Nobel laureate Joseph Stiglitz has made radical proposals for global economic reform - but has been ignored
The worldwide economic crisis and its human consequences are a direct result of the free-market model of globalisation that has been pursued by the World Trade Organisation, World Bank and International Monetary Fund, as well as the rich
countries’ governments that control them. Multinational corporations have seen their profits rise astronomically, thanks to the new freedoms they have won under this system of globalisation. Ordinary people have seen their livelihoods lost or threatened, along with planned cuts in public services. Hundreds of millions of human beings have been condemned to poverty.
But the crisis provided a unique opportunity for change. The United Nations has made efforts to create an inclusive and far-reaching response. At a summit last June, the UN attempted to bring all 192 countries together to take fair and effective decisions on the future of the world economy. A commission, chaired by Nobel laureate Joseph Stiglitz, devised a series of radical proposals for global economic reform. Sadly, the British Government and those of other wealthy nations sought to weaken and then downplay the UN response to the crisis. British Prime Minister Gordon Brown did not even go to the UN summit, preferring instead to attend the elite club of the G8 in Italy the following month.
Rather than building a just economic architecture in response to the meltdown, the financial crisis has been seized on by rich countries as a desperate excuse to revive the failed global institutions of the IMF, World Bank and WTO.
In talks about the crisis, the G20 made clear its intention to conclude the WTO’s Doha round of world trade talks by the end of 2010. The poorest countries would suffer considerable losses as a result of the proposed agreement. The deal currently on the table would mostly benefit the world’s richest countries, as well as certain export sectors in powerful developing nations. Countries in sub-Saharan Africa look set to lose out, as do other states, such as Bangladesh, that would see their existing trade preferences eroded.
However, while the wealthy nations continue to promote the WTO, the fact is that its future as a credible institution is hanging in the balance and there are growing calls for the talks to be abandoned altogether. When the WTO ministerial conference was held in Geneva in December last year, the WTO secretariat was at pains to downplay its significance. The organisation is close to sliding into irrelevance.
This is not the first time the WTO has failed to take its agenda forward. Talks have collapsed again and again. While the European Union and the United States have pressed developing countries to open their industrial and services sectors to foreign imports – at the same time refusing to reduce their own agricultural subsidies in real terms – developing countries have banded together to fight off the worst EU and American aggression.
The voices opposing the deal are gathering strength. The international trade union movement has called on all the WTO’s member governments not to sign the deal currently on the table, in view of its potential devastating impact on their industrial and manufacturing sectors.
Finance specialists are also urging the immediate suspension of the WTO’s financial services negotiations. These talks aim to further liberalise and deregulate financial markets, despite the fact that such liberalisation is widely agreed to have been a primary cause of the present crisis.
The international farmers’ movement has called for a complete end to the WTO’s agricultural negotiations, which threaten
rural development and the livelihoods of small-scale farmers throughout the world.
However, faced with the repeated collapse of the Doha round, the EU has turned to bilateral trade agreements – with easier opportunities to bully trading partners – in order to obtain increased market access for European companies.
In 2006, the EU adopted a new trade strategy, “Global Europe – competing in the world”. This is explicitly designed to meet the interests of European companies, prising open new markets for their exports, securing unrestricted access to the natural resources of the developing world and eliminating local laws that block corporate expansion. The EU aims to use its new generation of bilateral trade deals to open up new areas of emerging economies, despite the fact that developing countries at the WTO specifically rejected this expansion of trade rules into new areas.
If we are ever to address the global crises before it is too late, we will have to harness the creativity, energy and political power of ordinary people. That cannot mean more free-market ideology, consumption and competition. It must mean inclusive democracy, with oversight by civil society and participation and co-operation by everyone. We still have time to tackle the widening gulf between global politics and the needs of people and planet – but it is fast running out.
