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Global Policy Forum - Human Rights Perspectives on Financing for Development Human Rights Perspectives on
Financing for DevelopmentBy Dr. Clarence J. Dias
President, International Center for Law in DevelopmentApril 1, 1999Panel presentation in support of the Work of the Ad Hoc Open-ended Working Group on Financing for Development. This second meeting was conveinged to address the final four of eight elements identified in the "index report" prepared by the Secretariat (A/53/470): 5) Trade and financing for development; 6) Innovative sources of financing; 7) Governance of the international monetary, financial, and trade systems; 8) Interrelationship between major elements and other special topics.
Mr. Chairman, permit me to begin by expressing my appreciation for being given the opportunity to address this panel and share with you some human rights perspectives on financing for development, especially as viewed in the counties of the developing world. In doing so, let me stress, at the outset, my view and understanding of human rights. Human rights are indeed legal rights--but they are much more as well. Human rights inhere in the very nature of the human person and they define and enshrine one's humanity. Human rights exist to secure freedom from fear and freedom from want. They exist to safeguard human dignity and identity--both individual and collective. Human rights seek to prevent and redress inhuman wrongs. Indeed, human rights seek to guarantee that most precious of all human rights--the right to be human, of which the right to be woman is an essential and integral component.
As we enter the second quarter of the final year of this century, one is tempted to invoke the description of Charles Dickens, of these being the best of times, as well as the worst of times:
The UN, in the process of much-needed reform, is a leaner but much more effective organization under the dynamic leadership of a Secretary-General providing both clear vision and firm resolve. But, on the other hand, the UN remains teetering on the financial brink and is having its credibility eroded by the unilateral actions of its more powerful Member States.
A global revolution, in communications and information technologies, is providing unparalleled opportunities for global civil society to make invaluable contributions to international negotiations on land mines, on the multilateral agreement on investments and on the international criminal court. However, the internet has also become a vehicle for organized crime, global pornography and the global trafficking in women, children and human organs.
There has been a veritable NGO explosion and the flowering of civil society, worldwide. Yet, we are also witnessing the perpetration of gross human rights abuses and violations by some civil society actors, resulting in genocide, racism, discrimination and hate crimes. Patriarchy and violence against women compel us to face the fact that the State is not the sole source of human rights violations.
Over the past decade, through a series of UN global conferences, all Member States of the UN have reached a global consensus on development. At several of the UN World Conferences from Vienna to Beijing, by consensus and without need for a vote, it has been reaffirmed that the right to development is a "universal and inalienable right and an integral part of fundamental human rights". Moreover, at its 1998 meeting, the UN Human Rights Commission adopted a consensus resolution on the right to development. However, the consensus seems to be unravelling and at its last session, the General Assembly was unable to obtain consensus around its resolution on the right to development. It is important, as we address 21st century realities, that we shed the 20th century ideological baggage that constitutes the legacy of the Cold War and the North/South, East/West divides that have hampered international cooperation and global governance. Now, more than ever before, it is vital that the principles of the Charter of the United Nations be upheld and applied--not as conditionality but with impartiality, non-selectivity and without double standards. And this is true of all UN Charter principles--relating to peace, development and human rights. Let us review some of the 21st Century realities confronting us today:
Poverty. It is true that remarkable and unprecedented progress has been made and in the past 50 years, poverty has been reduced to a greater extent than in the previous 500 years! But the advances have been uneven, marred by setbacks and poverty remains pervasive. More than one-fourth of the peoples of the developing world still live in poverty and about a third of them (some 1.3 billion people) live on incomes of less that $1.00 a day. A recent ILO report estimates that by the end of this year, 1999, two-thirds of the population of Indonesia will be living below the poverty line. New global pressures and crises are creating or threatening further increases in poverty.
The gap between rich countries and poor countries is widening. In 1948 the income ratio between these countries was ten to one. By 1960 it had climbed to thirty to one and by 1989 it soared to sixty to one and this, despite the fact that some 17% of the population of industrialized countries are presently below the poverty line.
The gap within countries has also grown. In 1997 the share of the poorest 20% of the world's people in global income is 1.1%--down from 2.3% in 1960. The ratio of income of the top 20% of the population to that of the poorest 20% has risen from thirty to one in 1960, to sixty to one in 1991 and to seventy-eight to one in 1994. This income gap is of special relevance since, hardly surprisingly, the country with the lowest income gap (Sweden)has the highest life expectancy rate in the world and the country with the second lowest income gap (Japan) has the second highest life expectancy rate in the world.
Unemployment has risen not only in the developing world, but in the developed world as well; unemployment has risen to levels unseen since the 1930s and income inequality to levels not experienced since the last century.
The Asian, Russian and Brazilian economic crises are creating shock ripples worldwide.
Armed conflicts, in many parts of the world, hamper development and drain scarce resources for humanitarian relief and reconstruction. Permit me to focus on two key trends: 1. Economic Globalization has taken place very rapidly and may well be irreversible. But as a result, as the UNDP Human Development Report indicates, the least developed countries, with 10% of the world's population, have a share of only 0.3% of world trade--half the share they had two decades ago. For 44 developing countries, with more than one billion people, the ratio of global trade to GDP has been consistently falling. The terms of trade for the least developed countries have declined a cumulative 50% over the past 25 hears. More than one-half of all developing countries have been bypassed by foreign direct investment, two-thirds of which has gone to just eight developing countries. The least developed countries lose $6 billion a year in trade imbalance, of which $1.2 billion is in sub-Saharan Africa alone. Globalization offers opportunities for poverty alleviation but only if it is managed carefully and with greater concern for global equity.
Moreover, as a result of economic globalization achieved through privatization, we are witnessing the abdication by governments of their responsibility to provide and ensure basic services such as clean water and health. Privatization is creating problems of access, price and quality. Moreover, economic globalization is being achieved through deregulation and this has led to a serious global erosion of the rule of law. Decision-making authority is being transferred outside governments to corporate board rooms and international organizations of trade and finance and is being exercised in a manner that is not transparent, participatory or accountable.
2. The Developmental Paradigm Shift. We are increasingly hearing about a much touted paradigm shift from development through aid, to development through trade and investment. In my view, development through trade and investment is an oxymoron-fit to rank, as recent events in Kosova bear out, with military intelligence. The paradigm shift may be many things. But it is clearly not development. Under such paradigm shift, development will be consumption driven rather than being directed by the needs and priorities of the country. By definition, it will not be sustainable since growth can only be sustained in this paradigm by ever-escalating levels of production and consumption. Unless we end the race to consume, we may well end the human race. Moreover, such a paradigm of development is destructive of human and humane values celebrating instead the values of selfishness and greed.
It is vital, therefore, that we hold firm to the definition of development around which consensus has been forged within the United Nations. The UN General Assembly Declaration on the Right to Development (adopted in 1986 and repeatedly reaffirmed since, by consensus, at the UN global conferences on development) establishes the right to development as "an inalienable human right" of "every human person" and "all peoples". It defines development as "a comprehensive economic, social, cultural and political process which aims at the constant improvement of the well-being of the entire population and of all individuals". "The human person is the central subject of development and should be the active participant and beneficiary of the right to development". It is important to reiterate again and again, in this working group on "financing for development", that new fangled paradigm shifts aside, it is precisely the above concept of development that we are seeking to ensure financing for. It is also imperative that we clarify what we mean by "financing for development". Today, ODA (official development assistance) levels are at their lowest ever in history, making targets of 0.7% of GDP appear to be an impossible dream. Given this dramatic decline in ODA, it is crucial to recognize the limitations of foreign direct investment as a means of funding development. It is also crucial to recognize that the billion dollar bail-out packages from the IMF are not financing for ¢development. They represent the bail-out of creditors who have made unwise, and possibly corrupt decisions. But it is the people of the receiving country who will bear the burden of typical structural adjustment programs and will have to carry crippling debt burdens from one generation to the next. The challenge, therefore, is both to restore ODA to levels that are fair and just for all concerned and to find complementary financing for development through new and innovative mechanisms such as global taxes.
Let me close my presentation by identifying several key issues which the high-level meeting on "financing for development" must place high on its agenda:
The accountability of international institutions of development, finance and trade to the standards contained in international human rights law, environment law and labour law must be established. It is euphemistic and disingenuous for the World Bank to recognize that it is sometimes (often) involved in "risk-prone projects" that create "project-affected peoples". Justice for the victims of development--those involuntarily resettled and those bearing without consent the risks and burdens of development--must become the order of the day: today! The International Monetary Fund must assume full responsibility for its SAPs--structural adjustment programmes which, all too often, result in the systematic administration of pauperization. The World Trade Organization which, it appears, is likely to become the forum for a revived attempt for negotiations of a multilateral agreement on investments, needs to ensure that trade and investment liberalization measures do not contravene preexisting international human rights, environment and labour laws.
The accountability of transnational corporations to the above preexisting laws, must also be secured as a matter of urgency. After the World Summit on Social Development, the corporations are being viewed as a main vehicle for social development. Under the present regime of economic globalization, transnational corporations have been entrusted with unparalleled authority and power. But there have been no corresponding accountability mechanisms to address the exercise of such powers. Recognizing this fact, Secretary-General, Kofi Anan, in his speech at Davos, has called upon corporations to make a social compact by adopting the international human rights framework. But, clearly, the matter is too important to be left solely to the volition of the corporate actors.
The trend of erosion of the rule of law, globally, needs to be arrested. Corporations, suing to enforce their right to do business under NAFTA-type agreements, cannot be allowed to override the well-established, preexisting bodies of human rights, environment and labour law.
Corruption in business transactions and economic affairs must be effectively addressed. Corruption constitutes a serious drain on resources available for development. Monies, sitting idly in Swiss banks, represent a lost opportunity for financing development. Moreover, the moral costs of corruption and abuse of power and authority contribute greatly to the erosion of governance and the rule of law. But it should be clearly recognized that a serious effort in fighting corruption requires concerted and complementary action in both the home country and the host country of the investor.
Development cooperation needs to be restored to its central place on the agenda of the UN. Over the past few years, there has been an unfortunate, and possibly inadvertent downgrading of development on the agenda of the UN. Peacekeeping and humanitarian assistance have tended to dominate the UN agenda. However, peace and development are closely interrelated and interdependent. Former Assistant Secretary-General, Eliasson, reminded us of the continuum from peacemaking to relief, rehabilitation, reconstruction and development. However, we need to pay serious attention to the reverse continuum from poverty, exploitation, discrimination, exclusion, social unrest, and armed conflict to humanitarian emergencies. We need to restore and enhance the role of development cooperation as a proactive approach to conflict prevention. The creation of a Global Fund to Hold Back Regression would provide a global safety net for countries in severe economic crises (like Indonesia), unable to even hold existing levels of realization of economic and social rights. The United Nations is by far the most effective forum (indeed the only viable forum) for addressing these issues. It is a forum operating under UN Charter principles, with transparency and, at least in the case of the General Assembly, on the basis of the principle of the sovereign equality of all Member States. It is also the forum in which the global consensus on development was forged through the UN World Conferences. Though a word of caution needs to be entered. Over the past two years, the five-year review process of the Global Conferences (notably UNCED and the UN World Conference on Human Rights) has been one characterized by caution and timidity on the part of well-meaning governments and the UN secretariat, faced with the prospect that some governments were attempting to use the review process to unravel the consensus and renegotiate key issues. As a result, the five-year reviews have shied away from any serious monitoring of implementation, at national and UN levels alike, of the Programme of Action of such Conferences. In conclusion, permit me to share with you a three-line verse from Shel Silverstein's book of poetry for children:
"Oh! If you are the bird, be the early bird We live today in a world of development predators and development victims creating an era of social and economic Darwinism fuelled by neo-liberal economic globalization. Unless we take victims, and their suffering, seriously, the outcome of the High-Level Meeting on Financing For Development runs the risk, in respect of both development and financing, of being premised, if one may take liberties with the callous injunction of Marie Antoinette, on the exhortation: "Let them sleep late!"
And catch the worm for your breakfast plate.
If you are a worm--sleep late".Thank you,
Dr. Clarence J. Dias
International Center for Law in Development
New York, NY
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