GLOBALISATION EXPLAINED
A report from the International Society for Ecology and Culture http://www.oneworld.org/
"In recent months we have witnessed the near meltdown of the global economy, following the collapse of regional economies in Asia, Russia and South America. The global marketplace is becoming increasingly vulnerable and volatile. Financial turmoil on the other side of the world has led to job losses much closer to home. Hardly a day passes in Europe and North America without another factory closure or merger-and further unemployment.
As the failings of the global economy become more evident, all our political leaders can offer is more of the same-in other words, more "free trade". They still believe that the liberalisation of trade and finance will create employment and raise the standard of living in rich and poor nations alike. They still believe that international competition is the way forward. They still believe in globalisation.
"Globalisation is not a policy choice, it is a fact" - Bill Clinton
"Globalisation is irreversible and irresistible"- Tony Blair
Here we present a very different argument. As we see it, globalisation is a recipe for economic, environmental and cultural disaster. Local and national economies everywhere are being exploited by the activities of heavily subsidised investors and multinationals. Far from bringing prosperity, globalisation is in fact triggering an international 'race to the bottom'-threatening to impoverish people and degrade environments in every corner of the world.
Aware of growing public unease, governments are beginning to put a new 'spin' on their economic policies. Tony Blair, for instance, likes to talk about 'The Third Way'. Nonetheless leaders of every political colour continue to promote further globalisation through a series of international treaties. If they get their way, our rights as citizens, which are already undermined by existing agreements such as Maastricht and the General Agreement on Tariffs and Trade (GATT), will be further eroded. These agreements have already drastically undermined public participation in decision-making, giving power to unaccountable bureaucracies dominated by financial institutions and big business.
The next trade treaty in the pipeline, known as the Multilateral Agreement on Investment (MAI for short, but commonly known as the 'Multinationals' Charter') would give international companies the right to overturn national laws and even sue national governments. The MAI negotiations have been stalled, but they could be resumed under the auspices of the World Trade Organisation (WTO).
The good news is that, whatever Bill Clinton and Tony Blair may say, we can do something about it. The global economy is the result of deliberate policy; it isn't inevitable, it is reversible.
Money and Multinationals
Ironically, although all the talk is about 'trade', the major product on the global market is not something you can clothe or feed yourself with-it is money. Every day of the year, roughly $1.3 trillion dollars is gambled on the international currency markets. According to the World Bank, 95% of this involves pure speculation, leading one prominent New York financier to say that the current financial system is "a greater danger to stability than atomic weapons."
The entire global financial system is based on banking, borrowing and debt. It gives a massive and unfair advantage to multinational corporations over small and medium-sized enterprises. Companies have to keep merging to remain profitable, with the result that most multinationals are effectively monopolies and some are larger and more powerful than nation states.
Of the 100 largest economies in the world today, 51 are corporations, 49 are nation states
The sales of General Motors and Ford are higher than the GDP of all sub-Saharan Africa
Almost all primary commodities, such as coffee or cotton, are controlled by six or less companies
Multinational companies are free to locate their operations wherever they find the best 'investment climate'-meaning the lowest wages and the weakest employment and environmental controls. The result is that, as profits boom for a small elite, the future for virtually everyone else is undermined.
While smaller companies operating within the national arena continue to pay taxes, transnationals can shift their assets at a moment's notice to avoid taxation. As a consequence, revenue is lost and the power of government eroded. Around the world, governments routinely offer huge incentives to prevent big business from relocating elsewhere.
Jobs
In the global economy, jobs are under constant threat. Today, the largest employer in the US is not General Motors or IBM, but the temporary agency Manpower. The number of people out of work in France has risen from less than half a million to over 5 million in the last 20 years-a period that saw an 80% increase in GDP. In the summer of 1998, the north-east of England, long seen as an investment hot-spot, suffered repeated closures of foreign manufacturing plants.
In the South (of England), jobs in the factories and sweatshops which produce goods for the global market offer little more than mere survival. Wages are minimal, while environmental and social welfare regulations are often non-existent.
The Environment
More trade means more transport-and that means more pollution. Just as scientists are realising that climate change is a genuine and serious threat, requiring a drastic reduction in greenhouse gases, globalisation is demanding the use of ever larger quantities of fossil fuels. In 1997, political leaders signed an accord at Kyoto to reduce global emissions of greenhouse gases, while at the same time promoting trade and transport policies that will increase emissions.
Globalisation is simply incompatible with environmental sustainability. Nonetheless, within the European Union alone, governments plan to build another 30,000 miles of new roads. Politicians worldwide are providing the infrastructure necessary to cope with a doubling of air travel by early next century. Meanwhile, in China, the number of cars is expected to rise tenfold over the next 20 years.
The British Hadley Centre for Climate Change predicts:
Land temperatures will rise by 6�C by the end of next century
The number of people affected by coastal flooding will rise from 5 million to 200 million by 2080
By 2050, another 30 million people will go hungry and an extra 170 million will suffer from extreme water shortages
Food
Nowhere is the impact of globalisation more evident than in the supply of food. The average meal now travels thousands of miles before it reaches the family plate.
In French supermarkets, the garlic comes from Chile, while in the UK apples from New Zealand sell for less than those grown half a mile away.
This is not a free market at work, but the result of huge subsidies aimed at promoting global trade. Big business now has almost complete control of agricultural production and distribution. Meanwhile, small and medium-sized farms are squeezed out-even though they provide more jobs and make better use of the land.
Worst of all, we can no longer trust the food we eat. In the last five years, the UK has seen outbreaks of BSE, salmonella and e-coli. Despite scientific concern and widespread consumer objections, transnationals are now introducing genetically modified foods, which threaten irreversible 'genetic pollution'.
The South
In the South, development generally focuses on producing food, raw materials and manufactured goods for export. Land, mineral and timber rights are sold to foreign corporations at a fraction of their true worth, leading to widespread deforestation and pollution.
Foreign aid and investment also promote an infrastructure based on oil, gas and coal- despite the fact that the majority of the South could provide all its energy from renewable sources for a fraction of the ecological, cultural and economic cost of fossil fuels
One of the most common arguments in support of increased trade is that it will bring investment and therefore wealth to the South. But all the indicators suggest the exact opposite. Since 1950, there has been an 11-fold increase in world trade, yet in its 1998 Annual Report the United Nations Development Programme (UNDP) reported that the gap between rich and poor countries continues to grow.
The 225 richest individuals in the world now have assets greater than the annual income of 2.5 billion people, or 47% of the world's population.
Every year, millions of people are pulled off the land by the promise of a job in the modern sector, only to find themselves in vast urban slums, unable to meet even their most basic needs. They lose their sense of culture, identity and self-worth; a breeding ground is created for crime, violence and social unrest.
Democracy
Increasingly, national policy is being determined by global economic institutions. We still have the right to vote, but the people we are voting for are often powerless to act on our behalf. Power rests more and more with bodies such as the OECD, WTO, NAFTA and the EU, all of which in turn have shown themselves to be heavily influenced by corporations.
Companies can use these treaties to over-rule governments. For example, in the summer of 1998, the American Ethyl Corporation used NAFTA to force the Canadian government to reverse its ban on the petrol additive MMT, which Canada had tried to ban on health grounds. "The nation state is not dead", says the head of the huge Kobe Steel Corporation in Japan, "but it's being quickly retired."
Community
The cultural impact of globalisation is equally devastating.
As the world economy becomes ever more centralised, rural areas are being marginalised and diverse cultures are being lost. Able to enter countries at will and destroy local competition by spending millions on advertising, multinationals are creating a global consumer monoculture.
In the North, transport networks are geared more and more to linking major cities, rarely serving small towns and villages. Out-of-town supermarkets undercut local traders, starve town centre trade, and force shops, post offices and markets out of business. Local shopping areas, which only a decade ago bustled with activity, have become ghost towns.
As the local economy collapses, so too does any real sense of community. The mutual dependence upon which villages and towns used to be based, and to some extent still are based in the less industrialised parts of the world, gives way to increasingly anonymous individualism. Families split up in the search for work, leading to the breakdown of the family. Homogenised television programmes, which reinforce the consumer culture, become the primary source of entertainment. Today, the Spice Girls are as well known in Outer Mongolia as they are in London.
Reversing the Trend
All over the world, there is a growing awareness of the destruction being caused by globalisation. A powerful movement is developing, involving members of the public, sympathetic politicians, religious bodies and environmental pressure groups. People have begun to realise that globalisation can be effectively challenged-and they are taking action, both in the form of resistance and renewal.
Resistance ...
Our political representatives are being put under increasing pressure to renegotiate existing trade treaties and draft new agreements. In the United States, 'Fast Track' for trade negotiations was rejected as a result of public unease. The MAI has twice been halted because of pressure exerted on governments by grassroots groups.
Prominent financiers and politicians are beginning to question the free market. Global financier George Soros now admits that "the global capitalist system is coming apart at the seams", while French Prime Minister Lionel Jospin argues that "it is structurally weak"
In India, half a million farmers demonstrated against the GATT agreement. The Via Campesina movement now links farmers across the world as they struggle to protect their rights.
In the UK, farmers are beginning to challenge the big corporate buyers, while supermarkets are finding development increasingly difficult because of objections from a more informed public. Motivated by concern over food safety, many consumers are now demanding local organic produce.
... and renewal
As the impact of globalisation becomes ever more apparent, grassroots groups are developing ways to rebuild their communities and re-localise the economy. These groups seek to foster a framework that encourages national and local enterprises: businesses that will "site here and sell here", keeping both jobs and money in the community. Initiatives range from local food networks and local currency schemes to the regional production of renewable energy.
Seeds of Hope
'Community Supported Agriculture' provides a direct link between farmers and consumers. In so doing, it reduces wasteful packaging and transportation, increases local employment and promotes biological diversity. More than 40,000 families in the UK now get a regular 'vegetable box' from a local farm. In the US, there are 2,400 registered farmers' markets, with a combined turnover of billions of dollars.
Local Exchange Trading Systems (LETS) allow goods and services to be exchanged without the need for money. There are already 400 LETS schemes in the UK alone
Local currencies enable a community to reduce its reliance upon the national (and international) economy. In the American town of Ithaca, the local currency 'Ithaca Hours' is accepted by more than 250 local businesses
Supporting the global, locally
At first glance, supporting our local shops and our local economy might appear to ignore the plight of people on the other side of the world. For a long time now we have been told that one of the best ways to help people in the Third World is to buy their products. However, the reality is that many people in the South have ended up producing for us instead of for themselves - thereby becoming dependent on a global market over which they have absolutely no control. If we in the industrialised world can become more self-reliant, we will allow people in the South to concentrate on producing more for themselves.
Strengthening local economies on both sides of the world-especially in the provision of basic needs-does not mean eliminating trade, but rather finding a better balance between international trade and local production"
A report from the International Society for Ecology and Culture at website: http://www.oneworld.org/
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Last updated October 7, 2000