LATIN AMERICA: Globilisation Needs New Form of Government

By Estrella Gutiérrez Reprint | | Print |

Estrella Gutierrez

CARACAS, Jan 10 1996 (IPS) - The nations of Latin America and the Caribbean will tell the world community of the pressing need for new form of world economic government to deal with globilisation, in a meeting in Caracas next week.

This new form of government must be based on transparent management of the three economic pillars; money, finance and trade, said Permanent Secretary of the Latin American Economic System (SELA) Carlos Moneta.

This would be the only way to “control” the changes provoked by globalisation which, given the lack of regulation, creates new North-South differences and asymmetries, while it also increases problems in the richer countries, he said.

The new management must also be based on linking the social and economic sectors on a world level, because without this, all efforts for liberalisation and modernisation are doomed to failure.

Moneta told reporters that these proposals will be analysed in a regional consultative meeting in the SELA headquarters, from Tuesday to Friday of next week. The discussions will be based on a document developed by the organism.

The meeting will be preceded by an informal reflection session which will form part of the regional consultations in the run up to the ninth United Nations Conference on Trade and Development (UNCTAD IX), in late April in South Africa.

The Latin American and the Caribbean nations are on the threshold of the 21st century, and in the last few years they have made a great effort to develop deep, unilateral liberalisation and modernisation reforms, as did most of the other Southern nations.

But these adjustments, and their tough social impacts, were not reflected in the industrialised North, nor in the international system, said Moneta, and this has formed a contradiction which gets more economically and socially explosive every day.

He stressed that this trend must be corrected.

Just one year after the Uruguay Round of global trade negotiations, it is already evident that these agreements were not sufficient to rule trade in the 21st century, said Moneta.

The liberalisation of the financial area also led to an uncontrolled flow of capital, in a sort of “letting the genie out of the bottle,” that deprived of adequate regulation has already shown that it can create hurricanes to lash the formal economy.

The new phenomena in the increasingly interdependent world economy, are the new trade and environment-linked issues, which reveal links like poverty and trade in the region.

SELA considers that the new concept of governability has to be approached on two levels, the internal and external.

Internally, this new form of government must “reduce poverty, through long-term social policies, consistent with macroeconomic policies.”

It also requires State capacity to define and carry out policies which sustain this objective, along with the competivity of the businesses and sustainable or ecologically conceived development.

Externally, they need norms that are the product of a process shared by all nations and not the imposition of a directive, like that the Group of Seven (G-7) most industrialised countries has already started to draw up.

SELA also suggests that if the rules are not transparent and controllable in the monetary, financial and commercial sectors, the combination of the creation of blocks and globilisation will only serve to increase the present inequalities borne by the South.

Another undesirable consequence of globilisation will also be maintained, “maximising the effects of the turbulences in the world economic system,” said Moneta.

The largest inequalities bourne by the region, he said, are poverty and social polarisation, technological, training and educational backwardness, and the lack of access to financially stable sources.

For SELA, UNCTAD must have a special role in designing the form of government, added to the ruling global triad, of the International Monetary Fund (IMF), the World Bank and the World Trade Organisation (WTO).