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Globalisation - the view from Bhutan

About the author
Lyonpo Jigme Thinley is the foreign minister of the Kingdom of Bhutan.
Together, the developing world accounts for four-fifths of the world population. We have an abundance of natural resources and an awesome capacity to alter the course of the world. For all our diversity in religion, culture, race, and ideology, some questions may be asked about globalisation on behalf of all of us.

To start with, what is it? Is globalisation a natural progression towards a state where all the evils of society will be removed by means of integration and an equitable world order? Or is it a ‘conspiracy’ of the industrialised countries to establish and maintain a new world order which will consolidate and perpetuate the interests of a privileged minority of the world’s population?

We should ask ourselves why it is that the industrialised countries are generally enthusiastic about globalisation, while the developing states are possessed by doubts and anxieties? For a start, the definition and rationale of globalisation emanate from the developed countries. The main players and beneficiaries who propel the processes are the industrialised countries led by the G8 and the large multinational corporations based mainly in the West.

In addition, the institutions which frame the rules of the game are perceived to be under the control of the industrialised countries, notwithstanding their democratic structures. Finally, the situation speaks for itself: deepening poverty in many developing countries contrasts sharply with the growing affluence in the West.

If we accept that globalisation is a product of human activity, how might we manage it to serve the larger interest of human progress? In order to stimulate reflection and debate I shall focus not so much on the positive aspects of globalisation, but on the less palatable aspects.

One-sided economics

In the economic realm, globalisation has come to mean the supremacy of market forces through a set of rules. These are established on the premise that national governments are inefficient, and their regulations a hindrance to the free movement of goods, services and capital which bring with them the promise of growth and prosperity. The primary purpose of these rules, therefore, is to invalidate and dismantle national laws and regulations and to promote market liberalisation. The WTO – the brainchild of the industrialised world – was set up to this end, in order to preside over free trade.

In the view of the developing world, the industrialized countries are leading the way in a process of establishing these rules – only in order to break them. In order to maintain their lead against international competition in crucial areas, they have resisted moves to free up the movement of labour; insisted upon universalising labour standards and imposed anti-dumping charges. They have developed a fixation with garment quotas and with restricting transfers of knowledge and technology.

This has led critics of globalisation to allege that liberalisation is one-sided. The South Centre has observed that while liberalisation is largely complete among industrialised countries with very low tariff rates on most manufactured goods, the developing countries continue to be faced with higher tariffs, particularly in regard to their most valuable exports – agriculture and textiles.

It took thirty years for rich countries to agree to open their markets to textile and clothing exports from the countries of the south. Even that agreement remains to be implemented. Hence the oft-repeated cliché about a “level playing field”. This conjures up an image of little David having to face the wrathful might of Goliath without so much as a sling.

In addition, we have the common, often valid complaint of a lack of transparency with respect to the way in which the rules are negotiated. Typically, the developing countries react to this situation with discord, frustration and submission. It is little wonder, then, that rules favoring the strong are passed.

Politics – a divided scene

The world changed with the disintegration of the Soviet Union. The days of rivalry along ideological, political, military and trade blocks ended with the convulsive ending of the Cold War. Globalisation gained an amazing impetus. And the third world was no more. North-south dialogue was rudely halted and the development agenda was shelved. Meanwhile, the UN was visibly weakened, crippled by pecuniary limitations imposed with brazen impunity by certain members who enjoy powers beyond ordinary membership.

No longer wooed by the Cold War rivals and their proxies in the new uni-polar world, the developing countries remain divided, further disadvantaged by having lost their value. As they struggle against marginalisation, it is only natural that many will pick up whatever crumbs they can along the tracks of the global gravy express.

But is it surprising if they are beginning to assert their sovereignty against international rules and regulations which are imposed in ways that are neither culturally sensitive, nor considerate of differing stages of development? As various multilateral institutions and mechanisms become more and more intrusive and authoritarian, and as they challenge the legitimacy of sovereign rights against international norms, developing countries have become helpless against external shocks and the domestic consequences of free trade.

Multinational pressure

There is also the question of NGOs, both external and homegrown – the latter being usually financed by the former, or similar sources. Increasingly, NGOs too come with their own rules, ones which question the political legitimacy of host governments.

Then there are the multinationals for whom the interests of communities and even customers must yield to those of their shareholders. The ways in which they can extract the connivance of both governments and public in developing countries when they need it are numerous indeed.

Of course, there is also a plus side to this multinational pressure. For the wonders of instant and continuous information have put every government under global scrutiny against the yardstick of human rights, justice, and accountability. To this, one can add the incentive from multinationals and investors who demand the preconditions of an enabling environment within a democratic establishment.

Disappointed expectations

Developing countries will not be able to survive and compete successfully in a globalised world without considerable growth in the social service sector, which is essential for their physical and intellectual empowerment. The Millennium Summit of the UN resolved to reduce poverty by half by the year 2015. It did so confident that higher growth would raise levels of employment, wages, and improve access to standards of health, education and other social services.

In reality developing countries have not witnessed this expected growth. While it is beyond the power of a country to alleviate rising poverty, Overseas Development Aid (ODA) flows have trickled, and soaring debt burdens have served to aggravate gaping wounds. ODA has declined in the ’90s to an average of 0.2% of GDP from the OECD countries. This contrasts with their pledge of a minimum of 0.7%. The illiterate and the sick in many developing countries will continue to see their governments spending more on debt servicing than on their education and health.

Allowing the free flow of Foreign Direct Investment (FDI) into the developing countries was supposed to render the begging bowl unnecessary. We know now that FDI flows and the participation of the multinationals are not in the direction where investment is needed, but where there is profit. Even where such flows do take place, it has resulted in the widening of the social divide. It has given greater access to a higher quality of services to the already advantaged.

The Bretton Woods Institutions, on the other hand, have until recently resisted the call for a fundamental change in their principles and approaches. This has caused serious problems to developing countries.

Where more government did not mean more services, less government does not appear to be more advantageous for the poor. And as globalisation continues to accelerate on the wings of profit, social responsibility seems to have flown away from our collective conscience. It is not in the normal nature of market forces or the multinational corporations to show concern for equity, or to feel responsible for those who cannot afford their goods or services.

What chance of change?

Can this change? For developing countries with large populations of poor people, the government’s role is crucial. It must intervene to supplement the actions of the market forces, at the very least to establish, promote and protect arrangements for the distribution of basic services, fair wages, food security and so forth.

This need is glaring in the shameful disparities that have come to characterise our society as never before. Boundless affluence exists amidst an extreme misery of poverty, deprivation and sickness. During the last decade of accelerated globalisation, global inequality has become worse than ever, and per capita incomes have actually fallen in fifty countries.

This yawning divide is even being felt in industrialised countries. There is increased insecurity in the work-place under threat of mergers and shift of production lines to low-wage economies. Globally, the number of people who earn less than one dollar per day increased to 520 million in 1998. Against this tale of misery, value of shares and stocks rose on Wall Street and elsewhere. Since 1970, the wealth of the industrialised countries has doubled.

Social impacts

The impact of globalisation on the social fabric has been stark. Increasing urbanisation has brought about the disintegration of family and community, cohesion and cooperation. Most notably, the revered tradition of extended family – that unfailing social safety net – is fading into memory even as we extol its virtues. At the same time, the very foundation of the welfare state, that product of Western ingenuity, is also being shaken to its very roots.

The sinking health of our environment is largely attributable to the developed countries. Yet it is the poorer countries that are forced to choose between conservation and population pressure for more land. What is needed is genuine solidarity and equilateral cooperation in a spirit of shared responsibility. But the solutions propounded by the countries of the North tend to be based on the application of their economic and political powers.

When it comes to the transfer of science and technology, current arrangements regulating the transfer including Trade Related Aspects of Intellectual Property Rights (TRIPS) are not designed to facilitate the flow of knowledge. Patent rights in particular, have hindered and in some cases halted the cross-fertilisation and spread of knowledge.

The monopoly enjoyed by the pharmaceutical companies on their products is only the most glaring example of this. This goes far beyond the right to earn a reasonable return on the investment which ostensibly justifies it. The plight of AIDS and HIV patients in Africa desperately crying out for medicine comes vividly to mind.

As for the security perspective, globalisation seems to have failed humanity. It has failed to rid humanity of the spectre of a nuclear holocaust. Arms and armies are as prominent and threatening as ever, and the oiling of the weapons industry of the rich countries by the developing countries remains a glaring irony. So too is the fact that the five permanent members of the Security Council top the league of arms exporters. Wealth may be one way of pursuing security but it seems that creating insecurity is one way of pursuing wealth.

Gross National Happiness

Unless the course of globalisation changes, the UN millennium summit goal will remain a dream. Yet there is hope. The industrialised countries and the multilateral financial institutions have pledged to address the plight of the poor with more urgency. Their agenda includes some debt cancellation, a development plan for Africa and a global fund for the fight against AIDS/HIV. But are these pledges being realised?

I have tried fairly to represent the developing countries’ sense of fear and injustice. But I have spoken little of the amazing ways in which globalisation has touched and uplifted the people of the developing world.

Globalisation is the product of our collective action, and it is in our collective interest to generate the will and capacity to fashion it into a creative force. Our world is shrinking by the day. The impact of the ideas and actions of individuals and countries can and do have unimaginable consequences for the rest of the world. We cannot avoid but bang into each other everywhere, all the time. It is therefore vital that we strive to live equitably. Without this there can be no harmony, only constant collision.

Humanity must evolve a new set of ethics, a new approach to sharing rather than profiting. We need to accept that prosperity amidst inequity is fragile and evanescent. In the final analysis, wealth is only a means to the happiness that the human individual seeks in life. Therein lies the philosophy behind the objective of Gross National Happiness (GNH) that my own country in the high Himalayas has undertaken to pursue. But happiness is only an emotional state of being. It is an illusion. Is there anything absolute and permanent in the nature of prosperity? It too is an illusion. The only way that an illusion can be sustained is when it is shared by everyone.

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