The Dynamics of European Development: A View for Asia

Asia Europe People's Forum I
29 February 1996
Article

   

Asia Europe People's Forum I,
Bangkok, Thailand, February 27-29, 1996


THE DYNAMICS OF EUROPEAN DEVELOPMENT
A VIEW FOR ASIA
Andy Rutherford
One World Action
Paper presented at the conference Beyond Geo-politics and Geo-economics: Towards a New Relationship Between Asia and Europe, Bangkok, 27-29 February 1996
Published in ASEM Trading New Silk Routes. Beyond Geo-politics and Geo-economics. Towards a New Relationship Between Asia and Europe

I invite you to be tourists in today's Europe. I am your guide and I am assuming that you are tourists with irrepressible concerns for economic, social and political rights and women's human rights. You are special tourists. I will take you through a little history, we will visit some monuments, look at the current attractions and distractions. I will also show you what you are not meant to see or know. We will look at some coming events and like all good tours we will end with a special surprise.

A brief history

The roots of the European Union lie in the resistance to totalitarianism during the Second World War. Then there was a belief that the best way to avoid future wars between states in Europe was for them to be more and more inter-dependent and bound together economically and politically. This was gradually complemented by a dominant view in the majority of countries that social stability could be promoted by the respect of the basic rights of European citizens especially in the form of social welfare and rights to and at work. This broad 'social democratic' consensus, has been increasingly eroded since 1980 by the growing dominance and demands of the neo-liberal approach to state and economic activity, but the rhetoric remains. This is seen in the continuing formal support for mixed economies in most states and a potentially quite strong facilitating, limiting and regulatory role still strong in some nation states and European institutions. A constant theme in today's Europe is the gap between the rhetoric this leads to and the reality you will see on your tour.

In external relations, one of the subsequent justifications for this approach was the Cold War. However the world has changed. The end of the Cold War and the fall of the Wall, the unification of Germany, the search for a new relationship with Eastern Europe and the former Soviet Union, Europe's new position as one of the world's three competing trade blocks, not forgetting the war in the former Yugoslavia, provide some of today's key coordinates. They are essential in understanding the current commitment to enlargement which will dominate Europe and its institutions for the coming decades.

This leads us to some key monuments. I will only show you three: the European Parliament, European Commission, the implementing institution of the European Community, its secretariat and finally the Council of Ministers which is a series of committees, councils, of the 15 member states which from Prime Ministers downwards deal with specific European level decision making and policy. Two groups of elected representatives - the European Parliament and Council of Ministers, normally means a power struggle and this is no exception. Like all good monuments it is not the bricks and design that are of interest but the foundations and financing that are key.

Any guide to Europe today must begin with an analysis of power. The centre of political power remains the Council of Ministers. The historic Treaty of Maastricht has led to greater powers for the European Parliament and European Commission - however there still remains a major democratic deficit. There is also the key question of the relative power that European level political institutions have over the key financial and industrial institutions including European based Trans-National Corporations. At present, at the European level, the power lies more with business that the political institutions though the Parliament and Commissions. However the Treaty of Maastricht did ensure an increase in the powers of the Commission and Parliament but they still need much greater powers. These are generally being blocked by the Council of Ministers, the Member States. So, key to understanding Europe today is, on each issue, how much power lies with the different Councils of Ministers and the European Parliament and the European Commission.

Attractions

First, social policy and labour rights. Since the 1960s there have been positive actions to try to help create jobs, legislation on community wide rights for equal pay for equal work, and later, on health and safety standards. Since 1991 all but one of the members, the UK, have agreed a social charter on fundamental social rights, which covers everything from freedom of association and industrial democracy to social security protection. This has led to the possibility of pan- European collective bargaining and minimum wage levels. However this has increasingly created an aristocracy of labour which is quite large. This is generally concentrated in the formal organised economy and state sectors. In many countries there is also a strong racial and ethnic division with many migrant and black workers excluded from the aristocracy. What of everyone else? We will see later.

Second, the existence of European level institutions which are elected democratically. Although they are relatively weak they are increasingly able to develop and implement legislation across Europe. As a result they are beginning to work, in theory, at the level of trans-national corporations.

Third, a commitment, which is evolving and yet to be fully exploited, to the transparency of decision making and accountability of the institutions.

Fourth, the possibility for the European Union to act as a block with a mandate and policies in the multilateral institutions and in international negotiations including the UN Conferences. This has positive and negative effects.

Most people then add fifty years of peace but here have been a number of ongoing national and peoples' struggles which have been key parts of the last 50 years within Europe itself.

Distractions

The key distraction is growth. Economic growth is widely claimed to be happening and is a statistical reality. However the current pattern of economic and industrial development is leading to growth without creating jobs and most would argue is leading to less full time employment. The spectre of growth with long term and growing levels of structural unemployment is a dominant reality especially for millions of women. Even in work there are many key changes under the umbrella of growth. As a key report from Women in Development Europe (WIDE) states 'Employment patterns, working conditions and income distributions are being profoundly altered by the freeing up of labour, capital and financial assets in the European Union.'

New forms of competition are emerging as business is being deregulated and work casualised. Trends towards part-time work, piece work in the home, and short term contracts have occurred largely in traditional female job enclaves.

WIDE has calculated that for the European Union as a whole female unemployment is 152% that of men and 3/4 of women with jobs in the EU work in the service sector. 23% of women work part-time as opposed to 4% of men. Despite legislation women in manual and non-manual work across Europe are paid less on average than men, even up to 45% less as in the UK.

Overall the trends to greater casualisation, short time contracting, all too familiar in Asia, are leading to a significant increase in insecurity and poverty whilst in work. Unemployment which officially reaches 23% in Spain with over 60% of Spanish people below 25 our of work has contributed to three key issues:

  • The terrible social and human cost in such poverty;
  • Alienation from the political process something which is very strong in tens of millions of young people across Europe;
  • Significant growth in the informal and illegal economy as part of survival strategies.

This has in turn led to crisis for states and the EU in meeting the social and welfare costs. This is ironically a key factor in making the next phase of European integration, monetary unification, problematic.

It has also led to a growth of racism and xenophobia in a number of countries with so called `outsiders' being blamed for unemployment and poverty.

The pattern of economic development has also quite clearly led to a decrease in demand for some European businesses and this has been one of the push factors to many looking to expand their business outside the EU. Much of this has focused on Central and Eastern Europe and the Former Soviet Union and increasingly on the Mediterranean. However Asia has been a growing focus for many companies.

A second distraction is one of the good European. It is important to note that the majority of the 15 members have recently experienced or are still in the throes of major corruption scandals which involve significant abuses of power and position. Some have been confronted by a free and vigilant press and an independent judiciary others have been more than stubborn. They have highlighted the importance of a free press though disturbingly in Europe it is one increasingly controlled by fewer hands.

What you are not meant to see!

  1. You are not meant to notice, though as tourists from Asia you will be confronted by it on arrival, institutional racism. If you get through immigration controls you will inevitably feel, sense and experience more racism and xenophobia. You may be shocked to see that once inside Europe Filipino goods can travel freely but Filipinos and above all Filipinos are, under the Schengen Agreement, likely to be stopped and checked by the police.
  2. You are not meant to see the absolute and relative poverty of many areas, growth of the diseases of poverty and wholesale cuts of vital welfare and social services.
  3. You are not meant to see the lunacies of the pattern of subsidies and overproduction of food and the resulting costly storage or dumping which flow from the Agricultural Policy of the European Union. This is the largest item in the EU's budget and is chronically unsustainable. Ironically, there is a significant and parallel growth in `luxury' and out of season produce from Asia, Africa and Latin America to stock the supermarket shelves 365 days a year with oranges, apples and cut flowers.
  4. You are not meant to see but will instantly see the consumer dependence in imported consumer goods. My children recently asked me - Why do all the things we buy come from Japan, Taiwan and China?
  5. You know about, but should not see, some aspects of the post-cold war economies which are significantly dependent on the production and sale of arms. This has diversified but only into repression technology for use within states on their own citizens. The commitment to the promotion of peace, democracy and human rights is in sharp and cruel contrast to the continuing marketing of the tools of death and repression.
  6. Lastly you are not meant to see that the European Union is an excellent case study on the effects, costs and benefits of a free trade zone. Since 1st January 1993 and after forty years of legislation a single market has been created. Customs duties have been harmonised as has taxation. Capital markets and financial services have been liberalised and finally most, but not all, border controls, for goods, not people, with some exceptions such as the UK have been removed. In a world drunk on the supposed benefits of supporting free trade take a look at us, see who and what benefits and who does not.

Coming events

After this part of the tour, as we rest a little and before your surprise I would like to tell you of two main coming events so you don't miss them.

First is the Inter Governmental Conference. This is a process which will enable the EU, the 15 member states, the European Parliament and the European Commission to look at how the Maastricht Treaty which underpins the EU integration has been implemented so far and how adequate the existing European institutions are to do this. It will also consider whether there need to be any changes in the Treaty itself.

It is important because for many European politicians they have seen that the European project is in a time of crisis. They are concerned about unemployment, marginalisation, social exclusion, racism and xenophobia. They are concerned that many people feel alienated from or indifferent to greater European integration. However the future agenda is very clear. The European institutions are preparing themselves for the costly and fundamental process of enlargement, adding up to 12 more states to the 15. Already the GDP of the 15 is 10% more than the US and 66% more than Japan. It requires the institutional base for enlargement but has to bring its current citizens with it. Enlargement will consume enormous amounts of energy, time and resources. At present EU external relations are largely dominated by its relations with its neighbours. Central and Eastern Europe and the former Soviet Union take up significant budgetary resources and increasing attention is being given to Mediterranean countries. This has seen a shift away from the African, Caribbean and Pacific countries (ACP) brought together under the combined aid and trade agreement, the Lomé Convention, and also away from the relations with Latin America and Asia.

Asia, on nearly all indicators, despite the rhetoric surrounding ASEM, receives the European Union's lowest per capita budgetary attention of any region of the world. It is also very low with respect to it's peoples needs. This relative lack of attention is completely out of proportion to its population and economic power or even levels of poverty. Calculations of likely total EU expenditure over the next 5 years show that of an estimated 35 billion ecu ($44 billion) only a maximum of 3 billion ecu ($3.75 billion) will go to Asia less than the 4.5 billion ecu to Mediterranean, 8 billion ecu to Central and Eastern Europe and 3.5 billion to the former Soviet Union. Sub Saharan Africa will still receive the most with 13 billion ecu ($16 billion). A clear response to the increase in poverty in Asia especially South Asia is not the top priority objective. Looking after Europe's neighbours is.

The other main issue of the IGC is the attempt at Monetary Union. As mentioned earlier the social and economic crisis has increased expenditure on social welfare and decreased income from direct taxes. This has increased budget deficits and a key issue in the assessment of whether a country will be able to join a single currency. If, however, Monetary Union is even partially successful it will have a significant effect on financial markets. The relative power and influence of the yen and US dollar relative to a European currency is likely to fall.

Above all you should be aware that these two areas in the IGC will be all-absorbing and limit the chances for the adoption of a progressive agenda especially in external relations as proposed by One World Action and the other NGOs across Europe expressed in the Liaison Committee's adopted position.

The second future event, more rumoured than in place, but still an important background to ASEM is the prospect of the development of a series of comprehensive trading agreements between the EU and regions of Asia, Africa and Latin America. This has begun with Mercosur in Latin America and with South and Southern Africa. This can be seen as part of the process of promoting an open, multilateral trading system under the umbrella of the WTO.

The European Union accounts for 38% of world trade and for a higher proportion of international investment. Our concern is if this path is embarked upon then it should follow the practice of the Lomé Convention. This is based upon multi- annual agreements which incorporate aid and trade now cover issues of human rights and democracy. The recognition of workers' rights within such agreements is essential, though as with the other issues such as social clauses their implementation could be potentially complicated and problematic. We need to deepen the debate on social clauses, to explore mechanisms for their inclusion and use which are acceptable and agreed and ensure measures to prevent their abuse.

As concerned Asian tourists of the EU what are your key issues. Within the EU itself some issues stand out:

  • The unsustainable pattern of agricultural production and the effect it has on Asian producers;
  • The environmental effect of the current patters of industrial production and consumption;
  • The continuing addiction to the production and trade of arms, especially with Asia. This includes the shift to more 'mass produced' goods used to repress civilians;
  • The continuing marginalisation of women from the core of economic activity and political decision making.

In EU/Asia relations:

  • The concentration on trade with the economically most important ten countries at ASEM at the expense of a relationship with the rest, above all the South Asian (SARC) countries;
  • The ambiguity and prevarication on promoting human rights and democracy;
  • The preoccupation in what is now the 'Scramble for Asia' along with the US, Japan, Korea and Taiwan;
  • The continuing erosion of workers' rights in the past as part of Structural Adjustment Programmes and now in trade discussions;
  • A narrow old, cold war definition of military based security which avoids a broader economic, social and political definition of security;
  • The challenge of poverty reduction especially when day by day poverty increasingly has a woman's face.

Finally your surprise. It is the old privilege. To answer the question 'What can we do?'

I have a simple proposal.

We must develop and strengthen systems, organisations and mechanisms to provide countervailing power.

I am a realist, some say fatalist, ASEM will set in motion a process that will strengthen economic and trading relations between parts of Asia and Europe. Business. I feel that we must people that agenda, that process. We must send back the agreed rhetoric of peace, stability, sustainable economic and social development, of the promotion of human rights and democracy of the ensuring of the fulfilment of women's human rights, of protecting the environment. We must deepen it, decorate it, disseminate it.

We need to look at how a people's agenda can engage, influence and change that of the EU and the Asian 10. Under the umbrella of accountability we have to develop the mechanisms and means to systematically expose the gap between rhetoric and reality and to analyse and illustrate the consequences of the gap. We need to understand the decision making process in more detail, to time better our interventions and develop dialogue with decision makers!

We have much to learn from the UN Conference process and above all from possibly the most effective and coordinated but open and participatory movement that of the international women's movement. We need pointers on how to engage first on a regional basis and then how peoples and their organisations can cooperate across regions. This has been the key to the TNI project with the Philippines over the recent years. We all have to learn from this and develop it on a regional level.

Part of this requires a continuing analysis of power and decision making in Europe and Asia and developing our countervailing power accordingly. This may lead us to seeing the limits of a restricted concept of globalization and exploring the richness and variety of the process, responses and alternatives on a community, country and regional basis.

So the surprise is, its up to you, us, to develop countervailing power. Thank you for coming on the tour.