News

Globalisation, WTO talks and LDCs

Syed Fattahul Alim
Published 19 December 2005

EVEN before the six-day global trade talks did kick off in Hong Kong, speculations were going the rounds that the talks were doomed to failure.
Even at the fag end of the discussion no light could be found at the end of the tunnel of despair. The deadlock is due to the fact that neither the representatives of the global rich, nor those of the global poor would budge on their basic positions. Or in other words, the sticking points dominated the whole talk and stalled any prospect of reaching a fair deal between the two camps. At the end of the day, the jinxed WTO talks, however, came out, unlike the Cancun talks in 2003, with a face saving declaration -- the Hong Kong declaration. On the face of it, the least developed countries (LDCs) may like to feel happy about the fact that, after all, 97 per cent of their goods will get the privilege of duty-free access to the markets of the developed world. But the tricky 3.0 per cent still contain some 350 sensitive products on which the developed world dominated by the USA and European Union (EU) will have their control.
The issue of agricultural subsidy have remained unresolved as the EU remained unmoved by the demands placed mainly by the developing world led by some twenty countries including Brazil, China and India. The subsidy on the exports of agricultural products will, however, be withdrawn by 2013 and not by 2010 as demanded by the developing countries. Unfortunately, the developing countries and the LDCs proved to be at cross purposes over some non-farm products and Bangladesh, among others, was the ultimate loser. Its garments product will have to face tough competition in the world market and it will not have any duty-free access to the US market. Cotton export from US will not get subsidy, but cotton farmers will get it as usual. And the anti-globalisation demonstrators? At the last moment, they remained rather calm outside the convention centre this time in Hong Kong.
As is well known, the World Trade Organisation (WTO) champions globalisation and it is also universally understood that trade without any barrier or restriction is the royal road to the dream of globalisation.
Thanks to the breathtaking pace of technological progress and along with it to the revolution in communications, it has shortened the distances between the different parts of the globe unbelievably and the concept of globalisation has come out of the realm of imagination well into the domain of hard reality. And little wonder that the home of the technological advancement, the rich North (where the highly industrialised countries of the northern hemisphere lie) has become the chief advocate of globalisation. They have long been talking about this new kind of world order where there will ultimately be no hold barred at least in business.
And the countries of the poor South -- Third World countries -- will certainly be the beneficiaries of the global free trade, so said the North, as the former, through this free trade, will have the opportunity to lay their hands on the latest products of the western industries. What should the backward and the poorer countries do to get the sophisticated commodities of the rich countries cheap? The industrialised countries said that the government of the poor countries of Africa, Asia and Latin America should bring down all the protective walls coming in the way of free trade in a globalised environment. They should lower all the tariffs and duties imposed on the entry of goods of foreign origin. At the same time, they also took up a great mission of developing the economies of the backward nations of the world.
The multilateral donor agencies like the World Bank (WB) and the International Monetary Fund (IMF) came up with their advice and prescriptions to salvage the economies of the Third World from the trap of backwardness and the poverty that it engenders. What was the core message of those prescriptions embellished with aid and loan packages?
Shrinking or even removing the influence of the government in the economy and privatising the government-owned business houses and industries.
Gradually the government's financial supports to business, industries and the agriculture will have to be withdrawn. All this has to be done for the sake of competitiveness and growth, so that the economy as a whole may grow depending on its own inherent strength, without being the surrogate economy playing the second fiddle to the government. Alleviation of poverty, which was once thought to be the domain of the government, became also linked to the growth of business in the private sector. For it is the growth of business and industry in all the sectors of the economy that can ensure increased employment opportunities to the millions of skilled and unskilled workers in the economically backward countries including the developing nations and the LDCs.
So, the aid package from the multilateral donors to the poorer nations depended much on the efficiency of the governments' concerned to open up their economies to close scrutiny of the donors, both multilateral and bilateral.
The governments of the poor nations of the South had to willy-nilly accommodate the advice, the criticism and, finally, the pressure to change their policies from time to time in exchange for the aid for development and poverty alleviation. In that case, why should the governments of the Third World countries mind the counsel from the advanced economies, if the former are to follow the path of development once treaded by the latter in the past?
Moreover, are not the government and the administration of most of the developing economies and the LDCs are an inefficient, wasteful and corrupt lot? Where the governments of the poor nations themselves are the prime suspects in so far as the concept of economic development and growth is concerned, there is little reason that the 'altruistic' motives of the 'infallible' multilateral and bilateral donor agencies should come under any question by the countries at the receiving end. The underlying argument of this grand narrative of growth and development was that the world cannot progress as a whole, or in other words, the goal of globalisation can never be reached with the Third World economies always remaining as a perennial drag on the forward march of the highly industrialised rich economies of the North.
So all the aids, the prescriptions for development and the generous commitments for poverty alleviation in the LDCs have the single objective to help the backward economies out of their present misery and thus catapult them into the fast track to growth so that they may soon catch up with the advanced economies.
The essence of the just-concluded global trade liberalisation talks, so far as it is perceived by the rich countries, is that the least developed and the developing countries will only gain from the unrestricted trade with the rich countries. But how will the consumers of the poor countries buy the commodities and services offered by the big business houses of the North, in the first place? They will be destined to mere window shopping, unless they are also allowed to get the money by selling their own products to the markets of the rich countries. The prescriptions for development and the aids that go with it are all an exercise in futility unless the poor countries are enabled to sell whatever they can produce, especially to the overseas markets dominated by the industrialised world. That makes the slogan of globalisation, trade liberalisation and the WTO talks worthy of the exercise. Unfortunately, the rich members of the WTO are not willing to do as they would be done by. They are not ready to open up their markets to the products of the poor countries.

The Financial Express