the founding of the WTO had become as clear to large numbers
of people as a robbery carried out in broad daylight. What were some of
these realizations?
- By signing on to the Agreement on Trade-Related Investment Measures
(TRIMs), developing countries discovered that they had signed away their
right to use trade policy as a means of industrialization.
- By signing on to the Agreement on Trade-Related Intellectual Property
Rights (TRIPs), countries realized that they had given high tech
transnationals like Microsoft and Intel the right to monopolize innovation in
the knowledge-intensive industries and provided biotechnology firms like
Novartis and Monsanto the go-signal to privatize the fruits of aeons of
creative interaction between human communities and nature such as seeds,
plants, and animal life.
- By signing on to the Agreement on Agriculture (AOA), developing countries
discovered that they had agreed to open up their markets while allowing the
big agricultural superpowers to consolidate their system of subsidized
agricultural production that was leading to the massive dumping of surpluses
on those very markets, a process that was, in turn, destroying
smallholder-based agriculture.
- By setting up the WTO, countries and governments discovered that they had
set up a legal system that enshrined the priority of free trade above every
other good--above the environment, justice, equity, and community. They
finally got the significance of consumer advocate Ralph Nader's warning a few
years earlier that the WTO, was a system of "trade uber alles."
- In joining the WTO, developing countries realized that they were not, in
fact, joining a democratic organization but one where decisions were made,
not in formal plenaries but in non-transparent backroom sessions, and where
majority voting was dispensed with in favor of a process called "consensus"
which was really a process in which a few big trading powers imposed their
consensus on the majority of the member countries.
(* This document was circulated through [International Network on Disarmament
and Globalization] list. If you want to read full text, please
click an attached file.)
