DEVELOPMENT: Rich Nations Seek a Level Killing Field

By Thalif Deen Reprint | | Print |

Thalif Deen

UNITED NATIONS, Sep 30 1999 (IPS) - The message from the podium at the new session of the UN General Assembly has been clear and to the point: liberalisation of trade and open markets are killing some of the fragile economies of the world’s poorer nations.

Still, declares Malaysian Prime Minister Mahathir Mohamad with his usual flair for sarcasm, the rich nations of the world insist on a level killing field – “this way, they say, competition will be fair.”

Complaints against globalisation have come from a cross section of developing nations – ranging from Malaysia and Jamaica to Bhutan and Tanzania – who say that free trade and currency de- controls are making some countries richer – and most others poor and poorer.

Mahathir, whose country’s economy was nearly devastated by Western currency speculators, admits that the unrestricted flow of goods and services across borders may be good for a while.

“But eventually it will destroy markets and result in contraction of world trade. The world actually will become poorer because of free trade,” he says.

Mahathir points out that, unfortunately, the ground rules for the poorer nations have been laid down by the rich and the mighty. “The world should be borderless, that capital, goods and services should flow freely between countries and there should be no discriminatory taxes to protect local industries or products,” he says.

The rich countries also say that there should be a level playing field, without conditions attached to foreign banks and businesses wishing to operate in developing nations who must have national status like those given to local businesses.

“But can competitions between giants and dwarfs be fair even if the playing field is level?,” Mahathir asks.

Addressing the 188-member General Assembly, Tanzanian President Benjamin William Mkapa has been equally sceptical of globalisation. “As we enter the century of globalisation, let all governments ask the question: are we globalising prosperity, or are we globalising poverty?” he queries.

Mkapa believes that the process of liberalisation and globalisation has profound implications for Africa and other developing nations – in terms of their position in the world economy, their development, the nature of their economic policies and their impact on economic sovereignty.

“Are we striving for the kind of political correctness that eschews affluence and poverty, or that which manufactures euphemisms for poverty – pretending it will go away?” he ponders.

Despite positive macro-economic achievements in recent years, the average African household now consumes less than it did 25 years ago.

“The community of nations should rethink the mechanisms and policies that underpinned the functioning of the global economy, in order to create an international environment conducive to the rapid economic development of the world’s poorer nations,” Mkapa says.

The Tanzanian president maintains that the United Nations will be measured in the coming century by, among other things, the degree to which these issues – particularly the development dimension – is addressed.

Expressing the sentiments of most Caribbean countries, Jamaican Foreign Minister Seymour Mullings says that the current orthodoxy of free markets and the development model based on liberalisation, deregulation and privatisation is not fulfilling its heralded benefits in trade and investment flows.”

“There is evident need to review the prescriptions and to promote a development policy which takes more into account the specific socio-economic context of developing countries and to devise more equitable arrangements in international economic relations,” he says.

Mullings says the differences in levels in resource endowments, the early advantage in modernisation of production processes, capital accumulation, and technological development – have helped consolidate the dominance of developed countries in world production and trade.

“Those who have started later in the day will not find it easy to close the gap,” he warns.

Lyonpo Jigmi Y. Thinley, Foreign Minister of the landlocked kingdom of Bhutan, admits that globalisation offers unprecedented opportunities for sustained economic development.

“Paradoxically, the rapid processes of change and adjustment have been accompanied by intensified poverty, unemployment and social disorientation,” he says. “Fears that current patterns of market-driven globalisation may even give rise to further marginalisation of developing countries are not altogether unfounded.

“All these clearly indicate that there is an acute need for balance, to forge a middle path for the process of globalisation.”

Indonesian Foreign Minister Ali Alatas says that the international agenda has been steered by developed countries to open doors for their foreign investments, private capital flows and their exports, This has led to the eclipse of development.

Technology unlocks the power of globalisation which has been used by the strong to press their advantage over the weak, says Alatas. “Our tragedy is not in our ignorance but in the waste of our wisdom; the truth is that we know the solutions to our problems.” he added.