In 2003 I accepted the invitation of the Finnish and Tanzanian governments to join a small working group [22 members plus the government co-Chairs] made of up a broad range of people - from the corporate sector, the International Chamber of Commerce and the World Bank to NGO stalwarts, UN and government agency personnel and the former head of the World Council of Churches. We, the members of the "Helsinki Process on Globalisation and Democracy", are entrusted with producing by the end of 2005 a report which one hopes may differ and stand out from report-producing efforts to date. My contribution below uses the structure proposed at the first meeting by Finnish Foreign Minister Erkki Tuomioja. It is not impossible that other governments may join in backing the group's recommendations and normally those who disagree with parts of the final report will be given an opportunity to express minority views.Susan George is one of TNI's most renowned fellows for her long-term and ground-breaking analysis of global issues. Author of fourteen widely translated books, she describes her work in a cogent way that has come to define TNI: "The job of the responsible social scientist is first to uncover these forces [of wealth, power and control], to write about them clearly, without jargon... and finally..to take an advocacy position in favour of the disadvantaged, the underdogs, the victims of injustice."
The Helsinki Process
September 2005
The Helsinki Process
Introductory Remarks First of all, many thanks to the Secretariat for setting out our tasks in such a concise and helpful way and to Minister Erkki Tuomioja for providing us with a simple-though not simplistic-framework within which we can make comments and proposals. Please consider my own, hereunder, as work and thoughts in progress, subject to discussion and amendment. I am personally almost entirely satisfied with the four-part structure proposed by Erkki Tuomioja:
Allow me, however, to add a fifth question: 'Who, exactly, is "we"?' The world is not, unfortunately, one big happy family, a universal "we" of well-meaning though sometimes misguided people and institutions, genuinely horrified by the persistence of mass poverty, pervasive inequality and ecological destruction and seeking to rectify them. The state and the fate of the world are rarely determined by impulses of generosity, a sense of responsibility for the planet and a search for justice but rather by a set of sometimes conflicting, generally powerful, frequently rapacious interests, both public and private. Such interests, unconstrained by law, rarely accept that they owe anything at all to the earth or to the poor and weak. If this were not the case, "we" would already have put right the glaring wrongs which are clear to anyone who has opened a newspaper or turned on the television in the past several decades during which inequalities and environmental destruction have become increasingly visible. Proof of the deplorable state of the world is not lacking either, nor are prescriptions concerning what needs to be done-"we" are in fact swamped with "musts" and "shoulds". Another matter entirely is the power to bring about necessary change in the present context of the global rapport de forces. Surrounding oneself rhetorically with "musts" and "shoulds" is ultimately a sign of impotence and the more we call upon them in our Report, the weaker we will appear. So I would suggest that "we"-and this time I mean the Helsinki Group itself-confront honestly, that is, identify, the interests, the public and private institutions and, where necessary, the governments which stand against certain obvious global solutions. Our Report should not hesitate to name the forces which are stalling and preventing them. Let us not assume some great, consensual "we" animated by good will; let us proceed, rather, in the certain knowledge that measures which would genuinely improve the state of the planet and of humankind will be vigorously opposed should these improvements entail the slightest cost or sacrifice for a powerful minority, however small. Concurrently, however, it is also crucial that we try to identify the solutions on which a whole range of interests-from business and industry to the global justice movement-might agree, because if such solutions exist in theory they ought to be the easiest to put into practice. The Group should try whenever possible to point out how the longer-term interests of even these minorities would be served by positive social and ecological change and better conditions for the majority. They often seem [at least to me] blind to their own best interests. When we are able to make a case for these, by all means let us do so. A major problem with UN or special-group reports to date has been their tendency to assume an absence of obstacles and a kind of common-sense harmony between nations, the marketplace, international institutions and ordinary citizens. Faced with obstinate reality and opposition to change, the furthest these reports have ever gone is vaguely to deplore a lack of unspecified "political will". These documents have thus undercut their own credibility and diminished their interest, their impact and their relevance. Our own Report should recognise obstacles, disharmony and resistance to change. If these impediments didn't exist, the Helsinki [or any other] Group would be superfluous because "everyone" knows what measures are required and they would have been implemented long ago. I am not pleading for cynicism but for realism and a clean slate. If distinctions like these cannot be made by the whole group, and I can well understand that some might have to bow to certain diplomatic niceties, then I would hope at least for the publication of signed, minority views and disagreements somewhere in our Report. Consensus does not necessarily lead to relevance. If we want our work discussed, then we must be willing to make clear the content of our own discussions and make explicit our differences, in so far as these are found to exist. Part One: What is Wrong with this World and Why? This ought normally to be the shortest part of the Helsinki Group Report. Surely most people who care about these issues are tired of reading again and again the same World Bank [under]estimates of the number of people living on less than the Purchasing Power Parity [PPP] of a dollar or two a day; going hungry or without clean water, lacking proper health care and education, dying daily in childbirth or from preventable diseases. It's not that such information is unimportant, but if the sorts of readers who will be drawn to our Report don't know such things already then our task is probably hopeless. Unless we can come up with some startling new statistics and observations, let's keep them short or consign them to an annexe. We also know what everyone in the world requires, regardless of cultural preferences and religious differences or preferences: adequate food and clean water, energy for cooking and illumination, shelter and a modicum of privacy, basic health care and education, a clean and supportive natural environment, "decent work". I would add the freedom sometimes to take risks, including entrepreneurial risks in trying to improve prospects for oneself and one's family, which in turn implies reasonable freedom from fear and anxiety and the rule of law; the right to choose one's own political leadership at all levels of government and male/female equality of rights and opportunities; but these are not always simple matters culturally and religiously speaking. Surely one should add freedom from war and from State or non-State violence [that is, the right to the rule of domestic but also international law]. That such essential elements for a civilised existence are presently denied to the great majority of humankind proves that "we" have so far done an extremely poor job of managing our own affairs and those of the planet. Poverty, inequality, environmental destruction and conflict are at the root of these failures. Our Report must therefore, unlike other reports, examine what is at the root of poverty, inequality, environmental destruction and conflict. On the way to righting such wrongs, we can and should confront the often-quoted views of institutions like the International Monetary Fund. The IMF acknowledges that inequalities are growing both within countries and between them but claims that this doesn't matter as much as one might suppose because the 'floor' is inching upwards for everyone. The gains of China and India are then cited in support of this view. Both these countries are changing, yes, but both would be better seen as two countries, with rich, or at least richer, fast-growing areas and other parts still abysmally poor. Nor should an institution like the Fund be allowed to claim any merit whatever for progress in China or India which have both followed, in different ways, strong State-directed, interventionist, anti-neo-liberal policies diametrically opposed to those advocated for years by the IMF, the Bank and the US Treasury; otherwise known as the policies of the "Washington Consensus". A few years ago, the IMF/Bank also attempted to take credit ex post facto for the successes of the Asian "tigers" which also ignored their prescriptions, as did in earlier times the now-wealthy developed countries in North America and Europe. All these countries became prosperous and influential through policies combining protectionism and State intervention and investment. None of the successful nations ever opted for the choices the Fund now routinely forces upon everyone else. In the same way, the Bank and especially the Fund should be obliged to accept full responsibility for the consequences of more than twenty years of structural adjustment policies. The economic, not to mention social record of the IMF has been disastrous-at least as most people would define disaster. If economics were a "hard" science, this institution would have been obliged long ago to change its ruling paradigm because it doesn't work, if one defines "working" as benefiting actually existing human beings and societies rather than the enrichment of the few and worsening conditions for the vast majority in a given country.. However, if "working" means insuring continued debt repayment, resource extraction and political control by the North via Southern elites and through a variety of debt-defined carrots and sticks, then the Fund has fulfilled its mission and deserves nothing but praise. The world's earliest Declaration of the Rights of Man and the Citizen [1789] states in Article XV: "All public officials are accountable to society for their administration". [La société a le droit de demander compte à tout agent public de son administration"] Why should this principle cease to be true at the international level? Accountability is a necessary if insufficient condition for democracy and I would hope that that the Helsinki Group could agree that democracy is at least one of the basic conditions for attacking the ills of the world. Our Work Programme document already states that "The rising tide does not lift all boats". This recognition is helpful and a good starting point. To stick with the maritime metaphor, one could add [with illustrations] that, figuratively speaking, luxury yachts and cruise ships along with some 4000 un-seaworthy "rubbish ships", ["navires poubelles"] occupy most of the sea lanes and the berths in ports; that industrial trawlers are taking most of the fish whereas ordinary people have no access to a boat or only to leaky skiffs and beat-up tubs and they have no capital to purchase, upgrade or fix them either. As we throw the "rising tide" cliché overboard, we could also usefully jettison another bit of received "wisdom": "Give a man a fish and you feed him for a day. Teach him to fish... ." We already know the rest-just as "the man" already knows how to fish-he is not a fool and he has not been waiting around all these years for our benevolent instruction. His problem is not lack of skill or of will but rather of ownership and control over resources. He doesn't own an ocean-going vessel or fishing rights; the lake has been polluted, privatised or turned over to tourists; the shore-dwellers have been expelled or all the best places on the riverbanks are now occupied by stronger and more ruthless people than he. The question of why inequality is growing, as distinct from pointing yet again to its existence, does need to be addressed even though many of us believe we already know the answers. These are to be found first in increasing concentrations of wealth and power which reigning neo-liberal economic policies encourage; second in the destruction of various kinds of ecological and social "commons" or common property resources; finally in the dismantling of the Welfare State, mass privatisation and the damaging of traditional social networks which used to protect people. One could expand on these themes in many important ways. The first part of our Report must attack root causes. In most UN-type [or "independent commission"] reports, poverty, environmental destruction and human misery are somehow just there. No causative factors, no particular agency [in the philosophical sense], no wilful action is promoting or prolonging them. No one is responsible, except for those all-purpose pronouns "we" and "us". It's "our" fault. If we-the Helsinki Group-can't break with this timid but also tragic and a-historical tradition, then the rest of the Report is vitiated. If we offend no one, we will not have done our jobs; we shall have neither comforted the afflicted nor afflicted the comfortable. The section on What's Wrong with the World and Why? must fully take into account the responsibility of the North and northern institutions, public and private, for the existence and persistence of inequality, misery and the other ills which have been so often identified, while not glossing over the responsibilities of the South [see below] where most of the world's poor live. Research. Given the wealth of existing research material, it hardly seems necessary to commission further work on global inequalities, but if the Helsinki Group chooses to do so, I suggest as a consultant Giovanni Andrea Cornia, an economist who has worked on these questions both for the UN University [WIDER] in Helsinki and for UNICEF. UNCTAD had already summed up a huge amount of empirical work on growing inequalities in a 1997 report-we could easily find out who directed this work and get it brought up to date. I still think this section should be short because we shouldn't have to waste space convincing people of what is, or ought to be, perfectly obvious. Part Two: What is Being Done About it? Aside from the obvious answer ["not nearly enough"] we might start with the answer which Northern governments and institutions have systematically supplied: "These countries must get their own houses in order and straighten out their affairs by practicing "Washington Consensus" structural adjustment measures and reimbursing their debts". Over a hundred governments have had to comply with Structural Adjustment Programmes [SAPs] and meanwhile have been kept successfully divided among themselves. Every individual poor country faces its public and private creditors and the SAP designers, the Bank and the Fund, alone. Under these circumstances, even the largest debtors like Brazil or Mexico are virtually powerless. The LDCs can sometimes be faulted individually for corruption and poor governance and collectively for lack of unity and obedience to doctrine; but much of the blame for their worsening state lies with the Northern institutions if only because they are richer, more powerful and therefore must take more blame for doing harm just as they have more opportunity for doing good. To discuss debt and SAPS, the Report needs to begin with historically accurate figures concerning net transfers from South to North. Some benchmark questions would be:
Clearly debt has handed individual Northern institutions an extraordinary instrument of political control and given the International Financial Institutions unprecedented capacity to intervene, a capacity neither provided for nor foreseen in their charters. For the developed countries of the North, debt as a tool of power politics has nothing but advantages. Not only is it far more effective than colonialism, it is also less visible and less controversial; not well understood by the general public and costs virtually nothing-one even gets paid something! Debt offers many [short-term] gains for many powerful interests, including bureaucracies, in the North. We possess most of the statistics and also know that growth has collapsed over the past twenty years, so if these interests have another, so-far undetected motivation for maintaining their financial leverage over the poor, they should explain what it is. The devastation wrought upon people and the environment by structural adjustment policies has also been studied ad nauseam. This unfortunately does not mean that the research findings have been acted upon. The measures first devised in response to protest were collected in the so-called Highly Indebted Poor Countries [HIPC] initiative, followed by the face-lifted Poverty Reduction Strategy Papers. Both entail extra doses of structural adjustment and are more a part of the problem than of the solution. We do not need to re-invent the wheel in this area either. The CADTM Network based in Belgium regularly posts reliable figures and analysis; while Jubilee Research [to which our Helsinki Group colleague Ann Pettifor has links] has brought together much useful information on the debt of the poorest. As the World Bank itself now admits, this debt will never be paid-even by a substantial number of countries that have completed the HIPC process. The modest successes achieved by those countries [including Tanzania] that have received even a modicum of debt relief should be underscored because their governments really have improved health and education for their people the moment they were given the slightest financial opportunity to do so. We should also tackle the crucial question of remuneration of primary commodities. Why have World Bank and IMF structural adjustment policies emphasising exports been allowed to continue when their harmful impact has been demonstrated over and over again? One doesn't need a PhD in economics to recognise that if many countries are exporting a relatively narrow range of primary products and are all competing in the same global marketplace [because all must earn hard currency to service their debts] prices will plummet, as they have dramatically done. The only winners in this game are Nestle, Unilever and the like-these TNCs do not even reduce the prices of processed coffee, chocolate, etc. to final consumers. What about Western "overseas development aid" [ODA]? Here, too, we must pose some unwelcome questions, for example:
Are others as tired as I am of the pious pronouncements on the outcome of the UN-sponsored Monterrey aid conference in 2002? The United States did everything in its considerable power to prevent any new funding sources [for example international taxation schemes] from even being discussed in Monterrey. The Millennium Development Goals determined at the UN in 2000 are all very well; they are laudable objectives and governments did of course pledge to respect them, but it already seems clear that they are unlikely to be met under present circumstances. In fact, the Bank has even said so publicly. We owe it to the audience of our Report to describe in some detail who is actually financing whom. Even if the puny, 30 year-old Monterrey goal of 0.70% of Development Assistance Committee [DAC] countries' GDP were somehow miraculously met, the sum contributed by the DAC would still be substantially less than the current net transfers from poor to rich [DAC aid at 0.70% would come to about $150 billion at best whereas the annual net South-to-North transfer exceeds $200 billion]. Remittances from foreign workers in the North to their families and home communities now outstrip North-to-South ODA by nearly two to one and the large Northern banks and money-transfer agencies extract easily a billion dollars a year in commissions from these transactions. Nor is Western aid necessarily timely or well-spent. At a recent conference organised by the Socialist Group [PES] in the European Parliament, I was distressed if not unduly surprised to hear the Mozambican Health Minister explain that he could not get his hands on the pledged, if paltry $7 million needed to save tens of thousands of children by vaccinating them against measles. The EU's promised aid either didn't arrive in time [the Minister's version] or was perhaps stymied by his own finance ministry which had other priorities [the European Commission's version]. Surely there are hundreds of tragic stories like this. We also need a section in the Report concerning the trading opportunities which are open, and closed, to Southern countries, with particular attention to Northern practices like dumping and subsidies [especially agricultural export subsidies] that limit these opportunities. Some progress was made in Cancún due to Southern unity on agriculture and their rejection of the "Singapore issues". Environmental collapse is perhaps the most dangerous and least officially recognised threat to everyone in both North and South. Even the Pentagon is now seriously alarmed. An official report to the US Defense Department predicts imminent threats to security and vast disruption and damage to the economy as early as 2020 as wars for food and water erupt and unstoppable refugee movements get under way. Global warming will cost hundreds of billions of dollars and cause untold hardship for millions. We know it is progressing, yet the only proposal to tame it is the woefully unambitious Kyoto protocol-and even that isn't ratified as of this writing, mostly due to US refusal. China, India and other large developing countries are building, with the help of the World Bank, more and more coal-fired power plants and the Chinese are putting an additional two and a half million cars on the road a year. I have heard that bicycles have been banned in the centre of Beijing because they get in the way of cars. Dependence on petroleum has never been greater yet there seems to be little sense of urgency and no action worth mentioning is being taken. If the measures needed to "save the world" were merely political or financial, we might be able to wait, though at great cost to present victims. The environment, however, can't wait and nature has no reason to care about the continued existence of humanity, quite the contrary. As Nietzsche said, the earth has a skin and that skin has a disease called the human race. Let me be blunt: [Mostly] Western governments and [mostly] Western-dominated public and private institutions are now, through their action and lack of action, at best allowing, at worst abetting mass deaths and planetary collapse. Such statements are not polite. Can one nonetheless dream of an impolite Report? Research. There is little welcome news in this department and we already know a good deal about the lack of appropriate action. Some gaps in available knowledge do, however, exist: here are a few suggestions of topics which might be usefully covered: More and better employment is surely a crucial component of any solution to world problems, in the framework of what the ILO calls "decent work". All the human rights instruments include work as a basic right [as well as compensation for those unable to work]. We need better data on certain aspects of work. The UN [UNCTAD] World Investment Report publishes annual data concerning the number of transnational corporations and usually the numbers of their employees, These figures allow one to calculate that the TNCs, especially the largest ones, employ quite small numbers of people relative to their financial scope and total sales. In one of its early Reports, UNCTAD claimed that TNC employment never represented more than 1-2 percent of the total workforce except in small countries like Singapore or Hong Kong. It would be helpful if the WIR [or someone else] were to bring these figures up to date. From UNCTAD's data concerning the world's top 100 TNCs, one can also ascertain that each of their employees, from the CEO to the janitor, generates over $325.000 worth of sales per year. A credible study not just on TNC contributions to employment, if any, but also on the numbers of jobs they may destroy would be groundbreaking. . Who could tell us the impact on employment of massive privatisation programmes, mega-mergers and cross-border acquisitions? Who could calculate how many local jobs are displaced by TNC competition; how many people in which countries have been downsized due to delocalisation? Jobs lost to cheaper, worse-treated workforces are not confined to the North: but are now occurring massively in countries like Mexico and Malaysia. How many people lost their jobs when financial crisis and speculative assaults on the currency struck their countries, for example in Mexico in 1995 when some 28.000 small businesses are said to have failed? How many farmers have been ruined by cheap, subsidised imports of corn or rice or cotton and what has happened to them? We need a composite portrait of TNC impacts, including the proportion of bank credit they can monopolise in the South, and, perhaps most important of all, the amount of taxes they pay in each host country. If we are commissioning research, let's ask ILO to work on such issues and if ILO can't do so for political reasons then let's find independent scholars who can. The UN Centre on Transnational Corporations might have undertaken such work but it was discontinued long ago at the insistence of the United States. Part Three: What Needs to be Done? This section should cover at least the following four categories:
The responsibility of the North and of largely Northern-controlled institutions stressed so far does not mean that one lets Southern governments and institutions escape unscathed. In the following Strategies/How do we do it part, I will suggest "Democratic Conditionality" and greater democracy as ways of reducing waste, leakage, corruption etc. in the countries where the greatest number of people are now suffering as well as incentives for better behaviour by Southern governments. 1. The Environment The environment cannot be separated from other concerns although UN documents and conferences [except, partly, Johannesburg] have generally tried to keep it in a separate compartment. Environmental preservation and enhancement is the condition sine qua non for everything else we need to do. For reasons already explained, we-everyone, rich or poor-need a crash programme along the lines of the "Manhattan Project" that produced the first atomic bomb and ultimately ended World War II. Without such a programme, the devastation awaiting us will be far worse and widespread than the horrors of Hiroshima and Nagasaki. Our Report should therefore strongly espouse an overarching goal for the environment: to halt and reverse global warming, mostly by weaning ourselves from the drug of petroleum. [Can our colleague Peter Sutherland, Chair of BP, agree?] A crash programme, publicly financed [for example via a carbon tax] if the private sector won't do it, for developing renewable energy sources and promoting energy economy and efficiency is the first order of business, combined with draconian new construction and transport specifications. The World Bank and the regional Development Banks must be forbidden to lend for projects that increase global warming and must replace them with loans to encourage renewable and decentralised energy systems. We should encourage carbon taxes [but not carbon trading!] and stop exempting airlines from fuel taxes. The crash programme should include a psychological offensive to make people feel ashamed for driving SUVs or overheating their houses; governments should take the lead in energy-saving measures. Trade incentives [to be expanded upon in the following section] for goods produced in an environmentally friendly manner should be encouraged. Debt has catastrophic effects on the environment as countries are forced to cash in their natural resources for hard cash. Patent protection of 20 years, instated by the WTO TRIPs agreement helps to prevent newer, cleaner technologies from reaching countries most in need of them. Taxes reducing private vehicle use in cities [cf. London] and measures favouring public and collective transport should be on the list. One could propose plenty of other measures in other areas-for example making manufacturers responsible for recycling durable, heavy goods [appliances, television sets, automobiles... ] at the end of their useful lives: this would encourage them to use re-usable and lighter materials to begin with. Dangerous chemicals which have no "cycle" in nature and thus cannot be recycled should be leased to users and made far more expensive in order to encourage more natural substitutes. Consumer-producer cooperatives for organic agricultural production should be encouraged and if necessary subsidised at the beginning [it can be costly to switch from pesticides and chemical fertilisers to biological techniques]. These recommendations, like those that follow, are clearly open-ended. 2. People Most in Need of Help How can one not think first of the HIV-AIDS victims whose rapidly increasing numbers have now crossed the 40 million mark? The lack of funding despite many promises for the prevention and control of this scourge makes it seem almost as if the elimination of these people-virtually all of them poor-is not merely allowed to occur but is positively sought after. One can already see some of the longer-term effects of AIDS, like huge numbers of orphans or the collapse of agriculture for want of able-bodied workers in some parts of Africa. A few countries like Brazil or Uganda have managed to slow the progression of the disease. Their methods could be adapted and financed elsewhere [TB and malaria are other health priorities, as is the UNICEF programme for child health]. The ILO has published a valuable report on the costs and benefits of eliminating child-labour. It would not be especially expensive to do so, particularly compared to other spending [well under a billion dollars a year]. The Brazilian pilot project of the "Bolsa Escola" has been particularly effective in combating child labour. It is based on the idea of paying the mother a sum at the end of each month for up to three children if they have missed no more than 2 days of classes in that month. The result has been startling: better educated children of course, but also taller and healthier ones [they eat lunch at school], sharp reduction in petty crime when children are no longer hanging out in the streets and, presumably, more jobs freed up for adults in need of work. Such a programme should be made available to poor families everywhere, with special encouragement for girls [three extra years of female education can reduce birth rates significantly within a single generation]. Farmers are still half the world but their numbers are being reduced daily, by subsidised, competing imports, land-concentration, excessive space devoted to export crops, reduced ecological productivity and the like. Many experiments in natural and cost-free farm improvement [better water management, crop rotation patterns, natural pesticide and fertilisation techniques] have been carried out in a broad variety of climatic and soil conditions on an area equivalent to the surface of Italy. Genetically Manipulated Organisms [GMOs] are definitely not the answer to poor people's [or anyone else's] problems. International financing for extension of programmes for small farmers based on cost-free methods should be forthcoming, whereas GMOs which contaminate local varieties, pollute the environment and tie farmers to corporate providers of seeds and chemicals should be prohibited except for research under enclosed cultivation conditions. Many activists in the "alter-globalisation" movement are convinced that debt cancellation would be the single most effective measure to alleviate the hardships of people most in need of help. Properly handled, it would instantly improve health and education budgets, could free up funds for credit to small farmers and cooperatives, reduce land devoted to cash crops and therefore help to raise their prices on world markets-the benefits would be innumerable. As indicated earlier, the debt has already been paid many times over and will not-cannot-ever be paid back in its entirety. The arguments put forward by the IFIs concerning their inability to cancel sovereign debt do not hold water, especially if new money is made available for development through means shortly to be discussed. 3. Prevention and Cessation of Conflict Dozens of conflicts are presently active, most of them are internal to States, often failed States, and some like the war in the Congo have killed millions of people, amidst general indifference. The Israel-Palestine conflict provokes durable "clash of civilisations" hatreds yet is intractable so long as the United States remains an unconditional ally of Israel. Despite the failures so far, Europe and other nations as should still try to exert more pressure for a solution. Other conflicts could doubtless be kept under control if the UN had more resources. Some of these conflicts spill over into terrorism and thereby involve the developed as well as the developing countries. The size and the influence of the arms industry probably makes conflict the most difficult issue to solve since conflicts are as good for some businesses as they are terrible for people. 4. Reform of Existing Institutions For at least the past twenty years, the major international institutions-Bank, Fund, WTO-have been overwhelmingly under the influence of the United States and the so-called Washington Consensus. These institutions are undemocratic and unaccountable; citizens have virtually no influence on their practices. We know that cancelling LDC debt would automatically reduce the power of the Bretton Woods Institutions-one reason it is so fiercely resisted. Let me give as an illustration of intractability an on-going campaign in which I am involved. It concerns the WTO services agreement called the GATS [General Agreement on Trade in Services]. The GATS, although it advances gradually through "rounds", has for ultimate objective the privatisation and merchandising of all human activities, including health, education, culture, the environment, water, public services and so on. Progressive activists recognise that they have no chance of influencing the WTO directly, as it will remind them that it is merely a secretariat serving its member States. European citizens can have virtually no impact on the European Commission's policies although its unaccountable Trade Commissioner negotiates for all 15, now 25 member States. What, then, can be done aside from accepting an agreement as scandalous as the GATS? The only democratic option remaining where citizen resistance and opposition can be voiced is that of the individual European member State The GATS can only be stopped by opposition from nation-States, and they-at least this is our reasoning-can only be influenced by their own citizens expressed through elected bodies. This is the raison d'être of the GATS-Free Zones campaign which in France, as of July 2004 has inspired resolutions voted by nearly 500 city, departmental and regional councils. We have no guarantee of winning despite the fact that over 25 million French citizens already live in GATS-Free Zones but this example illustrates how cumbersome and difficult is the reform of existing institutions in a world context where democracy is absent and international bureaucracies are free to make their own rules-or bound to follow those set down by their most powerful members. This is one reason why the following section on "How to do it" is at once the most crucial and the most difficult to deal with. Part Four: How are we going to do it? What strategies must we adopt? PREAMBLE: Up to this point, I admit to begging the real question although I touched upon it in the first section when I asked why poverty, inequality and environmental destruction were increasing, as we know they are. Any self-respecting "alter-globalisation" or global justice movement participant believes he/she knows the answer. We would sum it up in the single word "neoliberalism", understood as the drift of the economy towards satisfying the needs of mega-corporations, financial institutions and world markets rather than those of ordinary human beings with little purchasing power. We see the economy increasingly serving capital, not society. One proof is that, at least in Europe, over the past 15 years capital has increased its share of the "value-added" from 30 to 40 percent while the share of labour has been simultaneously reduced from 70 to 60 percent. Extra money may not be a sufficient condition for doing what needs to be done, but it is certainly a necessary one. If all the members of the Helsinki Group accept this proposition and can agree that Official Development Assistance-only about $60 billion at its peak-will not do the job; if the Group can further agree that the Millennium Development Goals, as an absolute minimum target, should be met but never will be considering present scanty resources; then we must ask where the extra resources are to come from. It seems almost a foregone conclusion that individual nations, especially the largest and richest among them, the USA, are not going to give enough to make a real difference even if they inch painfully toward the goal of 0.70% of GNP, and as we have already seen, the funds would be insufficient even if they did. The only realistic source of extra funds must therefore be sought where it is-at the international level. While some resources will come from private foreign investment, this has to date been highly concentrated in about a dozen countries and no one should expect business to provide essential public goods. Transnational corporations are now able to avoid most taxes, with the result that they pay far less into national coffers and host countries are thus less able to provide the public services which have always been considered part of the "social wage" [in Europe health care, free education up to and including graduate level, subsidised transport, energy at reasonable cost, fast and effective communications and so on.]. As Professor Howard Wachtel shows, the share of taxes paid by TNCs into national budgets is constantly diminishing as corporations manage to escape by manipulating the new rules of globalisation to their advantage. Because the share of national taxes paid by TNCs is in steady decline, the fiscal burden falls upon those who are rooted in a particular place and must submit to taxes on income, on salaries, on consumption. This phenomenon strikes the entire developed world and creates constant tax competition favouring the lowest common denominator, sometimes to the point of caricature. For example, one new European Union member, Estonia, levies no taxes at all on corporations. Wachtel explains how billions in potential revenue to be used both for citizens' needs in the North and for achieving the MDGs could be captured. The idea of raising new global revenues through a unitary profits tax on TNCs is so important [and up to now so little known] that I am appending to this contribution a short article by Wachtel in which he explains the concept. Even more revenue would become available if tax havens were closed down. The OECD facility monitoring these offshore locations has made some headway by "naming and shaming" the worst offenders but it would be cheaper for the "international community" to provide a living wage to every inhabitant of the Cayman Islands, Nauru, et alia and simultaneously stop international companies [as well as sundry drug lords and other unsavoury types] from parking their money in such "fiscal paradises". Enron had over 700 subsidiaries registered in the Caymans, all quite legally. Bringing these billions back into the legitimate economy would create welcome revenues for governments and consequently advantages for citizens. Financial markets now handle currency trades amounting to about $1.500.000.000.000 [1500 billion dollars] a day, tax free. The Belgian Parliament, in a pioneering and historic vote [instigated largely by Attac], has approved a "Tobin-Spahn" tax on currency transactions, laying to rest in the process the many specious objections raised by bankers and other interests opposed to such a measure. This tax is two-tier: no more than one basis point for currency trades in ordinary times [the "Tobin" concept]; but rising to as much as 80% in cases of concerted speculative attacks on national currencies [the "Spahn" element, named for its originator, Professor Bernd Spahn]. Since the question of debt was sufficiently developed earlier, here I mention only in passing the need for genuine cancellation. The most effective tool to achieve it would doubtless be unity among the concerned governments which should jointly announce, say, a five year plan in which they would cease to service, each year, a further 20 percent of their debt. The Paris and London clubs should be terminated as their function has been mostly to bully individual governments. Further revenues could be raised internationally by fiscally targeting at very low rates purchases and sales of financial instrument such as stocks, bonds, options, futures; sales of perfumes and cosmetics; by taxes on advertising or airplane journeys-and of course on oil. The ideas for all these measures are relatively simple; their execution is not because powerful opponents see any move towards international taxation as opening Pandora's box. Here the problem of the "we" able to undertake the necessary changes is particularly acute. Here is the crux of the matter: among governments, the United States will certainly oppose debt cancellation, measures against tax havens [aside from accounts held by "terrorists" as specified in the PATRIOT Act] and any international instruments for raising fresh funds. The US sees as counter to its interests the creation of any multilateral funding mechanisms it cannot control as it now controls the IMF and the Bank. The situation might change marginally if John Kerry replaces George Bush, but only marginally because the American State is riddled with corporate influence at every level and no national politician can so much as contemplate election if he/she displeases these constituents. An American foreign policy agenda perceived as even mildly "anti-corporate" is simply not on. The only alternative for those who want to advance is consciously to leave the US in the wings, consigned to a waiting list as it were, because we know without further study that this country will not accept a world in which it would be, at best, a primum inter pares. We indeed face the problem of the rule of law, virtually absent at the international level. The global justice movement can agitate for change but not enforce it, and where law is absent, the market intervenes and soon takes over. "Between the strong and the weak, freedom oppresses and the law liberates". [" Entre le fort et le faible, c'est la liberté qui opprime et la loi qui libère "-Lacordaire]. Practically speaking, international taxation law will probably have to start with the euro zone in order to circumvent Great Britain, faithful ally to the US and another huge obstacle to change. But the fact that one cannot capture the whole world at the outset is no reason to forgo advances in civilised behaviour. Assuming - a large assumption - that one can collect fresh funds through such instruments [international taxes plus action on tax havens plus debt cancellation] how is one to spend them? In a recent book [Another World is Possible If... Verso, London and New York, 2004] I propose a scheme called "democratic conditionality". I would greatly value the opinion of our Tanzanian colleagues on this point. In such a scheme, international revenues would be collected by a new UN or self-created agency, made up mostly of auditors and finance professionals. A country applying for use of new development funds would be required first to hold elections [with outside observers where necessary] on a both a geographical and a sectoral basis in order to constitute a Council made up of representatives of its people from every region and from all the major sectors of civil society [peasants, workers, entrepreneurs, students, women, health and education professionals, and so on]. This Council, sitting alongside the government, would be responsible for determining the order of national priorities to be funded and would oversee the spending on these once funding was secured. The UN Agency could also dispatch its teams of outside auditors where national capacity was weak or suspected of corruption. Money may not be everything, but money plus greater democracy could go a long way towards improving development prospects. Countries should also be encouraged to re-nationalise wherever desirable those sectors that Bank/Fund SAPs obliged them to privatise. All the opinion polls show that people from the rich countries where virtually all the new money would be raised are in favour of development aid and a better deal for the South, but they will not tolerate a system in which one simply hands over money to a government and hopes for the best. The same kind of democratic conditionality should be applied to debt cancellation: the people concerned must decide how to employ freed-up funds according to their own views on what is most important for their future. Even with such an elected Council, some national elites might still find ways to co-opt its members. We could ask Transparency International, the corruption-rating NGO, to help us to make such a system corruption-proof, fool-proof and dictator-proof. Such a system would neither replace nor discourage private investment-quite the contrary. Since the State would presumably be funding reliable infrastructure, better educated and healthier citizens and a cleaner environment, legitimate foreign business interests should find only advantages in investing in such countries. But what if a country exercised its sovereign rights and refused to hold elections for a Council? The valid objection here is that, by refusing new aid to them, one would penalise the people of the most repressive, irresponsible States who are already in a bad way. This is true, but perhaps only for a while. The international stigma attached to such a refusal, plus witnessing substantial funds arriving in the treasuries of one's neighbours might concentrate their minds wonderfully. A more limited model for such a structure is the participatory budgeting system of about 80 Brazilian cities, including Porto Alegre, where a complex, pyramidal electoral system starting with about 40 families and moving up to the levels of neighbourhoods and the whole municipality has reduced corruption and waste to virtually zero. The citizens keep an eagle eye on what is done with their money. The world trading system currently favours what progressive activists call the "race to the bottom". Countries that treat their work forces the worst and practice the fewest environmental safeguards are thereby able to undersell those that do better on both counts. Responsible countries practising the most ethical behaviour produce more costly goods and lose markets. The only way to overturn such a system, which benefits only capital, is to make the trading system reward countries that are most socially and ecologically responsible. If the ILO, and some yet-to-be-established international environmental agency were to rate countries at similar levels of development on their work-force and environmental practices, the goods of the best performers in these areas could be given quotas or preferences. One would be careful to place in competition only countries with similar GNP per capita, so that Mali, say, would not be competing with Brazil, much less with the US. But within each category based on the level of development [perhaps on a scale of one to eight or ten], the best performers should be rewarded by trade preferences. Through its Dispute Resolution Body, the WTO boasts a functioning, constraining international legal system able to impose sanctions on recalcitrant States, but the DRB is based only trade law. Its jurists should be obliged to respect international law made elsewhere, notably human rights instruments and environmental conventions. In the "miscellaneous" category of what might be done, Hernan de Soto has proposed giving land and property title to poor people on any assets they occupy as a way of instantly increasing their worth and capacity to borrow. Grameen-bank-type credit schemes could be generalised by requiring commercial banks to reserve a portion of their loan funds for these sorts of clients, but they should lend to collectives and cooperatives as well as to individuals. To prevent people from hacking or bombing each other to bits, we need a serious international peace-keeping and inter-positioning force to go wherever the UN says it should go, whether invited by the countries concerned or not. Such a force would normally be accompanied by emergency relief professionals. It needs to be financed at whatever scale proves to be necessary by the new revenues raised through international taxation. As Cancún proved, the only winning strategy for countries of the South is unity. This WTO ministerial meeting was the first at which the North did not get its way, because the G-20 and the G-90 prevented such an outcome. One felt suddenly carried back to the 1970s and the days of the New International Economic Order, to which the debt crisis called a firm halt. Similar Southern unity on debt and on other dossiers could do wonders. It's relatively easy to make proposals but as noted at the outset, none will become reality without the participation and alliances of actors more precisely defined than as a mere "we". These actors must in turn bring pressure to bear on governments and international agencies. The global justice movement sees itself as one such actor. It is forging alliances with trade unions, ecologists, the peace movement and other social forces but the links are not yet strong enough and we need better organisation. The movement is prepared to make alliances with some heretofore unlikely partners, including some businesses and with progressive governments, but for the most part it feels it has identified its adversaries and has few illusions that they will acquiesce without a fight. The rapport de forces is, however, changing and the first place it is changing is in people's minds. They can see that the neo-liberal system is not working for anyone but a tiny minority and they no longer believe that it is inevitable or that they must accept it as the only one available. They are now far more prepared to fight for their convictions and for a more just and peaceful world than they were even five years ago. If we take a positive attitude to our inevitable disagreements within the Helsinki Group, our Report can be a significant contribution to that world. See also TNI Helsinki page |
Text Size:
Current Size: 100%
![image[node-id]](http://www.tni.org/sites/www.tni.org/files/imagecache/4teaser-small/reports-images/graphic1.gif)
![image[node-id]](http://www.tni.org/sites/www.tni.org/files/imagecache/4teaser-small/reports-images/landgrab.jpg)
![image[node-id]](http://www.tni.org/sites/www.tni.org/files/imagecache/4teaser-small/reports-images/green-economy_page_01.jpg)
![image[node-id]](http://www.tni.org/sites/www.tni.org/files/imagecache/4teaser-small/reports-images/brazilsugarcanepath.jpg)