Moral Imperative, Common Interest.

"Creating an inclusive global market is one of humanity's central challenges in the twenty-first century. We are all impoverished if the poor are denied opportunities to make a living. And it is within our power to extend these opportunities to all. The rich countries have an indispensable role to play by further opening their markets, by providing deeper and faster debt relief, and by giving more and better-focused development assistance."

DESPITE DECADES OF LIBERALIZATION, the world trading system remains burdened with tariffs and quotas. Most industrialized countries still protect their markets for agricultural products heavily, and all protect textiles--the two sectors in which developing countries have a recognized comparative advantage.

AGRICULTURAL SUBSIDIES in the industrialized countries drive world prices down, hurting farmers in poor countries even more. Global economic losses from agricultural protectionism may be as high as $150 billion per year--about $20 billion of it in lost exports for developing countries.

DEVELOPING COUNTRIES also cause a great deal of damage to themselves by their own protectionist policies, in agriculture and elsewhere.

THE ESTIMATED COST PER JOB "SAVED" in industrialized countries ranges from $30,000 to $200,000, depending on the industry.

DEVELOPMENT ASSISTANCE has been in steady decline for several decades. There are some signs that this decline has now begun to flatten out.

DESPITE RECENT INCREASES by five countries, no general upward momentum is yet visible. While it is true that private investment flows have increased significantly, many poor countries are not yet fully equipped to attract such investment.

WORLD EXPORTS have increased tenfold since 1950, even after adjusting for inflation, consistently growing faster than world GDP.

FOREIGN INVESTMENT has risen more rapidly; sales by multinational firms exceed world exports by a growing margin, and transactions among corporate affiliates are a rapidly expanding segment of world trade.

FOREIGN EXCHANGE FLOWS have soared to more than $1.5 trillion daily, up from $15 billion in 1973 when the regime of fixed exchange rates collapsed.

A RECENT TRANSNATIONAL telecommunications takeover created a firm whose market value exceeds the GDP of nearly half of all UN members, though it ranks only as the world's fourth most valuable company.

GLOBALIZATION has resulted in the world's commitment to the poor, slowly coming to be seen not only as a moral imperative but also as a common interest.

What We The Peoples Can Do

Grant duty-free and quota-free access by industrialized countries for essentially all exports from the least developed countries, and endorsing that commitment at the Third United Nations Conference on the Least Developed Countries in March 2001.

Provide better market access for the agricultural and industrial products exported by the least developed countries, as highlighted by the recent UNCTAD X Conference in Bangkok. This would be particularly helpful to sub-Saharan Africa.

Make the case, by political leaders in developing countries, for upgrading skills through education and training, and for providing adjustment assistance, rather than trying to freeze declining industries in place, which always fails in the long run.

Build inclusive globalization, not only on the great enabling force of the market but also on a broader effort to create a shared future based upon our common humanity, as a positive force that does not leave billions behind in squalor.

Devising New Strategies

Mr. Annan refers to the desire of some to make trade liberalization conditional on the developing countries' meeting certain standards in the areas of labour, the environment and human rights, and notes this issue must be handled with great care so that it does not become yet another pretext for protectionism. He proposes a different course.

First, in most of these areas, agreements already exist on universal values and common standards--the fruit of many conferences and negotiations. What is needed now is for States to live up to their obligations, and the relevant United Nations agencies to be given the resources and support to help them. If that means that the world should have a more robust global environmental organization, for example, or that the International Labour Organization needs to be strengthened, then those possibilities should be considered. Second, global companies must play a leadership role; that is why he Secretary-General has invited the business community to join in a "Global Compact" to enact a set of core values n their own corporate practices in three areas: labour standards, human rights and the environment (page 45).

Additional aid flows should be deployed to support priorities of encouraging growth and helping the poor. It should also promote domestic and foreign investment opportunities. For example, it could perhaps be used to offset some of the risk premium of private investment in poor countries. The private sector can also be helpful in providing pre-investment assistance--as in the case of UNCTAD's partnership with the International Chamber of Commerce to produce investment guides for the least developed countries. If external assistance programmes are to yield the best results, their administrative burdens on the countries they are supposed to help must be significantly reduced, and those countries must play a full part in designing them. The United Nations Development Assistance Framework is a useful--and by all accounts, a successful--step in that direction, as are changes recently introduced by other agencies, including the World Bank (page 41).