TakingITGlobal - Panorama - Making Trade Fair

Published on: Mar 31, 2005

Topic:

Type: Opinions

https://www.tigweb.org/express/panorama/article.html?ContentID=5331

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.

We recognise that if Africa, East Asia, South Asia and Latin America increase their share of world exports by just 1%, it could lift 128 million people out of poverty. 1% increase in Africa’s share of world trade would generate $70 billon – 5 times more than the continent receives in aid and debt relief.

We are calling, first and foremost, on World leaders to ensure that governments, particularly in poor countries, can choose the best solutions to end poverty and protect the environment.

Countries should be allowed to manage their own economies and target those most in need, economic reforms need to be properly sequenced and paced – and countries of south-east Asia are good examples of where this has happened. In fact, what many people do not realise (and what the neo-liberal free traders are keen to cover up) is that the economies of south-east Asia which have developed so successfully over the last three decades (Japan, South Korea, Taiwan, Malaysia and so on) have followed almost exactly the same course. They have had state intervention, high levels of social investment in health and education, and relatively egalitarian societies. Free trade, it turns out, is not the cause of economic development, but a consequence of it. The evidence shows that industrial development and poverty reduction require the application of social democratic principles, rather than neo-liberal ones.

Secondly, we want an end to export dumping that damages the livelihoods of poor rural communities around the world.

It is a great hypocrisy and double standard that whilst the rich countries rig the rules of global trade by forcing free trade on poor countries and forbidding them from protecting themselves, they heavily subsidize themselves.

The European Union (EU) subsidizes its domestic agricultural production aggressively. Around half the EU’s annual budget is spent on the Common Agricultural Policy (CAP). Despite recent reforms, current EU policies fail to deliver an environmentally and socially sustainable agricultural sector in Europe. The majority share of benefits continues to go to large-scale farmers and processing companies, and subsidies tend to encourage industrial farming methods, with negative impacts on the environment and development. The dumping of EU agricultural exports, such as sugar, at prices below the cost of production drives down world prices, costing vulnerable households income and poor countries foreign exchange. In some cases, subsidized EU exports also push farmers in developing countries out of local markets. This is unacceptable when more than 70% of the world’s poor depend on agriculture for all or part of their income.

The UK government must use its EU Presidency to bring forward reform of the CAP so that it ends the dumping of agricultural goods on international markets and only supports environmentally and socially sustainable agriculture. The EU support system is re-oriented to deliver sustainable farming, environmental protection, job creation, rural development, support to small-scale farmers, the development of local food economies, and enhancing public health.

Thirdly, we want World leaders to make laws that stop big business profiting at the expense of people and the environment.

While efforts to encourage the positive impact of companies should continue, new laws are needed to hold increasingly powerful corporations to account for their negative impact. For example, the UK government must follow the Corporate Responsibility principles for business and make reporting of the global social, human rights and environmental impact of UK companies mandatory.

If the Commission for Africa report’s condemnation of enforced liberalisation was a great success, greater still was its endorsement to our vision of trade justice (in all but name). Even if the report did not go far enough in some areas (in particular, in failing to call for effective regulation of multinational corporations operating in Africa).

This change in rhetoric is remarkable, but it needs to be followed up with real change and action. The UK Government and the other members of the G8 (France, US, Germany, Italy, Japan, Canada & Russia) need to ensure that when they meet for the G8 Meeting in July and at the WTO Ministerial in December, the outcome is real action; dropping of the debt, more and better aid, and most crucial of all -- trade justice.

And to ensure they do that we need to do all we can to keep up the pressure on them! To conclude, here are 4 actions you can take:

1. Visit the Global Call to Action Against Poverty website and see what is happening in your country! http://www.whiteband.org
2. Wear a white band – the symbol of the campaign! http://www.whiteband.org/actnow
3. From 10-16 April, millions of people will be taking part in the Global Week of Action on Trade. See what is happening in your country: http://www.april2005.org and http://www.whiteband.org/updates/GWA
4. If you can make it, demonstrate in Edinburgh in Scotland on 02 July. Millions will gather under the MAKEPOVERTYHISTORY banner ahead of the G8 Summit, which is to be hosted in Gleneagles in Scotland from the 06-08 July. http://www.makepovertyhistory.org/g8.html

« return.



by David Taylor
Published on: Mar 31, 2005
Topic:
Type: Opinions
https://www.tigweb.org/express/panorama/article.html?ContentID=5331


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. We recognise that if Africa, East Asia, South Asia and Latin America increase their share of world exports by just 1%, it could lift 128 million people out of poverty. 1% increase in Africa’s share of world trade would generate $70 billon – 5 times more than the continent receives in aid and debt relief. We are calling, first and foremost, on World leaders to ensure that governments, particularly in poor countries, can choose the best solutions to end poverty and protect the environment. Countries should be allowed to manage their own economies and target those most in need, economic reforms need to be properly sequenced and paced – and countries of south-east Asia are good examples of where this has happened. In fact, what many people do not realise (and what the neo-liberal free traders are keen to cover up) is that the economies of south-east Asia which have developed so successfully over the last three decades (Japan, South Korea, Taiwan, Malaysia and so on) have followed almost exactly the same course. They have had state intervention, high levels of social investment in health and education, and relatively egalitarian societies. Free trade, it turns out, is not the cause of economic development, but a consequence of it. The evidence shows that industrial development and poverty reduction require the application of social democratic principles, rather than neo-liberal ones. Secondly, we want an end to export dumping that damages the livelihoods of poor rural communities around the world. It is a great hypocrisy and double standard that whilst the rich countries rig the rules of global trade by forcing free trade on poor countries and forbidding them from protecting themselves, they heavily subsidize themselves. The European Union (EU) subsidizes its domestic agricultural production aggressively. Around half the EU’s annual budget is spent on the Common Agricultural Policy (CAP). Despite recent reforms, current EU policies fail to deliver an environmentally and socially sustainable agricultural sector in Europe. The majority share of benefits continues to go to large-scale farmers and processing companies, and subsidies tend to encourage industrial farming methods, with negative impacts on the environment and development. The dumping of EU agricultural exports, such as sugar, at prices below the cost of production drives down world prices, costing vulnerable households income and poor countries foreign exchange. In some cases, subsidized EU exports also push farmers in developing countries out of local markets. This is unacceptable when more than 70% of the world’s poor depend on agriculture for all or part of their income. The UK government must use its EU Presidency to bring forward reform of the CAP so that it ends the dumping of agricultural goods on international markets and only supports environmentally and socially sustainable agriculture. The EU support system is re-oriented to deliver sustainable farming, environmental protection, job creation, rural development, support to small-scale farmers, the development of local food economies, and enhancing public health. Thirdly, we want World leaders to make laws that stop big business profiting at the expense of people and the environment. While efforts to encourage the positive impact of companies should continue, new laws are needed to hold increasingly powerful corporations to account for their negative impact. For example, the UK government must follow the Corporate Responsibility principles for business and make reporting of the global social, human rights and environmental impact of UK companies mandatory. If the Commission for Africa report’s condemnation of enforced liberalisation was a great success, greater still was its endorsement to our vision of trade justice (in all but name). Even if the report did not go far enough in some areas (in particular, in failing to call for effective regulation of multinational corporations operating in Africa). This change in rhetoric is remarkable, but it needs to be followed up with real change and action. The UK Government and the other members of the G8 (France, US, Germany, Italy, Japan, Canada & Russia) need to ensure that when they meet for the G8 Meeting in July and at the WTO Ministerial in December, the outcome is real action; dropping of the debt, more and better aid, and most crucial of all -- trade justice. And to ensure they do that we need to do all we can to keep up the pressure on them! To conclude, here are 4 actions you can take: 1. Visit the Global Call to Action Against Poverty website and see what is happening in your country! http://www.whiteband.org 2. Wear a white band – the symbol of the campaign! http://www.whiteband.org/actnow 3. From 10-16 April, millions of people will be taking part in the Global Week of Action on Trade. See what is happening in your country: http://www.april2005.org and http://www.whiteband.org/updates/GWA 4. If you can make it, demonstrate in Edinburgh in Scotland on 02 July. Millions will gather under the MAKEPOVERTYHISTORY banner ahead of the G8 Summit, which is to be hosted in Gleneagles in Scotland from the 06-08 July. http://www.makepovertyhistory.org/g8.html « return.