Challenges of Globalisation

a) Trade: unfair, with double standards

Economically developing countries have been the losers under the rules of trade under the Uruguay Round of GATT and the WTO. It is estimated that economic losses of the non-industrialised world from the agricultural protectionism of the industrialized world may be as high as $20 billion per year. According to UNCTAD, it is estimated that an extra $700 billion of annual export earnings could be achieved by the South in a relatively short time in a number of low technology and resource-based industries, if those markets were not protected in the North.

b) Foreign Direct Investment: concentrated in the developed and emerging markets

FDI has been rapidly increasing; however nearly three quarters of it takes place among industrialised countries, with the largest share in the UK and US. Of the remaining quarter, most FDI flow is concentrated in a few emerging market countries in unsustainable industries, and the poorest countries receive just a tiny fraction of FDI. FDI should be conditioned on the building of technological and human infrastructure as determined by local participants. FDI should not be conditional on tax holidays, relaxed standards of entry or other 'race to the bottom' concessions.

c) Financial markets: highly volatile

The Asian financial crisis of 1997-1998, characterized by swift withdrawal of investments and rapid spread of the crisis to other countries, exposed the risks inherent in close integration with the global financial markets. Human impacts are severe and are likely to persist long after economic recovery. Financial crises have been increasingly common with the spread and growth of global capital flows as pushed for through the undemocratic process of the IMF, World Bank and the Wall Street treasury complex. They result from rapid buildups and reversals of short- term speculative capital flows, also known as "Casino Capitalism" and are likely to recur. Liberalized financial markets, without well-developed monitoring and regulating system, proved to be very vulnerable to the volatility of capital flows.

d) Social Impact

A recent UN study on the experiences of various developing countries shows liberalisation of trade and capital has led to greater inequality of incomes. A World Bank report says the worldwide total of people living on $1 per day or less has risen from 1.2 billion in 1987 to 1.5 billion today, and if recent trends persist, will reach 1.9 billion by 2015. Meanwhile, most countries have experienced erosion of the tax base because of liberalisation of trade and financial markets, and fiscal pressures are cutting back on the supply of public services. Tax revenue declined in poor countries from 18% of GDP in the early 1980s to 16% in the 1990s.

Although labor mobility is still highly restricted compared to high capital mobility, economic globalisation has had a great impact on labor markets. Job and income security has worsened in both poor and rich countries. Employment situation in most countries is increasingly characterized by reduced wages, underemployment, informalisation, and greater flexibilisation of labor. Wage differentials between skilled and unskilled workers rose with liberalization of trade and capital. Competition for foreign investment and the greater ability of employers to shift production to other locations has undermined job security and collective bargaining. And many countries have weakened labor laws. In particular, mergers and acquisitions have come with corporate restructuring and massive layoffs.

The privatisation of prisons, combined with an increasing criminalisation of civil life through harsh laws, mandatory sentencing and "three strikes you're out" policies militarise our societies and criminalise poverty.

Ironically, the advantaged are also oppressed by their over- development, evidenced by poor health consequences of overeating, personal isolation stemming from community disintegration and spiritual bankruptcy through the cultural dominance of consumerism.

e) Militarism and Military Spending

280 billion dollars are spent each year globally on militarism, one quarter of which would provide people with housing, food, education, and environmental clean up for this planet. The conditions for war are created by economic policy. In the recent past, macro economic policy has caused crises in resources and local markets that have built tension and caused war. High-tech sanitised warfare combined with low intensity weapons, the development of rogue armies; privatised defence force companies that protect private property and wage wars and child soldiers are all manifestations of modern militarism. Searching for a post-cold war profit margin, many military corporations moved into the arming of civilian police forced with so-called "non- lethal" weaponry, much of which (pepper spray etc) has been used on people calling for social justice and a halt to the negative developments of globalisation.

f) Debt

Debt servicing requirements imposed by the IMF through Structural Adjustment Programmes reached an unpayable level ten years ago and prevent Heavily Indebted Poor Countries (HIPC's) from making adequate investments in education and health care. The total debt of developing countries amounts to $2.5 trillion. The enhanced HIPC initiative, agreed by the Cologne Summit of the G-8 and endorsed by the IMF and the World Bank last year, is alleged to offer broader debt relief than the original HIPC initiative launched in 1996. However, projected reductions in debt servicing are far too conditional, slow and are too small to make any difference in many countries

g) Technology

Technology is a tool that has the potential to organise NGOs, educate constituencies and to empower all of civil society. Technological advances are driving economic globalisation. The Internet had more than 140 million users in mid-1998, a number that is expected to pass 700 million by 2001. English prevails in almost 80% of websites. However, the Internet poses severe problems of access and exclusion, especially in South Asia and Africa. The excessive privatization and concentration of technology worldwide is also highly problematic. Corporations define research agendas and tightly control their findings with patents, racing to lay claims to intellectual property under the rules set out in the agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

h) Gender impact

The use of women's flexible labour in both developed and developing countries has been a central strategy of globalisation in the development of the global assembly line. While more women are now in the paid labour market, their work is characterised by insecurity of employment, lower wages and poorer labour protection. In addition women's unpaid labour in the home and community is taken for granted as a way of making up the service deficits created by the privatisation of public and social services. Capital accumulation at the top is possible because of the low paid and unpaid work provided by women.

Poorer women in both developed and developing countries are particularly vulnerable to economic downturns and financial crises. Poverty heightens the probability that a woman's biology will become her destiny, and also puts great responsibility on women to carry the survival of their community, not to mention the global burden caused by overpopulation.

i) Environmental impact

With the dynamics of globalisation, some of the worlds unsustainable industries - the ones that should be pushed out - are instead going global. For example, the fossil fuel industries are among the world's most globalised, pushing for further development in the South while resisting curtailment of its use in the North.

Carbon emissions, which are the major cause of global warming, have quadrupled in the last 50 years. Average temperatures are projected to increase by 1.2 to 3.5 degrees Centigrade over the course of the present century, which would raise sea levels and pose threats to hundreds of millions of coastal dwellers. Nevertheless, the industrialized countries still use excessive energy and are reluctant to ratify the Kyoto Protocol, which will bind them to verifiable emission limitation and reduction targets. It should be noted that one fifth of the world's people living in the industrialized world account for nearly 60% of the world's total consumption of energy, and thus are most responsible for global warming.

j) Cultural impact

Globalisation is accompanied by a flood of cultural products, information and ideas in one direction, from rich countries to poor. Rather than a dialogue between cultures, we are witnessing a spread of global brands, images and ideologies, which increasingly threatens the diversity of our cultures, political systems and identities. Individual choice and creativity are being subordinated to the demands of consumerism and technology. The domination of English pervades the global system and is a form of linguistic imperialism. Just as biodiversity is under threat, so too is our human diversity and specificity.

k) Food as a Human Right

Water and food are not merely products or goods, neither are they services. Access to these essential components of human life is a right held in common. The piracy of food, appropriation of food heritage and speculation on food should be seen as a crime against humanity. Similarly, the patenting of seeds and indigenous medicinal knowledge under the TRIPS agreement of GATT threatens our biosecurity and should be reversed. Bio-prospecting should be regulated as part of this reversal. UN-accountable institutions, such as the Food and Agricultural Organisation (FAO) and the World Intellectual Property Organisation should be accountable for these areas and regulatory mechanisms.

l) Refugees, Immigrants and Displaced Persons

The current dominant form of globalisation has directly contributed to economic and ethnic strife resulting in wars and millions of people being forced into the status of refugees and asylum seekers. The vast majority of politically displaced persons are women and children, often left economically insecure, physically vulnerable and emotionally wrenched. For many their anticipated short term displacement dissolves into a permanent situation. Still millions of other people, especially from the global south become economic refugees as they are forced to migrate north in search of some modicum of economic security as immigrants, sometimes legal, often not, they are subject to economic exploitation, criminal encroachment, political discrimination and cultural marginalisation. They are often subjected to xenophobia, and the injustices of unfair laws, which become unnecessarily punitive.

m) Lack of Global governance

We are lacking adequate global governance. Economic globalisation, which allows corporations to make production, marketing and investment decisions relatively free of national constraints, has revealed a mismatch between current systems and institutions that are national or inter-national and the global nature of economic activities. The criminal informal economy drives illicit drugs, money laundering and the trafficking in women and children and justifies the intervention of a global governance system.

What passes for global governance is controlled by institutions with an agenda of deregulating trade rather than democracy, peace, human rights or environmental protection.

Poor countries and poor people have little influence in today's international policy making. At the World Trade Organization, about 30 poor countries cannot afford to run permanent offices at its headquarters in Geneva, and are therefore excluded from shaping crucial trade agreements that affects their future. At the IMF and the World Bank, the prime mechanism of control is the size of rich countries' capital subscriptions, which gives them enormous voting power by comparison with the mass of developing countries. The Group of Eight nations has 48% of the voting power.