The Hindu Business Line : In quest of fair globalisation

It is not that globalisation is not working out because of some problem with the concept. What is at fault is its `governance' which manifests mainly at the international level as opposed to the national sphere. The World Commission on the Social Dimension of Globalisation seeks to usher in a regime of fair and inclusive globalisation, says Ranabir Ray Choudhury.

THE World Commission on the Social Dimension of Globalisation — set up by the ILO — has just brought out its report entitled A Fair Globalisation - Creating Opportunities For All, which, in a nutshell, not only performs its task of analysis and recommendation effectively but also, in the process, throws new light on the complexities involved in ushering in a regime of fair and inclusive globalisation. The inference of course is that the version of globalisation now being implemented is not what is required by the world, something which is becoming increasingly clear from the worldwide protests against it — mainly in poor countries but also in the rich albeit on the ground that it violates the basic tenets of protection of the environment (through enhancement of uncontrolled trade).

First, what has the Commission basically set out to do? The first lines of the report refers to the September 23, 2003, speech of the UN Secretrary-General, Mr Kofi Annan, where he warned that the world had "come to a fork in the road". As the two co-chairmen of the Commission say, their body was formed to address some of the challenges facing the planet as it stands at that fork. They added: "As human beings, it is in our power to take a correct turn, which would make the world safer, fair, ethical, inclusive and prosperous for the majority, not just for a few, within countries and between countries."

The Commission makes the basic assumption that the ongoing process of globalisation cannot be avoided. In other words, individual nations do not have the luxury of a choice to avoid globalisation and strike out on a development path exclusively their own. Indeed, they cannot do so if they are to utilise the fruits of technological development that is taking place all around them — and only the application of appropriate technological progress (no matter where it originates) to national production mechanisms in every conceivable sphere can produce economic progress, which, in turn, if spread equitably among the people, is perhaps the only way within a democratic framework which can result in the uplifting of the downtrodden in society.

So what the Commission sets out to do is to `rethink' globalisation. In the words of the co-Chairmen, "many recognise the opportunities for a better life that globalisation presents. We believe their hopes are realisable, but only if globalisation is subjected to better governance at all levels". Specifically, the Commission would prefer the focus of globalisation to shift from "a narrow preoccupation with markets to a broader preoccupation with people". The co-Chairmen add: "The social dimension of globalisation is about jobs, health and education — but it goes far beyond these. It is the dimension of globalisation that people experience in their daily life and work: The totality of their aspirations for democratic participation and material prosperity."

As we all know in this country, the concept of globalisation is anathema to a whole lot of people who feel, not always without good reason, that globalisation is only another name for economic exploitation, the victims being, principally, the Indian working population, not to speak of farmers in the rural areas. The Commission's vision, on the other hand, seeks to introduce a revised form of globalisation, the objectives of which, curiously, cannot but converge with what every Indian citizen would like to see introduced in his or her daily life.

First, the report says that fair globalisation would mean meeting the demands of all people vis-à-vis respect for their rights, cultural identity and autonomy, decent work conditions, and empowerment of the local communities where they live. Second, the State (meaning the government of the day) will have to have the capability of managing relatively painless integration into the global economy, providing social and economic opportunity and security. Third, the new globalisation must lead to sustainable development, meaning that the process must be based on "the interdependent and mutually reinforcing pillars of economic development, social development and environmental protection at the local, national, regional and global levels". Fourth, the rules of the global economy "must offer equitable opportunity and access for all countries" and, more importantly, "recognise the diversity in national capacities and developmental needs".

There is no doubt about the good which globalisation can do to the international economy and, through it, to living standards in both the poor and rich countries. But the report hastens to say that, as of now, that potential has not been reached. To quote: "The current process of globalisation is generating unbalanced outcomes, both between and within countries. Wealth is being created, but too many countries and people are not sharing in its benefits. They also have little or no voice in shaping the process."

Obviously, this situation cannot be allowed to persist, if for no other reason than that it could lead to a sharpening of the already existing divisions among nations, forcing the world to take the wrong turn at the `fork' we are at. The Commission feels that change is required, but one which will have to be implemented "in a series of coordinated changes across a broad front, ranging from reform of parts of the global economic system to strengthening governance at the local level".

Indeed, in the eyes of the Commission, it is not globalisation per se that is not working out because of some problem with the concept. On the contrary, there is nothing wrong with the idea as such; what is at fault is the `governance' of globalisation which, at the moment, is manifested mainly at the international level as opposed to the national sphere. The report says unequivocally that there is concern about the "unfairness of key global rules on trade and finance and their asymmetric effects on rich and poor countries". It adds that the rules and policies guiding the multilateral system are the outcome of "a system of global governance largely shaped by powerful countries and powerful players. There is a serious democratic deficit at the heart of the system. Most developing countries still have very limited influence in global negotiations on rules and in determining the policies of key financial and economic institutions".

In the revised scheme of things, the Commission feels that globalisation should begin at home. As it says: "Global governance is not a lofty, disembodied sphere. It is merely the apex of a web of governance that stretches from the local level upwards". Consequently, the "behaviour of nation states as global actors is the essential determinant of the quality of global governance". What this means, therefore, is that if the governance of globalisation is critical to its overall success, and if what the nation states do domestically determines the quality of that governance, then the focus of action should primarily be on national domestic policy and implementation if the planet is make a success of the phase of globalisation it is currently in.

The Commission has listed the "broad goals and principles" which could serve as a guideline for national Governments, a list which is impressive no doubt but which also holds the germs of failure for the entire project. Among other things, stress has been laid on good political governance based on a democratic political system, respect for human rights, the rule of law and social equity. An effective State that ensures high and stable economic growth and raises the capabilities of the people through better access to education and health facilities has also been aimed at. Also considered necessary is a vibrant civil society empowered by freedom of association and expression, as also strong representative organisations of workers and employers which would facilitate a fruitful social dialogue.

On the international plane, a number of suggestions have been made such as allowing more space for "policy autonomy for developing countries" vis-à-vis global rules and policies on trade and finance, "equitable sharing among countries of the responsibility for maintaining high levels of effective demand in the global economy", and a reduction in "unfair barriers to market access for goods in which developing countries have comparative advantage, especially textiles and garments and agricultural products".

Clearly, this is not a list which will elicit unstinted support from developed countries which have been fighting tooth and nail to get every concession possible from the poor world to enable the Doha Round of multilateral trade negotiations to make headway.

This no doubt is a stiff hurdle to overcome, but possibly an even more daunting task would be to get the "national governance" part of the proposed new globalisation scenario ticking because of the attitudinal changes involved. Even so, the Commission's report will have done its job if it can get a debate started on the pros and cons of its proposals — for that is the only way in which the journey towards fair and inclusive globalisation can begin.