January 2001

A SOUTH-SOUTH MEETING TO FACE UP TO GLOBAL FORCES

Concrete ways to meet the challenges of globalisation were discussed at a ‘brainstorming’ seminar of the Group of 77 held in December 2000 in Malaysia. Whilst the battle to reshape globalisation is uphill, the need for the South to have a fair say in global policies is urgently felt. This could be clearly seen from the views of the many eminent participants at the meeting.

By Martin Khor

Third World Network Features

In December 2000, Kuala Lumpur was host to an interesting meeting of some leading Third World diplomats and thinkers who came together to ‘brainstorm’ on how their countries should respond to the onslaught of globalisation.

The seminar on ‘Globalisation and South-South Cooperation’ was organised by the Group of 77 (the largest association of developing countries, with more than 140 members) and the United Nations Development Programme, with the support of the Institute for Strategic and International Studies (ISIS) Malaysia.

The participants were a mix of practising diplomats (who represent their countries at the UN or the World Trade Organisation), regional organisations and researchers from the different regions of the South.

Though there were naturally many varied views, they seemed agreed on two major points: firstly, globalisation is harming the South but it is not an inevitable process and can thus be reshaped; and secondly, developing countries need to collaborate more in order to bring about the changes to suit their interests.

At the end of the seminar, the participants called on Malaysian Prime Minister Dr Mahathir Mohamad and exchanged views with him on the same issues.

Whilst the seminar and the meeting with Dr Mahathir ranged over many topics, the foreign participants seemed most fascinated at why and how Malaysia chose to go its own way without loans or policy conditions from the International Monetary Fund, and how this had seemed to work.

This contrasted with the negative experiences of other countries they knew or came from, where the economy remained in recession and in deep debt despite many years of following the IMF’s policies.

Among the participants were the G77 Chairman (Nigerian Ambassador in New York, Chief Arthur Mbanefo), the former G77 Chairman (Samuel Insanally, Guyanese Ambassador in New York), Ali Mchumo (Tanzanian Ambassador in Geneva, who was WTO General Council Chairman in 1999) and Algerian Ambassador in Washington Idriss Jazairy.

Also present were Dr Norman Girvan, Director of the Association of Caribbean States (a regional group similar to ASEAN), Dr Lu Aiguo from the Chinese Academy of Social Sciences and Prof. Ajit Singh, an economist from Cambridge University, ISIS Chairman Dr Nordin Sopiee, the director of UNIFEM (a UN agency dealing with women’s rights), UNCTAD Secretary Awnie Benham and UNDP’s Malaysian representative Philips Young.

All the participants shared the view that globalisation is driven by policies dominated by the North. They stressed the need to strengthen the G77’s and the South’s ability to negotiate more effectively in the UN, IMF and WTO.

G77 Chairman Arthur Mbanefo called for a ‘rekindling of the spirit of collective self-reliance’, tracing the history of South-South cooperation since the historic Afro-Asian Bandung conference of the 1950s to the South Summit in Havana last April.

Stressing the need to counter the hold of what he called ‘Western intellectual hegemony’ on people in the South, Prof. Ajit Singh gave data to show how the South had achieved high rates of economic growth from independence to 1980, but that there had been serious setbacks in the 1980s and 1990s due to debt and the IMF’s policies, both of which are part of the globalisation process.

At the end of the seminar, the participants debated and adopted a set of conclusions and recommendations, which they will bring back to New York for distribution to the missions of G77 countries and for circulation at the UN.

According to the draft statement, ‘Globalisation’ is a human construct and results from policies that reflect the dominance of the developed countries.

‘The South needs to challenge the intellectual hegemony of the North in global economic policy-making and to replace it with diagnoses and prescriptions that reflect the perspective and interests of the South.

‘Hence, the South needs to fashion a “globalisation paradigm” of its own; contrasting this with the market-driven, Northern-dominated globalisation that is now being imposed.’

Poverty is often the result of processes associated with globalisation and thus an alternative model of globalisation is needed, which puts human development as the centre of concern.

This alternative model could be termed ‘development globalisation’ and can be an alternative point of reference to the ‘Internet generation’ in the South, who are being led to believe that commitment to nation, community and society is a thing of the past.

The participants added that the years 2001 and 2002 are crucial for the South to reshape globalisation, as there will be critical international meetings, including the fourth WTO Ministerial Meeting (2001), the UN High-level Event on Financing for Development (2002) and the Rio Plus Ten Summit on Environment (2002).

‘The South should try to coordinate their positions effectively to meet the challenges of these meetings and their processes,’ the statement stressed.

Regarding the WTO, the priority is for developing countries to insist that their demands be met for ‘reviewing and reforming’ the WTO.

‘It is of utmost importance for developing countries not to accept the proposals for launching a new Round... Developing countries had stood firm before and at Seattle on this point, and they should be even more firm in the coming years on this principle.’

The persistence of the debt problem, the continuing adverse effects of IMF policies and devastation and shocks from the recent series of financial crises underscore the urgency for solutions to the unstable and unjust nature of the global financial system, said the statement.

‘Developing countries must use every opportunity to put forward proposals for a comprehensive reform to the international financial architecture,’ it added.

Negotiating proposals that the South should put forward include: comprehensive debt relief; a change of the damaging IMF structural adjustment policies; greater transparency and accountability of the operations and players in the global financial markets; international regulation of speculative and short-term capital flows and of highly-leveraged funds.

Other points include debt-standstill arrangements and orderly debt workouts with fair burden-sharing between creditors and debtors; a stable international system of exchange rates; and flexibility for developing countries to have selective capital controls (including for countries operating under IMF-World Bank loan conditionality).

The statement also urged countries of the South to strengthen their own institutions, including for policy formulation and for preparing for negotiations.

At the national level, inter-Ministerial councils should be formed to formulate national positions and policies. And at the international level, the G77 could organise exchanges of information and experiences among the regional groupings. The G77 can also encourage research institutions and NGOs of the South to provide inputs to developing countries to assist policy-makers and diplomats in policy-making and negotiations.

In a specific comment on Malaysian policies, the statement said that Malaysia’s national experience in coordinating information and analyses on globalisation issues among key policy-makers and non-governmental groups could be useful to other developing countries.

It also noted that the seminar discussed Malaysia’s experience with non-orthodox methods of dealing with the financial crisis (including expansionary counter-recession macro-economic policies, fixing the exchange rate and selective capital controls) and found that this experience held very interesting and useful lessons for other developing countries.

Whilst the seminar had high-quality discussions and certainly lived up to its objective of ‘brainstorming’ on current problems confronting the South, it remains to be seen if there will be follow-up to turn the proposals into action.

The South needs to get its act together, and fast, if it is not to be overrun by the forces of globalisation that were well identified at the seminar. - Third World Network Features

About the writer: Martin Khor is Director of the Third World Network.

2136/2001