Globalization and development: enabling fairer access to the world economy.

Although technological advancement and increased economic interdependence are great advantages of globalization, a large part of the world population does not have access to these benefits. To encourage discussion of this shortcoming, the fifty-ninth United Nations General Assembly organized a meeting on 29 October 2004, with the participation of Amartya Sen, Lamont University Professor at Harvard University and 1998 Nobel Laureate on Economics, and Martin Wolf, Associate Editor and Chief Financial Commentator of the Financial Times. The Norwegian Millennium Development Report was also presented.

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In his keynote address on "Forging coherence to achieve the Millennium Development Goals (MDGs) in the context of globalization", Mr. Sen warned about the danger of focusing the discussion of globalization on whether the poor were getting poorer or less poor, like many anti- and proglobalization groups did. Such perceptions could be true depending on the indicators chosen. The central question, however, lay on whether the poor could feasibly have a fairer deal with a globalization division, that is, an increased distribution of opportunities in a modified global order.

Mr. Sen emphasized that there was no need for dispensing the market economy, but rather that globalization on market alone was not enough. It needed to address global policies and make alterations of economic and social conditions, such as assessment of adequacy of global institutional arrangements, trade agreements, technological dissemination and distribution of natural resources, and fair treatment of accumulated debt. Moreover, an increased focus on education, epidemiology and micro-credit could contribute to such enabling conditions. Within such discussion, he argued, the issue of the arms trade was central. Over 80 per cent of the world's arms exports came from the Group of 8 countries. If one considered that small arms and light weapons are the main tools of war, that was an important concern to the development of many countries. The difficulty of the international community to address the current situation of small arms trade reflected a certain blindness towards global justice.

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Mr. Sen referred to the General Assembly's call for the need to forge greater coherence in order to attain the MDGs. However, he highlighted that the Millennium Declaration went beyond the MDGs, making a powerful case for democratic and participatory governance. He reminded the UN audience that the attainment of global justice based on shared responsibility required economic, social and political reforms, enhancing participation of developing countries in international economic decision-making. On the role of civil society in the process of a fairer globalization, he said that it was central, although not generated by capitalism, as it operated within markets.

Mr. Wolf agreed with Mr. Sen that the market economy was the only arrangement capable of generating prosperity to developing countries, even though it could happen within a long-term framework. He felt that the August 2004 report of the UN Secretary-General, titled "Globalization and Interdependence", put forward an unrealistic globalization process based on political machinations rather than on economic forces. These could hamper, he argued, the needed political and economic reforms, adding that success depended on an interaction between domestic resources, institutions and policies, and the global market. Therefore, targeted aid and liberal trade policies, as set up by the MDGs, were secondary matters. They focused on the capability of developed countries to contribute to development, rather than helping developing countries to benefit from globalization, and thus focused on the "investment climate", a pre-condition of successful market economy.

The market economy is based on strong, effective but limited States. International institutions did not have the global form capable of limiting States and thus of delivering global justice, Mr. Wolf argued. He cited a World Bank study which shows that developing countries regulated their economy more than developed countries and were more vulnerable to corruption. However, international institutions should allow States to make mistakes and learn from them, even though these could have dire consequences to their populations. At the same time, there was also a need for some form of global capacity to intervene when States were failing or had failed.

The more international regimes were focused and enforceable in Member States, the more legitimate they would be. Mr. Wolf felt that the World Trade Organization (WTO) had strayed too far in promoting trade liberalization. The result had been a failure to enforce labour and environmental standards, forcing countries to increase protectionist barriers. The main priority of the global trade system would be to bring preferential and bilateral agreements under control. In answer to a question, Mr. Wolf clarified that he supported the Generalized System of Preferences (GSP) mechanism for developing countries and the European Union's proposed changes in that regard, but dispproved of the proliferation of bilateral agreements centred on major developed countries, which were not entirely free-trade accords and posed a challenge to the business community. A multilateral system approach with a broad range of countries was a better arrangement. Mr. Sen agreed, pointing out that a multilateral, broad-based approach to trade was necessary.

On the environmental impact of globalization, Mr. Wolf said that it was wrong to see globalization as environmentally neutral. He argued that it was legitimate for businesses to change countries if they were not happy with local environmental regulations, as it was reasonable that countries had different views on the level of enforcement of environmental standards. He saw universal self-governance conflicting with universal solidarity. On this point, Mr. Sen said, the problem lay on the assumption that global society functions as nations, which was not the case. He stressed that while it was significant to see relations between nations, relations between citizens were also important. Inequality in the world was not only a question of global governance but also about public discussion, and that was where civil society came in. In response, Mr. Wolf said he had no problem with the issue of justice on a global level but the implications of treating the world in that way were extraordinarily radical, as individuals suffered mainly from domestic threats.

Kenya's representative emphasized that justice delayed was justice denied. Politicians in countries experimenting with democracies, who failed to fulfil promises, would make democracy deteriorate, thus decreasing the chances of such countries joining the international community. To that, Mr. Sen added that there was the need for international commitment to push reforms forward. "I really do think that the issue of global democracy in the form of public discussion is much needed now", he said, stressing the central role the United Nations had to play.

During the presentation of the Norwegian Millennium Development Report, Hilde F. Johnson, Norway's Minister of International Development, called for Member States' commitment to the MDGs, stating that her country had showed commitment, policy coherence and delivery on framework conditions. In trade, Norway had abolished all duties and quotas for products from the least developed countries and was improving access to imports from other developing countries. It was ready to abolish export subsidies as part of a negotiated solution in the WTO; more-over, it would continue to forgive debt without using the development budget.

In addition, Norway aimed to increase development aid to 1 per cent of its gross national income in 2005--an increase of more than 10 per cent from 2004. It was also assisting developing countries in important policy areas, such as ensuring that investments were not made in companies that violated human rights or basic humanitarian principles and that engaged in corruption or environmentally damaging activities, supporting international initiatives against corruption and money laundering, and addressing environmental problems affecting developing countries. As a major producer of oil and natural gas, Norway was committed to reducing the emissions produced domestically.

Mr. Sen welcomed the efforts of Norway and praised it for the particular contribution it was making to the attainment of the MDGs, the number of environmental policies it had set forth, and its determination to encourage public discussion of issues. In his closing remarks, he pointed out that the interdependence of sectors meant that all were affected by it and that there was a need to recognize that global relations were beyond interstate relations. Mr. Wolf said that development and globalization would always be a topic for debate, suggesting that there was a need to improve the terms of reference in regard to the economies that want to be included in the globalization process.

By Juliana Ribeiro, for the Chronicle