“Robin Hood used to rob from the rich to give to the poor.
The global market economy is causing the exact reverse”
[Address by The Most Hon. P.J. Patterson, Prime Minister of Jamaica
“CARICOM Beyond Thirty: Connecting with the Diaspora”.
at CARICOM 30th Anniversary Lecture, New York, 2 October 2003]
First I would like to thank the organizers – the Government of The Bahamas and CARIB News – particularly Prime Minister the Hon Perry Christie and Dr Karl Rodney, publisher and CEO of Carib News, for having invited me to this the Eighth Annual Caribbean Multi-National Business Conference. Somewhat strangely, I also want to thank someone who is not an organizer of this Conference but whose continuous exhortations within the councils of the Caribbean Community that as many of us as possible attend this conference has helped to encourage me to attend. I refer to none other than the Hon Billie Miller Foreign Minister and Minister of Foreign Trade of Barbados. I am also grateful for the opportunity to address such a distinguished audience but even more so to be among you to hear your thoughts, your ideas and your perspectives as they relate to the development of the Caribbean.
As regards the few comments that I will be making, I can assure you that I will do my best to ensure that my words, particularly in quantity do not interfere with your ability to digest the sumptuous fare before you. However given the topic of my remarks – “ Globalisation To Serve The Interest of the Majority of The World”- within your overall conference theme Globalisation and Its Many Realities its relevance and importance to the Caribbean Community and other Small Island Developing States, I cannot equally assure that I will be able to avoid dispensing one or two unpalatable truths.
The phenomenon of globalisation with its companion liberalisation is the dominant feature in the lives of people throughout the world today. This multi-dimensional process impacts on domestic, regional and global policies in the economic, technological, political and social realms as it entrenches the multi-nationalisation process. If globalisation is to serve the interest of the majority of the world, then the process must foster and promote sustainable human development. To that end the policy initiatives which countries would be required to make and the process of international cooperation must be channeled towards eradicating poverty rather than merely (further) enriching a minority.
In other words for globalisation to achieve this objective it must deal with the situation of today’s world in which 23 per cent of the world’s population earn less than US$1 a day, the income of the richest 25 million Americans is almost equivalent to that of 2 billion of the world’s poorest people and the richest one percent of the world’s population receives as much income as 57 percent of the poorest. This is a world in which the GDP of the developed countries is now 20 times that of the developing countries moving from a position at the beginning of the nineteenth century when it was merely three to one.
The impact is felt as much by the people in the villages of Eleuthera and Eritrea as by those in the boardrooms of Manhattan and Mayfair. The problem is the vast difference in that impact – impoverishing one and enriching the other. This process of globalisation has been accompanied by a marked increase in inequalities not only between nations but within nations as well. The problem is however more intractable between nations than within, as national policies can serve to assuage the latter. Only international co-operation can hope to impact on the former.
The main underlying feature of globalisation is technology. In today’s world the gap between those who are at the cutting edge and the others is disconcerting enough. This situation is likely to worsen, leading to the latter being left even further behind in a world driven by technology and its role in the process of development and in the creation of wealth.
The irony of the situation is compounded by the realization that a significant percentage of the techno wizards who are driving this continuous revolutionary process come from the very countries that are being left behind. That is only one example of a situation where the recruitment of professionals from small states denude them of much needed skills for their own development to the benefit and strengthening of the more developed states.
This situation continues to deteriorate apace as shown by the UN Annual Human Development Report 2002. The report showed that while the US economy was prospering in the 90s, 54 countries saw average income decline. Twenty-one countries’ human development indices, which measure income, life expectancy and literacy, fell compared with only four in the 1980’s. No wonder it is referred to as the “Lost Decade”!
The impact of the process is particularly severe on the developing world of sub-Sahara Africa where in some countries life expectancy is a mere 35 years as against one of near eighties in the developed world and where in every thousand children, 363 do not reach their fifth birthday as against only four in Norway for example. Even the recent Millennium Development Goals which set 2015 for halving the number of people in poverty, is by current trends a bad joke in that region, where it will take up to 2147! On top of all that, of today’s 25 per cent of the world’s population that face the lethal combination of famine, HIV/AIDS, conflict and failed economic policies, the developing world take by far the lion’s share. Obviously, not all the ills can be laid at the door of globalisation nor is the developing world the only afflicted area.
One of the least acknowledged dimensions of the effects of globalisation, is its impact on the process of climate change and the resulting intensity of natural disasters including hurricanes. Some in the developed world refuse to recognize or accept despite all the scientific evidence that their actions are significantly responsible for the problems associated with climate change. An UNECLAC study issued in 2000 estimated the damage to economies of St Kitts and Nevis and Anguilla by these more intense hurricanes in 1995 was equivalent to 105.2 percent and 147 per cent of GDP respectively.
The natural consequence of such a disaster is the diversion, to reconstruction, of scarce and depleting resources intended to advance economic and social development. A startling example of this can be found in another part of the world where they are also combating the effects of climate change. The Maldives was forced to divert a Japanese loan intended for information technology development and education to build sea defences, which cost an estimated US $4,000 per metre!
These figures portray a sobering picture of the economic, environmental and social vulnerability, to which globalisation contributes significantly and in turn hinders their capacity to participate meaningfully therein to their advantage.
To combat these negatives of globalisation, one must focus on leveling the playing field. To do so however, one must be aware of what that venerable Latin American economist, Raul Prebisch had to say that the “free play of market forces between unequal trading partners would only punish poorer commodity exporters at the same time as it brought advantages to the rich industrial core.” In so stating Prebisch was really repeating the Aristotlian principle that equality of treatment among unequals is inequitable. But as we all know the market is not about equity.
It must be emphasized that globalisation is not an automatic process in the sense that its processes and outcomes are uncontrollable. The decisions that direct the institutions of globalisation are made by men and women who answer to and run the governments and corporations of this world. Therefore if those with the major influences on these processes could be persuaded of the need to humanise the process then globalisation could conceivably be made to work for all of us.
For us in the Caribbean globalisation is not a new process. We have been closely linked in a dependency relationship with Europe and to a lesser extent North America for nearly 500 years as part of the global trading system. For us therefore membership of the global trading arrangement is not a question of if but one of how – the terms and conditions. I noted the distinguished Prime Minister stated this morning that The Bahamas, the only member of the Caribbean Community not yet formally a member of the WTO would be seeking to achieve that status soon, as indeed it would be participating – as all our other members – as part of the FTAA and the other aspects of the Summit of the Americas process.
If we were to take an example of impact of globalisation on our Caribbean agriculture situation, commodity crops such as sugar, bananas, and rice dominate our production. These found their beginnings as part of a colonial arrangement. Fast forward to today’s globalisation processes and the trade preferences which were a key factor in the production and trading of these commodities are being dismantled, severely limiting their export profitability and the countries’ earnings – hence the Dominica situation. Compounding this type of situation is the World Trade Organisation’s insistence on the lowering tariffs by countries such as ours while the developed countries refuse to remove the subsidies to their agricultural production – estimated at some US $360 billion a year – which effectively reduce our market options. Therefore, on the one hand our earning capacity is being throttled and on the other our revenue is being squeezed by the same rules. Any wonder that there are so many skeptics among us about the process of globalisation! Any surprise there was Cancun?
The harsh reality – an unpalatable truth – is that issues of concern to developing countries have obviously not been adequately addressed in this globalisation process and the current impasse illustrates the dissatisfaction of developing countries and their willingness to form alliances to ensure that their interests are promoted and protected and at the very least not worsened. In order for developing countries to truly benefit within the process of globalisation, those who run the governments and corporations in the developed world must have a c-change in their perspectives – nothing less. It is only in this way that efforts such as those to restart the process of trade negotiations at the level of the WTO could be successful.
In that process there is need to institutionalise special and differential treatment of developing countries including the maintenance of the notion of less than full reciprocity in negotiations. This would signify genuine consideration of the constraints faced by developing countries in assuming additional commitments. Examples abound including from our own CARICOM experience of asymetrical reciprocity in trade agreements between partners at different stages of development.
For example, as we in CARICOM move to create a Single Market and Economy, our flagship activity to respond to the challenges of globalisation and our development needs, our Revised Treaty takes full account of the differences in the stages of development of our 15 Member States. In providing for the free movement not only of goods but also of services, skilled labour, capital and the right of establishment across the entire Single Market, we seek to enhance the Community’s attractiveness for investment, increase productivity and production and generate greater income and employment in all Member States. This would be an excellent opportunity for the Caribbean diaspora and others who have an interest in promoting the development of the Region.
A particular area which we need to emphasise and rigorously pursue is the upgrading of the training of our human resources both to meet our own needs as well as to deal with the inevitable out-migration.
Ladies and gentlemen, to be fair there is broad recognition that something needs to be done to address the global imbalance. There is even widespread understanding of what that “something” that needs to be done is and some fledgling efforts have been made. The Doha Development Agenda, the UN Millennium Development Goals, the UN Conference for Financing and Development in Monterrey, Mexico and the World Summit for Sustainable Development in South Africa have all set out important guidelines to make the process of global development more equitable.
However, sadly, the rhetoric and promises freely given have not been matched by action. At a glance the: Doha Development Agenda is that in name only, the Millennium Development Goals as shown earlier as regards halving of poverty, seem set to easily miss its targets set for 2015; the lofty promises and commitments of the UN Monterrey Conference for Financing and Development remain to be fulfilled; and although it may be too soon to judge the South Africa Summit, it might not be wise to hold the proverbial breath, as the record does not offer much hope.
Indeed at a recent round table at the UN that reviewed the Monterrey Consensus many speakers observed that today many developing countries were in fact poorer than they were in 2000 when the goals were set.
Some of the key themes which emerged from this discussion were:
– The net outflow of resources from developing countries rose from US$111 billion between 1998-2000 to 193 billion in 2002;
– ODA flows still too low to meet the development needs
– External debt situation is still critical with little assistance for middle-income indebted countries.
– No progress towards the new international financial architecture
– Little progress towards increasing the participation of developing countries in the decision-making processes at international financial and trade organizations.
The principal problem identified by many, seemed to be a lack of political will mainly by the developed countries. For instance the United States made a commitment at Monterrey in 2002, to set up a Millennium Challenge account in which it was agreed to increase ODA by 50 per cent over three years to total five billion dollars. These funds were earmarked to help developing countries in the areas of good governance, health and education, sound economic policies and support for the private sector. To date no fund.
One of the important initiatives for which one must thank the US is its contribution to the fight against the HIV/AIDS crisis in the Caribbean as in Africa. It is an example of what can be done with enough political will.
Ladies and gentlemen, in order for us to make the process of globalization work for the majority of the people there has to be commitment by all, not some, to summon the political will to make the rhetoric a reality. Otherwise Cancun could well be the beginning of a process with a most uncertain end for us all – not merely for some.
