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A Perspective from Europe - Introductory Remarks

By Yves BERTHELOT(1)


ASIA-EUROPE PEOPLE’S FORUM

The message that the Asia-Europe People’s Forum will transmit to the Fifth Asia-Europe Meeting matters for at least two reasons. First, because Heads of States and Governments need to hear the voice of the people who are willing to live in our common world enjoying development, human security, peace, equity, and brotherhood. Second, because people have recommendations to make in order to address their common problems, including the need for interregional dialogue as an essential requisite for civilising globalisation.

It is because I believe that globalisation, as conceived and managed today, is a threat to human security, that I will devote the first part of my presentation to its nature and to some possible remedies. But, thereafter, because I believe that we are facing even more difficult challenges to which we have no clear answer, I will raise a few questions calling for a common and humble effort of reflection.

Globalisation: facts, ideology, and some remedies

In the course of the 1980s the word “globalisation” came into fashion to describe what many felt to be a new and central reality of the times. This “reality” was supposed to be first the result of technological progress that had reduced the costs and the risks of international communications and transports, and dramatically increased the capacity to process information. Second, the progressive removal of trade barriers in industrialised countries since World War II and, since the 1980s, the deregulation of financial markets and privatisation were expected to give its full effect to technical progress and managerial rationalisation in the developing world and, after 1990, in countries with economies in transition.

Facts

It cannot be denied that there has been significant technical progress in recent years. But, can it really be claimed that the pace of change has been greater than in the late 19th century when the speed of communication between Europe and North America, for example, was reduced in the 1860s from several day’s sailing time to the minute or so that it took to send a telegraph message? The point here is that the rupture in the way of doing business introduced over the last two decades by the new information technology is not without precedent of similar magnitude, but also that we cannot ignore these progresses but have to harness them to the benefit of all and, not, of a minority.

Statistical data show, first, contrary to what could be expected given the relentless publicity about the “global village” and global markets, that the external trade of the broad regions of the world evolved towards a much closer integration of the countries within each region rather than towards a global engagement. Second fact, statistics show that the more a region is industrialised, the more important is its intra regional trade. The regional trade concentration has been a long-standing phenomenon in Western Europe. The same phenomenon occurred in Latin America and Asia with the diversification of their economies. For Africa and the Middle East, the very low level of regional integration reflects the countries’ continuing dependence on a few commodities exported throughout the world and their low level of industrialisation.

With the liberalisation of capital movements, it was expected that capital flows would have globalised. But, foreign direct investments for which data are available replicate, if slightly less sharply, the pattern of regional trade concentration. Even if FDI data by provenance and destination are not among the most reliable of economic statistics, they suggest indeed that there is no globalisation of Western European Investments, but increasing concentration in the region. The evolution in Asia and Latin America goes in the same direction.

Globalisation and ideology

The ideological dimension of globalisation is not new either. Since the word appeared, it has been legitimised by the belief, shared by some policy makers, academics, and entrepreneurs, that open trade and investment regimes would lead not only to faster growth for the world economy but also to increasing convergence of national incomes per head across the world. To achieve these objectives, advocates of globalisation recommended releasing market forces by limiting the economic role of the state to securing the good functioning of markets, and by avoiding interference with market forces. “In this normative mode, so to speak, the globalisation agenda turns out to be the traditional neo-classical, neo-liberal agenda updated for a world where geographic distance is alleged to have little significance for business activity”.(2)

The ideology is not new and, it does not surprise us that globalisation failed to deliver its promises: it did not improve the situation of all throughout the world as income gaps within and between countries increased. The United Nations Secretary General challenged recently this dogma: “Trade is the most visible manifestation of globalisation. It has proved its ability to deliver jobs and wealth for some. Yet there is widespread unease, and even distrust, about the new economic and technological space we inhabit. So many people have yet to benefit, and in the developing world there has been great dislocation without a safety net.”(3) Maybe, finally, the Harry Kissinger’s cynical vision has the merit of reconciling ideology and politics when he describes globalisation as an instrument of the US hegemony: “what is called globalisation is really another name for the dominant role of the United States.” It is because we believe that hegemony is dangerous for human security that we have to fight the ideological dimension of globalisation through, in a first step, the strengthening of the regions.

Regionalisation as a remedy to some damage of globalisation

The scandal of hunger and of the social irresponsibility of some multinational corporations illustrate remedies that regionalisation could bring to problems that concern our two regions even if apparently in opposite manners.

  • The scandal of hunger

The desire of governments to feed urban citizens at low cost, as well as bilateral pressures of food exporting countries, conditions imposed by International Financial Institutions in the framework of structural adjustment programs or debt alleviation mechanisms, and WTO rules led progressively to food trade liberalisation in most developing countries and countries with economies in transition, far more than in Europe and United States. This puts the small farmers of these countries in direct competition with farmers from developed countries who have benefited from state support for decades and whose exports are directly or indirectly subsidised. The competition is obviously unfair and the main cause of hunger for poor farmers who, because of declining prices and of compulsory expenditures such as housing, health care, education, and food, are forced to sell an increasing share of their production, leaving their families without enough to eat and themselves without the resources to buy the equipment and inputs necessary to increase productivity.

Markets do not adjust production to demand for many agricultural products, as peasants, who cannot shift to other productions or activities, tend to allocate a higher percentage of this creates over supply and accelerates the fall of prices. In most of the OECD countries subsidies permit peasants to survive. This is not the case in developing countries. Developing countries. They should gain food sovereignty in order to recover the necessary policy space to conduct their agricultural policies and fight against hunger. In particular, the right to impose duties on food imports should be recognised as part of a strategy to increase food security and concretise the right to adequate food for both small farmers and vulnerable urban dwellers. Countries would derive an advantage from pursuing such policies at an appropriate regional level for, at least, two reasons. The first is that contrary to industry, agriculture is diversified even in poor developing countries. Operating on a regional basis could help overcome climatic hazards, induce regional trade, promote the harmonisation of food norms, and facilitate further integration in other sectors. Second, a group of countries carries more weight in international negotiations or vis-à-vis financial institutions for obtaining in international forums the margin of manoeuvre they feel necessary to fight against hunger.

  • The social irresponsibility of some corporations

There is a need for stronger corporate governance. This is not to say that all corporations or enterprises are corrupt. But the need in general for the development of more stringent guidelines and rules is clear. As it stands in some corporations, the existing accounting and reporting mechanisms can be manipulated in order to make losses or benefits appear where more advantageous. This is an excuse for delocalisation and may lead to organising the bankruptcy of a sound subsidiary, leaving creditors and employees without recourse and eventually retirees with under-financed pension liabilities. The liberal answer is that the market will eventually sanction wrong behaviour. It is not convincing. As the dramatic begging thy neighbour policies of the 1930s are now practised by big companies, the international debate should address the responsibilities of the firms vis-à-vis customers, employees and shareholders and consider if the absolute priority given to shareholders during the last twenty years is not undermining the whole system. This would provide a basis for condemning irresponsible enterprises. It will not be easy at the global level “in a political climate in which corporate insiders get pretty much what they want” and the politicians who do their bidding are not likely to pay any price”(4) : But Europe and Asia should start and, if they establish criteria and legal obligations that countries concerned with the recent drift of the capitalist system could apply, it will have an impact on the rest of the world.

The remarks made above and the examples given point to the importance of regions and interregional relations, but the latter are still in need of proper practices, clear goals, and concrete results. They have to transform dialogues into negotiations of agreements, to find ways to compensate imbalances between parties and to prove that they have a positive impact on global negotiations. If they succeed, they will have a decisive influence in the management of globalisation, if not, they will remain another layer of discussion, useful but time consuming.

To succeed there are at least two conditions. First the authorities of the regional groupings should have delegation of authority and clear mandates to take initiatives and explore possible interregional agreements. This is not often the case as illustrated in a recent encounter between the EU and ASEAN, where Pascal Lamy, the European Commissioner, found himself alone vis-à-vis ministers from each ASEAN country who had divergence among themselves on what to achieve and how. Second, if authority is delegated to regional entities to conduct regional policies and negotiate interregional agreements, then democratic control of these policies and agreement should be exercised at the regional level. In Europe it remains to be seen, if the Project of Constitution is adopted, how the Parliament and the Commission will exercise their power and how the principles of participatory democracy (Article I-46) will be applied. The civil society organisations should be able to make known their views and to hold regular dialogue with the EU Institutions; they should be consulted by the Commission to ensure that the Union’s actions are coherent and transparent. A minimum of one million citizens could invite the Commission “to submit any appropriate proposal on matters where citizens consider that a legal act of the Union is required for the purpose of implementing the Constitution”. This goes in the right direction. But, it will depend from the CSO to make it effective or cosmetic.

A few questions to be addressed

Beyond the criticism of globalisation for its failure to reduce gaps between rich and poor, there are other fundamental questions to rise. First, a global approach of the economy should have been able to more strongly limit the damage to the environment that it has actually been the case. Beyond the easy expression of “sustainable development”, action is needed to change behaviours of consumers and producers rather than leaving rules on the book and conducting a few corrective actions. Conducted by enterprises with the dominant objective of short-term maximisation of the value of the stocks and by government striving for GDP growth, economic activities are now threatening the future of our children more than they are building it, a serious threat to human security. It is now admitted that if all developing countries, and first of all those of Asia, were to enjoy the pattern of consumption of the United States or Europe, the pressure on natural resources, including air and water, would be unsustainable. This is difficult to say here as it could be interpreted as denying other people the right to enjoy OECD standards. But, it means simply that the OECD model is not adapted to present circumstances: therefore, people from OECD countries will have to change their way of life and people from other parts of the world will have to change their implicit model. Second, we still all equate more to better, when in fact more threatens the future. This, also, is particularly difficult to say when so many people are suffering hunger and cannot benefit from their human right to “adequate conditions of living”, But, according to the FAO, the world food production exceeded nutrition needs by 23% in 2000, and market forces conduct to invent needs for the wealthy and to neglect basic needs and services for the poor.

If “more” is no longer “better”, to produce more is not the priority. Rather the priority is to better share production capacity, access to production means, and to share them both with all the countries of the world and with future generations. “The question becomes: “to produce more? Maybe - but, what, why, for whom and for doing what?” The economic rationality moves to other ground. The criterion is no more the efficiency of the productive apparatus but its capacity to cover human basic needs. … From competition we move to solidarity”(5). But then, how to agree on basic human needs, which is closely related to societal values, and how to appreciate the rationality of economic policies? The arbitration between different possible answers can only come from a democratic debate at the end of which the society designs its social goals for a period of time and judges policies on their capacity to meet them.

Two concluding remarks

To ensure that regional entities conduct internal and external policies for the peoples and that national economic policies aim at meeting basic human needs for today and tomorrow, CSO have to be present and active. Beyond demonstrations, they have to work daily, modestly and perseveringly, at the local, national, regional, and global levels. At each level, they can promote ideas and contribute to good practices. It is my own experience in the UN that well prepared NGOs with clear and coherent goals can influence decisions and have their proposals endorsed by governments in international conventions. For them to fully play their role at the local, national and regional levels, it matters that their rights and responsibilities be fully recognised in institutions, laws and rules and that, on major issues, governments adopt rights based approaches, i.e. that identify claims and claim holders, duty bearers, remedies, and secure participation. It is one of the messages that, I think, our Forum should convey to governments and peoples.

A second message is not to be shy in affirming that social and cultural values are different from one people to another and in drawing the consequences of this fact. Because of the differences, the answers to the questions raised above will be different from one people to another, from one country to another, from one region to another. This is not a threat as there is no need for a single answer, contrary to what the theoreticians of globalisation would like us to think. But, there is a need for a dialogue between the peoples of different cultures and civilisations that will lead to mutual recognition and benefit and to peace. Vietnam has, for centuries, fought successfully for its culture and Michelet more than a century ago described wonderfully the unity and diversity of Europe: “ Europe is not a half-hazard collection of a simple juxtaposition of peoples; it is a vast harmonic instrument in which each nationality is a chord with its own tone. Everyone is necessary in itself and in relation to the others. Take one away and you alter the whole, rendering it unviable, discordant, … silent”. Let Asia and Europe develop two harmonic instruments and play together in the world orchestra. This could be our second message.

Footnotes

[1] - Yves Berthelot former Executive Secretary of the Economic Commission for Europe (UN-ECE) is President of the French Committee for International Solidarity (CFSI) and of Political and Ethical Knowledge on Economic Activities (PEKEA). He is Senior Research Fellow of UNITAR and of the City University of New York

[2] - “Globalization: A European Perspective”, note prepared by the secretariat of the United Nations Economic Commission for Europe to the Interactive Debate with Heads of UN Regional Commissions at the UNCTAD X Meeting, Bangkok, February 2000.

[3] - In the statement of the UN Secretary General at the WTO Summit delivered by Rubens RICUPERO, Secretary General of UNCTAD, in Cancun, 10 September 2003.

[4] - See Paul KRUGMAN “The U.S. corporate system still needs fixing” in the International Herald Tribune Saturday-Sunday, January 10-11 2004.

[5] - René PASSET, Pourquoi la question de l’éthique devient-elle incontournable en économie? Communication to the General Assembly of Political and Ethical Knowledge on Economic Activities, PEKEA, Rennes December 2003.


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