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There can be no doubt that unless there is urgent action we are going to fail to reach the Millennium Development Goals by 2015. This year, 2005, offers a once in a life time opportunity to take that action. Across the world, millions of people are joining what could be the biggest ever social movement for change. No longer are they willing to allow 30,000 people to die everyday of extreme poverty. They have joined the Global Call to Action Against Poverty (GCAP).
The campaign has 4 main aims. We are calling for a dropping of poor countries' debt, and for more and better aid. Campaigners in developing countries are also calling for their own governments to eliminate poverty and achieve the Millennium Development Goals in ways that are sustainable and implemented in a way that is democratic, transparent, and accountable to citizens. But most importantly of all, we are calling for trade justice – to manage trade and globalisation in the interests of the poor, not at their expense.
In the UK, the campaign is called MAKEPOVERTYHISTORY. Since it’s launch in January, the campaign has caught the eye of both the public and the UK Government. The Commission for Africa, Chaired by the British Prime Minister Tony Blair and including the Chancellor Gordon Brown and the anti-poverty campaigner Bob Geldof, recently published it’s findings. The result was remarkable – in its detail it effectively backed all four of our demands.
A marked success was its condemnation of an evil that many anti-poverty campaigners have been campaigning against for years – that of enforced liberalisation.
Enforced liberalisation is the forcing of neo-liberalism on poor countries by the rich world through the global financial institutions the World Bank, International Monetary Fund & World Trade Organisation. Neo-liberalism is an ideology that champions the wisdom of the market over Government intervention. It maintains that we needn’t worry about poverty reduction, because that will automatically occur through the process of economic growth. And economic growth cannot happen if there is high amounts of inflation, which is, according to neo-liberals, caused by excessive Government spending. Unfettered free trade is championed - all barriers to trade should be removed, and all subsidies (that is support to farmers and industry) should be cut as this ‘distorts’ the market making it inefficient. Enforced liberalisation through the IMF and World Bank occurred in the form of Structural Adjustment Policies (SAPs) throughout the 1980s.
However, the effects of the SAPs forced on Latin America and Sub-Saharan Africa were devastating. The idea that growth automatically means development is not demonstrated in practice. Not only did the IMF prescriptions of the 1980s in Latin America result in lower growth rates (after a temporary burst) in the 1990s than the 1960s (2.9% to 5.4%) the benefits of the growth was concentrated in the top 10% of the population . Neo-liberals believe in trickle down economics, they believe that the benefits of growth will automatically trickle down to the poor – “a rising tide lifts all boats.”
Joseph Stiglitz, a former World, dismisses this notion. “Sometimes, a quickly rising tide [rapid liberalisation], especially when accompanied by a storm [instability of market forces], dashes weaker boats against the shore, smashing them into smithereens.” In the nineteenth century, the UK had enormous growth rates, yet mass pauperism persisted.
Haiti is one example among many of the effects of rapid trade liberalisation. From a position of near self-sufficiency in rice in the early 1990s, by 1999 the national production (and income from) rice halved.
In 2003, the Ghanaian government was forced into a dramatic U-turn within days of announcing its decision to protect its local poultry and rice farmers from subsidized imports. The pressure placed on Ghana by the IMF made the government reverse its decision and remove barriers that would have allowed local farmers to compete fairly. Ghana enjoys less than half a vote in IMF decision-making structures, yet found its internal economic policy dictated by the body. The World Bank and IMF have made lending to Ghana conditional on opening up agricultural markets, including the rice market. Ghana’s domestic rice production has now collapsed and the US provides 40% of Ghanaian rice imports.
Whilst it was indeed a great success for them to condemn enforced liberalisation, I never believe it is good enough simply to say no. No movement for change can rely on simply opposing the status quo – we have to provide an alternative. “There Is No Alternative,” Margaret Thatcher said once. There is. It’s not free trade, it’s trade justice.
So what do we propose? What is trade justice?
Well lets make a few things clear to begin with. Arguing against free trade is not arguing against more trade. It is arguing against a specific ideology - market fundamentalism, also know as neo-liberalism or progressive liberalisation.
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David Taylor
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