Globalised concerns

Published : Apr 09, 2004 00:00 IST

"WE were sleeping on the shore when a big wave came." This rather eloquent summation from Egypt was among the testimonies that the World Commission on the Social Dimension of Globalisation (WCSDG) heard all over the world prior to preparing its report. A common concern of all those who chose to appear before it was "employment and livelihoods" and there was a sense, almost universally shared, of "instability and insecurity". From Poland came the metaphor of a force that could be harnessed for the common good: "If globalisation is a river, we must build dams to generate power."

The WCSDG was established by the International Labour Organisation (ILO) in February 2002. It was given the mandate of exploring the diversity of public perceptions on the process of globalisation and its implications for economic and social security and progress. Chaired jointly by Tarja Halonen and Benjamin Mkapa, Presidents respectively of Finland and Tanzania, the WCSDG submitted its report on February 24. Its membership included 19 distinguished public figures from a wide cross-section of countries, including the economist Deepak Nayyar, Vice-Chancellor of Delhi University. The ILO, for its part, contributed five ex-officio members from the current and recent composition of its apex governing body. With its report now submitted, the Commission has ceased to exist, though its members and its sponsors in the ILO obviously entertain the hope that attention does not waver from its recommendations. The WCSDG has, in a modest effort to ensure that this requirement is met, proposed a series of structured dialogues in future between all those with a stake in the process of globalisation.

The Commission observes that the phenomenon it is studying is "complex" and the term that seeks to encapsulate its essence is of very recent provenance. A leading German newspaper, for instance, recorded only 34 instances of the term "globalisation" being used in 1993. In 2001, the figure was 1,136. Expectedly, with no force of custom to guide its use and the heavy burden of ambiguity it carries, the term evokes strong and passionate responses across the political spectrum.

However, the WCSDG does suggest that the phenomenon is not entirely new. A "distinctive feature" of the current process of globalisation, it points out, "relates to what is conspicuously absent". While earlier episodes of "globalisation" were "characterised by massive cross-border movements of people, the Commission records that "the current process largely excludes this". International mobility under the new regime of globalisation in other words, is reserved for goods, firms and money.

The reference is evidently to the period beginning with the last quarter of the 19th century and continuing till the beginning of the First World War, one that the historian Eric Hobsbawm has described as an age of mass migrations. Conducted under the cover of imperialist conquest and plunder, the mass movement of people largely involved the European settlement of colonies in the Americas, the Antipodes and parts of Africa. But in maintaining a faade of equal opportunity for mobility for commodities, finance and people, the classic era of imperialism was perhaps more democratic than the current phase of globalisation. The irony perhaps is unintended, but there is a strong suggestion here that "globalisation" today could be construed as a new stage in the onward march of imperialism.

Among the key features of the current phase of globalisation, in the estimation of the WCSDG, are the growth of trade and foreign direct investment (FDI), both of which have since the 1980s outstripped output growth in the world economy. A still more powerful and entirely new factor has been "the rapid integration of financial markets". The global economic order that was put in place after the Second World War conceived of the gradual liberalisation of both trade and investment. But financial liberalisation was not even remotely conceived in the context of a fixed exchange rates regime.

The Commission does not make the point explicitly. But the explosion of dollar-denominated Third World debt in the 1970s - followed by the interest rate shock of 1981 which precipitated a near default situation in several large countries - was an obvious propellant of the process of globalisation. "The widespread recourse of indebted developing countries to structural adjustment loans from the Bretton Woods institutions in the aftermath of the debt crisis of the early-1980s played a pivotal role in the redefinition of trade and industrialisation strategies," observes the Commission. Also, global trade negotiations begun in 1986, moved beyond the "border paradigm" - under which matters pertaining to the organisation of the economy within national boundaries were treated as sovereign policy space - and brought a multitude of issues such as intellectual property rights, services and investment measures within the scope of multilateral agreements.

A feature of the new policy paradigm that the developing countries adopted following their crises of development in the 1980s was the failure of democratic consultation. The WCSDG records the testimony of a witness from Chile, who lauds the process of globalisation for creating a more open and democratic global environment. But it fails to ask whether a regime that stampedes vast multitudes into a policy environment that they have little knowledge of, on the specious and authoritarian logic that "there is no alternative", can genuinely be described as democratic.

In charting the impact of globalisation, the WCSDG is understandably cautious. The data sources on economic growth, employment, incomes and poverty are diverse and most of them throw up distinctly ambiguous findings. China and India, the two largest countries in the world, present in its estimation, an upbeat picture in the last decade of globalisation. But the evidence from most other countries indicates much reason for disquiet. And from sub-Saharan Africa, the picture is unequivocally dismal.

Even this assessment, which is relatively positive, would necessitate a re-examination of the basic premises of global economic policy. When note is taken of the ambiguous character of the gains made by India, notably in terms of the massive increase in informal employment and the rather contentious estimates on poverty, there is still stronger reason to do so.

If the Commission fails to perceive the democracy deficit in the process of globalisation, it is fairly unequivocal in urging "improved governance" at all levels as the antidote for its ills. The prescriptions closely mirror those advanced by successive editions of the Human Development Report issued by the United Nations Development Programme (UNDP) over the 1990s. They include an effective role for the state in the provision of basic services, sound institutions to supervise markets, institutional reforms to integrate the informal economy into the mainstream, and various others.

The WCSDG then turns its attention to the changes that need to be made in global governance, including rewriting the rule book for international trade, and reforming the international financial architecture. These are complex issues that the Commission touches upon with a great deal of sensitivity, recommending policy choices in some instances, and suggesting general lines of approach in others. In practical terms, the WCSDG prescriptions in their totality, point towards a singular lacuna. The policy choices proposed at the national level require a high degree of state autonomy and substantive devolution of powers to regional and local units. These requirements would not be met as long as the state continues to be confined within the straitjacket of international finance. In terms of their phasing over time, in other words, both the national and the global should proceed concurrently and in a closely synchronised fashion. Any form of resistance encountered on either of these tracks would bring the entire process to a rapid halt. The national, in other words, is stymied by the global; while the range of global options are circumscribed by the compulsions of the world's leading economies.

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