The forces and processes of globalization -- increased trade liberalization, improved environmental standards and "universal" human rights -- have disillusioned a majority of the world's population. Thanks to the Seattle fiasco and street demonstrations in Prague, it is clear that no matter how hard developed countries and multilateral institutions push their agendas, globalization cannot proceed without giving serious consideration to deep-rooted public frustration around the world -- especially in developing countries.
The organizers of the fourth World Trade Organization Ministerial Conference, which will take place this November, would be advised to note that the same technological progress that has reduced barriers to international integration has also created information superhighways that have made people even in the remotest regions more aware of global inequalities. Gone are the days when jargon-spewing officials could pass sweeping decisions behind closed doors without making the implications of such decisions transparent and taking responsibility for them.
The time has come to acknowledge that market transactions and liberal trade-regimes based on unequal market power or uneven levels of social, economic, political and technological development worsen the very fabric of globalization that the developed world so doggedly espouses.
While there is no doubt that the economic principles of globalization -- free trade, free markets and international investments -- have brought increases in global standards of living, they have not produced universal prosperity.
One-fifth of humanity live on less than $1 per day. Another fifth lives on less than $2. The least developed countries are marginalized in the world economy. The 49 LDCs are home to one-tenth of the world's population, but command 0.5 percent of world GNP. During 1990-98, per capita GDP growth in the LDCs was 0.4 percent, while the rate was 5.4 percent for the low- and middle-income countries and 3.6 percent for developing countries.
One of the saddest aspects of globalization is that while liberalization of trade and services -- in which the developed world enjoys comparative advantage -- proceeded at full thrust, little progress was made to promote the international flow of labor or liberalization of agriculture or textiles and clothing, areas in which the developing countries enjoy distinct comparative advantage. On top of that, exporters in developing countries face declining terms of trade for their primary commodities.
Mainstream economic theories that underpin globalization postulate that the physical movement of labor away from developing countries will not be necessary because foreign investment from the developed world, in search of cheap labor and lower production cost, will flow into developing countries. But the record shows otherwise.
Despite an increase in foreign direct investment from 4 percent to 12 percent of world GDP between 1980 and 1987, very little has gone to poor countries. According to the World Bank, in 1997, 70 percent of FDI went from one rich country to another, 20 percent went to eight developing countries and the remainder went to more than 100 poor nations.
The developing countries' prospects for development have been thwarted by colonial rule, protectionist trade regimes and manipulations of foreign aid, technology transfer and foreign investment.
Therefore globalization will continue to infuriate people in developing countries as long as the developed countries, along with the multinational institutions that work largely in their behest, dominate major decision-making processes and the poor nations are relegated to the sidelines in negotiations.
How can LDCs effectively advance their interests when most of them lack the financial and human resources to participate in trade negotiations? As long as this mockery remains, the developed countries, along with some multinational institutions, will continue to set negotiation agendas and control their outcomes, which, by design and default, are bound to be unjust and inequitable for developing countries.
The developed world, while pushing for integrating new areas into the WTO system, conveniently forgot its commitments to implement some of the decisions that benefited the LDCs.
The solution to this predicament is neither simple nor easy. A plausible place to start addressing the problem would be the multilateral institutions like the World Bank, the International Monetary Fund, the WTO and the United Nations, which play powerful roles in shaping the behavior of developing nations.
Everybody knows how the Bretton Woods institutions work, whose interests they serve and why most of the top positions of these institutions are never left to open competition. It is encouraging that in recent years interest has grown in reforming these institutions but it would be preposterous to assume that the developed world would easily loosen its grip on these institutions -- after all, they provide a handy network to set and enforce rules for the rest of the world.
The U.N. system, which traditionally been more vocal in defending the interests of the developing world, is also dominated by a mammoth bureaucratic leviathan, drawn on the basis of an extremely complex mosaic of country-quotas, nominations and representations, leaving merit to play a minimal role in its hiring practices.
Although the General Assembly provides members with an equal voice, the U.N.'s supreme powers remain in the hands of the permanent members of the Security Council. Although U.N. membership has increased from 51 countries to 185 and the world has changed dramatically since its establishment, permanent membership in the UNSC still remains limited to the five victors of World War II.
Perhaps the time has come to induct new permanent members into the Security Council, for the sake of the legitimacy, effectiveness, transparency and accountability of the U.N. system.
Reports suggest that there are at least two Asian contenders for an enlarged UNSC -- India and Japan. Japan's candidacy makes sense: It has become an economic superpower, distributed income domestically in an egalitarian manner, upheld the Peace Constitution and is the largest development partner to many developing countries.
India's campaign for a permanent seat at the UNSC makes no sense, however. New Delhi is widely believed to be behind the separatist forces in Sri Lanka, it openly controls the foreign policy of Nepal and it has turned Bhutan into a satellite state. Its "beggar thy neighbor" policy has resulted in the disintegration of its archrival Pakistan and its Farakka barrage river-management project has created one of the largest environmental and human disasters in history.
How can such a nation, which hardly misses an opportunity to destabilize its neighbors, be trusted with a permanent seat in the UNSC?
Yes, the UNSC needs to revamped. But there should be transparent procedures for doing that. Backdoor measures will only provoke further anger.
One option would be to divide the world into regions, such as South Asia, East Asia, Central America, North America, and so on, and electing one representative from each region for a set term. This would allow smaller nations an opportunity to be elected to the UNSC. After all, haven't we seen enough of how big and powerful nations manipulate events and decisions in multilateral bodies?
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