Guest Column
Global Development with Globalization:
From Words to Reality
By Her Excellency Tarja Halonen
It has been said that globalization has changed the lives of the people of our era faster and more unpredictably than perhaps any other phenomenon. Globalization has given hundreds of millions of people the opportunity to achieve a standard of living incomparably higher than ever before, but it has likewise driven many into great economic distress and insecurity. The world was advancing towards internationalization long before our era began, but it was only the advent of modern information technology that triggered the digital revolution, which people see as having brought the world so close but taken power so far away.
The profit-seeking market economy has spread globally since the end of the cold war. It has demonstrated its efficiency and dynamism compared with other economic systems. The idea of entrepreneurial creativity is essential and ideally compatible with the demands of modern technology. A rapid tempo is a characteristic feature of both, but it is precisely in these characteristics that risks also lie. How does one relate security to this fast pace?
A global development also needs global ground rules. To enable us to make our world develop in a more equitable way, we must be able to manage many variables at the same time. In this, nation-States still have an important role, and we must strengthen their opportunities to create favourable conditions for people and companies to operate in. Democracy, human rights and the rule of law still create a sustainable foundation for development. At the same time, the fundamental factors for a sound, socially more just economic development should be created.
Global rules of the game should be able to take account of international actors. The uncontrolled power of global markets has been regarded as the principal challenge, but a phenomenon that emerges parallel to it is that of supranational bureaucracy and the power of experts, in relation to which democratic oversight and guidance are inadequate. People have not, by any means, remained inactive in the face of these problems. Most have been convinced of the benefits of cooperation rather than closing doors.
We have a large number of international agreements and organizations in order to achieve better management of the situation.
The task of the World Trade Organization is a very important one. Strengthening trade liberalization is also a prerequisite for increasing prosperity in developing countries, but it is not enough. For the rules of the game to be fair, a lot more is demanded. The atmosphere at the Doha Conference aroused hopes after a long hiatus. It extended a hand to the poor countries, and also was a new opening towards incorporating ethical values into the trade sector.
There is certainly no desire to call into question the central role of the United Nations in safeguarding global development. The great support that the Millennium Summit received reflects this, and the Millennium Declaration may be the beginning of a new development. It includes factors that combine positive economic development with the wellbeing of the people and the environment-these are the elimination of poverty, and investment in health and education.
The International Conference on Financing for Development in the Mexican city of Monterrey continued this unanimity. If, as I hope will be the case, this message of shared responsibility can be carried on to the World Summit on Sustainable Development, to be held in Johannesburg, we shall be able to sigh with relief that we have stepped onto a common path.
But there is a real urgency about implementing these collective summit goals in practice. The changes that globalization has brought do not wait; they are affecting the whole lives of millions of people. The problem is not just the political will required for the implementation of these decisions, but also the overlapping character of various processes that are taking place at the same time and the gaps in them. This causes a sense of helplessness in people, making them angry not just at globalization but also at those who seek to manage it and their motives for doing so.
There are shortcomings in the work of the United Nations, and reform of the Organization needs additional momentum. However, international criticism has been focused above all on the Bretton Woods institutions and their operations.
It is precisely because of globalization that the role of the International Monetary Fund (IMF) as a promoter of international economic stability has grown. Its ability and skill to give the right advice have been sharply criticized in recent times. Critics have argued that the IMF operates in too narrow a sector to understand the factors that affect a society. Often, taking the social situation in a country better into consideration and getting its economy onto a course of rapid growth would be politically easier to implement and, in the economic sense, just as effective as merely relying on strict inflationary discipline. I believe the discussion that has begun will eventually have an influence, although it seems at the moment that the World Bank has been more willing to take part in this dialogue.
Other reasons certainly exist as well. The economic sphere does not have the same transparency and tradition of shared doctrines as political life. Asking for economic aid or recognizing that it is needed can be politically difficult for any government. It is also good to remember that private enterprises want to be profitable. They have often tended very easily to leave as soon as even the slightest alarm signals are heard, and thus the situation worsens further. The corporate world itself prefers to conceal its crises and often not even commonly agreed oversight mechanisms can be trusted, as evidenced by the Enron case, for example.
Nevertheless, it is a positive thing that many companies have begun to pay more attention to their social responsibility. Personnel, non-governmental organizations and consumers have all added momentum to this development. Some multinational enterprises have also agreed with international trade unions representing their workers on cooperation between the company and personnel, on the basis that the fundamental rights at work are respected at all company’s locations and in all of its operations.
International cooperation on the economic side is lagging badly behind what we are accustomed to in the political sphere. Nevertheless, it is encouraging to notice that the history of even international political cooperation in its present form is short. It is only since the Second World War that the international community has been striving determinedly to find a world order based on universal values. The development of the Declaration of Human Rights into a broad international system of treaties, to which most of the nation-States are committed, has meant an enormous positive change.
Human rights, democracy and the rule of law are the generally accepted criteria for a modern nation-State. The international community has been able to create a crisis-management system based mainly on UN actions. It does have its failings, but compared with it, we are only in the very early stages when it comes to economic crises, be it a matter of analysis, advance warnings, crisis management proper or reconstruction.
I believe we are capable of better analysis of economic crises and more effective international cooperation to prevent and manage them. I believe we can do even better than that: not only can we prevent a disaster but also find the factors of success. Political stability, equality, education and good governance are often-mentioned examples of these important factors. For this, we need information, creativity and cooperation, as well as the political will. That is why the decision by the Governing Body of the International Labour Organization (ILO) to establish a World Commission on the Social Dimension of Globalization meets a political need.
The World Commission is tasked with finding ways of ensuring that there are more winners and fewer losers in globalization. The idea is, in a way, very simple: a market economy should be regulated - without killing its dynamism and creativity - in a way that takes more account of people and nature. That has already been done well in many countries. The problem with this target is rooted in, on the one hand, the border-transcending character of globalization and, on the other, the weakness of global governance.
ILO Director-General Juan Somavia launched the World Commission on 28 February 2002. The goal set for it is “to promote international dialogue on ideas to make globalization more inclusive, at a time when the debate is dominated more by polemics and preconceptions than by facts”. Its task is to establish the facts and outline the main contours and dynamics of the process and examine the perceptions of workers, enterprises, investors and consumers, as well as different expressions of civil society and public opinion from all parts of the world.
The Commission’s co-chairs - President Benjamin Mkapa of the United Republic of Tanzania and myself - want to examine ways in which all international organizations can contribute to a more inclusive globalization process that is acceptable and fair to all. We shall analyze the impact of globalization on employment, decent work, poverty reduction, economic growth and development. And we hope to forge a broad consensus on the issues, including the involvement of all interested international organizations, as well as Governments and organizations representing workers and employers. The final result will be, hopefully, the launch of a process for addressing the key issues posed by the global economy to make globalization sustainable and promote the fair sharing of benefits.
The World Commission has met only twice to date. One worry we certainly have not had is a shortage of written material on globalization nor, at this stage at least, is there any lack of unanimity. The Commission’s nineteen members represent a broad and diverse range of perspectives on globalization and a high level of personal competence. Despite their different backgrounds, they have seen, with an almost astonishing unanimity, a need to manage risks in the international economy and to fulfil people’s wish for a decent life. As Commission members, they are as well convinced that it is possible to exert influence on different features of globalization for the good of the people, and that it shall be done.
Links:
World Commission on the Social Dimension of Globalization
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H.E. Ms. Tarja Halonen was elected the eleventh President of Finland in February 2000 - the country’s first woman head of State - and in September that year co-chaired the Millennium Summit at the United Nations. A member of Finland’s Social Democratic Party since 1971, she began her political career in 1974 as parliamentary secretary to the Prime Minister, and was elected to Parliament in 1979, retaining her seat in five consecutive elections until her election as President. She has a Master of Laws degree.
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