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Defining Globalization Backlash Grows Against Globalisation
By Martin Khor
International Communication Project
December 1996Recent speeches by leaders of the South and by UN agencies are leading to a new consensus that globalisation results in great wealth of a few, impoverishment and marginalisation of many, and polarisation between rich and poor, North and South. This is symbolised by the fact that the world's 358 billionaires have assets worth more than the annual incomes of countries with almost half the world's population. In late July 1996, the Malaysian Prime Minister Dr Mahathir Mohamed made a speech in Kuala Lumpur attacking "globalisation", thus adding considerable weight to the growing international backlash against this seemingly uncontrollable process. Dr Mahathir said the developed countries interpret globalisation as the breakdown of boundaries as barriers to economic exploitation. As a result, every country rich or poor would have access to every other country, and all would benefit.
In reality, however, globalisation would leave the developing countries "totally exposed and unable to protect themselves". The effect of economic globalisation, said the Prime Minister, would be the demise of small companies in developing countries. It would also mean the loss of the nominal independence they have. "Just as the ending of the Cold War has brought death and destruction to many people, globalisation may do exactly the same and maybe more." A drastic and pessimistic conclusion, no doubt. But as Dr Mahathir added, it is unfortunately "entirely possible". He however ended on a positive note by calling on the weak and poor to appreciate this possibility and to fight "tooth and nail" against it. The war, he said, can only begin if there is understanding of what globalisation can mean.
The Malaysian premier's speech is the most recent and articulate addition to the increasing number of criticisms made against globalisation by leaders and citizens in the South. At the ninth session of the United Nations Conference on Trade and Development (UNCTAD) in Midrand, South Africa in May, several leaders from developing countries decried how globalisation and liberalisation had run their local companies out of business and marginalised their economies. They described how trade liberalisation or the opening up of their economies to foreign goods and companies (following policies imposed on them by donors and creditor institutions like the World Bank and International Monetary Fund) has led to often devastating problems. Tanzania's President Benjamin Mkapa told the Conference that countries undergoing liberalisation and privatisation under World Bank-IMF policies had suffered large social costs, including job losses, cuts in health care and education, and the "immense possibility of instability". "Opening up of our national economies is also a problem," he added. "The prospects of integrating our countries to the global economy are extremely dim". "Meanwhile, such industries as we have will be affected by imported products that run our companies out of business. It is leading to the deindustrialisation of our countries."
At the same meeting, Trade Ministers from the poorest nations, the Least Developed Countries (LDCs), also issued a declaration stating that "the LDCs confront the processes of globalisation and liberalisation from a position of disadvantage." "In the short run [these processes] would do little to address LDCs' trend towards marginalisation. On the contrary it is feared that these forces may well accentuate it..." "The implementation of the Uruguay Round Agreements would involve significant transitional costs on the LDCs. Erosion of trade preferences, higher bill for import of food, pharmaceuticals and essential capital goods will create serious difficulties for these countries."
Interestingly enough, there are also loud protests against the insecurities of globalisation coming from people and groups in the North. The Northern social and labour organisations attacked the increasing incidence of poverty, unemployment, job insecurity, social inequalities and ecological degradation in their societies. They attributed these social ills to the increasing abandonment of social and welfare responsibilities of their governments, and the transfer of decision-making authority to market forces.
The Human Development Report 1996, launched recently by the United Nations Development Programme, contains data that add empirical weight to the thesis that globalisation benefits only a few, makes a lot of people worse off, and generates tremendous inequities. It also contradicts the conventional wisdom that economic growth has been benefiting most of the world's people. The report shows that over the past three decades, only 15 countries have enjoyed high growth whilst 89 countries are worse off economically than they were 10 or more years ago. In 70 developing countries, today's income levels are less than in the 1960s and 1970s. And in 19 of them (including Ghana, Venezuela, Haiti, Nicaragua, Sudan), per capita income is less than in 1960 or before.
"Economic gains have benefited greatly a few countries, at the expense of many," says the UNDP. The old cliche, that the poor get poorer and the rich richer, is unfortunately well backed up with fact after fact. In the past three decades, 1.6 billion people were left behind or became more poor. "And the very rich are getting richer," the UNDP report says. To illustrate, it estimates that the assets of the world's 358 billionaires exceed the combined annual incomes of countries accounting for 2.3 billion people, or nearly half (45%) of the world's people. UNDP chief, Gus Speth, concludes that the world has become more economically polarised, and "if present trends continue, disparities between industrial and developing nations will move from inequitable to inhuman." A commentary on these statistics in the London-based daily, The Guardian, was even more frank and scathing. Noting in bold headlines that "358 people own as much wealth as half the world's population", the paper's journalist Victor Keegan called it "highway robbery by the super-rich".
Using data from Forbes magazine's annual survey of the world's richest people, Keegan shows that Microsoft owner Bill Gates tops the list with personal wealth of US$ 18 billion, "enough to purchase half a dozen poor countries". Others on the list are US businessman Warren Buffet (US$15 billion), Roche company owner Paul Sacher, Asian businessmen Lee Shau Kee, Tsai Wan Lin and Li Ka Shing, and Microsoft co-owner Paul Allen. The Human Development Report reveals that the world's total economic income (global GDP) is US$23 trillion, of which only $5 trillion (or 22%) goes to developing countries, although they house almost 80% of the world's population. And the North-South gap is worsening. Between 1960 and 1991, the richest 20% of the world's people increased their share of total global income from 70 to 85%. The poorest 20% had their share fall from 2.3% to a miniscule 1.4%. In 1991, more than 85% of the world's population received only 15% of global income.
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