Global economic order and developing countries

A third view holds that the origins of globalisation lie in the political decision by the developed countries, led by the USA with active support from the UK. The purpose, it is suggested, was to develop such an international financial architecture and a trade regime as would mobilise savings from around the world to serve the economic interests of the developed countries, particularly the USA which faced high costs of Vietnam war as well as high levels of deficit, without having to make unpopular structural and policy adjustments to their economies.

Thus, those countries insist that the developing countries open up their markets; but they themselves do not walk the promises made and even the agreements entered into under the Uruguay Round of trade negotiations in relation to granting preferential market access to imports, particularly to non-agricultural imports, from the developing countries. They continue to provide very heavy agricultural subsidy, including on livestock. The level of agricultural subsidy in the USA and the rich EU countries runs at such a high level as US$1 billion a day. On the other hand, they insist that the developing countries do not provide subsidies to agriculture or to any other economic activity. Moreover, international free movement of labour is not allowed, thereby making the on-going globalisation a partial process, denying the developing countries the one opportunity from which they certainly stand to gain.

The Washington Consensus (WC) formulated by the World Bank and the IMF at the behest of the USA and other developed countries provide the basis for the emerging unequal international economic governance processes. The key focus has been on the removal of regulations and control over capital, both national and international, the creation of a global free market in goods and services, and the rolling back of the government.

As to the shaping and working of the first two processes, the dominant developed countries are virtually in total control. Dogmatic down-sizing of the governments in the developing countries has been weakening them further in relation to any meaningful role that they could play to benefit from the evolving free market globalisation. The World Trade Organisation (WTO) is mandated to promote free trade globally. But, here again, the shots are called by the dominant international powers. Thus, one finds that even after agreeing in Doha WTO meeting in 2001 to address the development issues (viz., special and differential treatment of developing countries, implementation issues, technology transfer, and commodity issues), they sought to relegate to the back burner those issues in 2003 in Cancun by insisting that the Singapore issues (viz., relationship between trade and investment, interaction between trade and competition policy, transparency in government procurement, trade facilitation) must be taken on board. In fact, as an agency of the United Nations which has proclaimed: "We the peoples ... ...", thereby embracing all homo sapiens as equal partners of the global society, WTO should focus on fair trade, and not on free, unfair trade.

The Millennium Developing Goals (MDGs), formulated by the United Nations, focus on issues of deep concern in the developing world. These issues include poverty reduction, promotion of universal primary education, promotion of gender equality and empowerment of women, reduction of child mortality, improvement of maternal health, ensuring environmental sustainability, increasing access to safe drinking water and proper sanitation. There is a lot to be excited about the MDGs, given their relevance to the developing countries, including Bangladesh. However, the question remains as to how far these goals can be achieved within the on-going neo-liberal globalization framework, which has been accentuating disparity and exclusiveness among and within nations. In fact, according to UNDP Human Development Report 2003, 54 countries are now poorer than in 1990. Also, during the same time span, the proportion of people going hungry has increased in 21 countries, and life expectancy at birth has fallen in 34.

The concept of sustainable development that focuses on not only economic growth but also on social progress and environmental sustainability and recognises the centrality of the human being in the process has been showered with a lot of rhetorical support in 1992 Rio Earth Summit and 2002 Johannesburg World Summit on Sustainable Development (WSSD) as well as in many other conferences and fora in between the Earth summit and the WSSD and since WSSD. But, in practice, it is the free-market globalisation that is being pushed forward by the international dominant powers through such institutions as the World Bank, the IMF, and the WTO and, also, using bilateral mechanisms, virtually discarding the concept of sustainable development for all practical purposes.

The issue of environmental sustainability receives a lot of rhetorical attention, but not much in practical terms. Apathy on the part of the rich countries and lack of human and financial capability as well as of far-sight on the part of most of the developing countries are allowing the process of environmental un-sustainability to continue to accentuate.

The USA, the largest contributor to the global emission of greenhouse gases that are responsible for global warming, has withdrawn from the Kyoto Protocol on control of emission of greenhouse gasses, thereby jeopardising the prospect of the Protocol to come into effect. The other significant contributors to this global warming process, including countries in both developed and developing worlds, are also continuing their greenhouse gas emission activities without restriction. Regarding capacity building in the developing countries, commitments made by the developed countries under various Protocols and Declarations for financial and technology transfers have remained mostly unfulfilled.

Clearly, therefore, the process of global economic integration, promoted by neo-liberal globalisation, has been accentuating global diversity, with most of the phenomenally increased global wealth and technological advancements being at the disposal of the developed countries. Within countries also, the existing glaring divergence between the rich and the poor has been increasing further in the wake of globalization. The emerging global economic order is, therefore, under severe strains and tensions. The challenges and disadvantages that the emerging global economic order has been generating for the developing countries are so much more than the opportunities created for them.

Can corrective measures be formulated and implemented to establish a fair world economic order, which will enable all nations -- big and small, rich and poor -- to participate effectively in its management and benefit equitably from the fruits it generates? I am firmly of the opinion that Frances Fukuyama is wrong in announcing "End of History", meaning thereby that neo-liberalism has triumphed over all other forms of governance and economic management. I am sure 'History' has not ended. The accentuating disparity and exclusion cannot go unchallenged both at national and international levels. For a smoother reorientation, human ingenuity should be summoned by all concerned to design and introduce appropriate reforms in the international institutions and trading and investment arrangements.

It is also necessary within nations to address governance issues as well as other social and economic issues with reference to the prevailing realities within country such as the prevailing unequal relationships between various segments of society, inefficacious pattern and low productivity of economic activities, extremely narrowly-based export and free import regimes, burgeoning unemployment of both uneducated and educated people, external opportunities and constraints, and other relevant aspects. This will require the on-going reforms to be restructured to suit the country's particular needs. Dawning a strait-jacket, which is now being forced upon the countries under the neo-liberal dispensation often under aid-conditionality, is doing them more harm than good.

Finally, let me make a point, which is recognised widely and is worthy of repeating. The global economy today is able not only to feed all the world's inhabitants, but also to offer opportunities to all of them to live in human dignity. Obviously, it is a question of distribution across and within nations; and the distribution can be equitable only if the international institutions and governance as well as national social, economic market, and political processes are democratic and participatory, underpinned by ethics, morality, and human values. Only under such reshaped international and national economic orders can a country like Bangladesh and its people secure a better tomorrow in terms of equitable economic progress and social development and a worthy place in the comity of nations.

Dr Qazi Kholiquzzaman Ahmad is President, Bangladesh Economic Association (BEA) and Chairman, Bangladesh Unnayan Parishad (BUP).

The article is based on excerpts from the author's address as the chair at inaugural session of the international conference on Emerging Global Economic Order and Developing Countries, organised by the Bangladesh Economic Association (BEA) in Dhaka recently.