Are We Underplaying the Role of the State?

Economic development, in principle, should be capable of delivering improved education, health care, access to food, water and housing, and improved personal security. In an era of globalization and economic liberalization within and between States, one might expect to see more of these benefits. But there is a widening gap between the rich and the poor, both within and between States. Economic power of multinational corporations threatens the ability of States to make and implement decisions in the interest of their peoples. The effect can be felt in escalating levels of corruption, or in political pressure from more developed States, which pressure has been "bought" by wealthy corporations.

Economic development has hidden costs; it requires the State to provide an educated workforce, a safety net to ensure that job flexibility and the loss of security of employment can be accepted, and built-in environmental costs. But in many cases liberalization has been accompanied by a decline a wide variety of public provisions or in their quality, without commensurate decrease in spending on armed forces, perhaps not surprising, given the levels of instability and violence. But decline in provision of education and health care and absence of economic and social security may be contributing to these ills.

How can we control the adverse effects of economic development? Protectionism and nationalization are not the answer. Tools of a non-economic character are required to regulate the operation of economic development. It is in everyone's interest, including multinational corporations, to promote stability as the most favourable environment for sustainable economic growth. This requires equity, accountability, sustainability, community values, empowerment and participation in decision-making processes. It requires medium- and long-term visions, with implications for the concentration of capital and the ease with which capital transfers should be made. But multinational corporations are not well placed to determine how to promote these values. Their function is to make profit and promote economic growth. It is for individuals, the institutions of civil society and the State to determine which values to foster and how. Each, however, needs the other. Without economic growth, there is not enough to distribute.

Multinational corporations, the institutions of civil society and the State need not be in competition with one another. There is a necessary separation of roles, rather akin to the separation of powers taken for granted in the organization of most States, a need to work in partnership based on creative tension, in order to deliver the objectives of the international community as a whole.

We are not starting with a level playing field. Results of historical inequality and exploitation must be taken into account not only when establishing the goals, but also how they are to be attained. Intergovernmental organizations need to be pressured by non-governmental organizations into making sustainable human development and the eradication of poverty their priority. Much has already been achieved, but experience shows that reliance cannot be placed on a trikle-down effect. Initiatives need to start at the grass roots. Multinational corporations need to recognize their responsibilities towards the communities from which they derive their profits. They require an educated and healthy workforce, not necessarily provided by themselves.

An absolutely key partner is the State. There has been an increasing tendency to downplay its role and importance. Some political leaders even appear to welcome that, disclaiming all responsibility and saying there is nothing they can do in the face of the economic strength of developed States, multinational corporations and/or the "laws" of economics. This is not true. States are supposed to have the monopoly of lawmaking power, internally and internationally, and of legitimate use of force, with opportunities for regulation and responsibilities. States have an obligation to secure respect for the human rights of those within their jurisdiction, not just within their territory, but all those directly affected by their decisions and their execution; responsibility for making and enforcing both domestic and international law. The promotion of sustainable human development and human rights cannot take place without strong and accountable States.

Stability is both the responsibility and in the interests of States, multinational corporations, communities and individuals, whose partnership must recognize the particular contribution of each to the whole. In the process of realizing that partnership, economic development will become our servant and not our master.

Francoise J. Hampson Member, UN Subcommission on the Promotion and Protection of Human Rights and Professor of Law, University of Essex, United Kingdom