Info Service on UN Sustainable Development (Jun14/03)
26 June 2014
Third World Network
debate globalisation and inequality
Published in SUNS #7831 dated 26 June 2014
25 Jun (Kanaga Raja) -- Political will and political power and sustainable
policies at national level as well as national policy space and fair
international trade, money and finance systems are essential to tackle
poverty and inequality, according to experts at an eminent panel discussion
at the UN Conference on Trade and Development (UNCTAD) last week.
The experts on the panel were discussing best policy practices for
tackling poverty and inequality on the road to achieving sustainable
The discussion took place in a round-table session on 19 June, during
UNCTAD's two-day Public Symposium (18-19 June), which this year coincided
with UNCTAD's own fiftieth anniversary celebrations.
Among the discussants were Mr Rubens Ricupero, a former UNCTAD Secretary-General;
Mr Martin Khor, the Executive Director of the South Centre; Ms Deborah
James, Director of International Programmes at the Center for Economic
and Policy Research (CEPR); Mr Roberto Bissio, Global Coordinator
of the Social Watch Network; and Mr Zhongxiu Zhao, Vice-President
of the University of International Business and Economics.
The session was moderated by Mr Shawn Donnan, World Trade Editor of
the Financial Times, who began by saying that what is being dealt
with is a really fundamental and huge subject, which is globalisation
What is being talked about is a huge problem at an important moment,
he reiterated, pointing for instance to what he called ‘the fragile
middle' -- about 2.8 billion people in the world living on between
$2 and $10 a day, who are technically above the poverty line but who
are still struggling in the world today.
Referring to the issue of inequality and poverty reduction, Rubens
Ricupero was of the view that everybody agrees that Latin America,
in general, and Brazil in particular have been moving in the right
direction, and in the opposite direction of many countries including
developing countries that have seen inequality worsening and poverty
coming back again, sometimes in force.
He underlined the fact that in order to fight poverty and reduce inequality,
the first condition is political power and political will. Western
societies only got rid of the most extreme forms of poverty when they
decided that it was their utmost priority to do so, he said.
"And that is what we have been seeing in inequality in the current
debate ... We all know that in the US, for instance, it is politics;
it was the political choices made by the group that captured power"
that explained this unfortunate evolution.
They decided to make the country safer for the very rich and tougher
for the very poor, said Ricupero, noting that this is a political
problem that has to be settled at the political level.
In Latin America, and particularly in Brazil, he said, "perhaps
we have too much of political power, too much of political will. Is
it possible to say that we could have too much of a good thing? Indeed
it is. In our case (in Brazil), there was, after the military withdrew,
a sort of new social compact to finally address a centuries-old history
of slavery, of inequality, [and] of extreme poverty."
And Brazil did it in a very short time, he said, and in about 20 years,
more than 50 million people were lifted up from the most abject forms
While inequality is still a problem, Brazil is moving in a determined
way to reduce it, Ricupero underlined, noting that Brazil is one of
the few countries in the world where inequality is actually falling.
But as always, the problem now is "to ask ourselves whether it
will be sustainable in the middle and long term", he remarked,
stressing that his main message is that in order to make the fight
against poverty and inequality sustainable, "we have to balance
political will with a good mix of sound policies."
In Brazil's case, for instance, he said there was ‘some exaggeration'
in terms of cash transfers, in terms of direct cash payments to families.
In the last twelve years, it is estimated that a staggering 84% of
the increase in public cost and expenditure went into cash transfers,
The consequence of this is that "we have very little money left
for infrastructure. There has been an enormous boom in consumption
and credit - those are good things, but there has been a clear sacrifice
in savings and investment, with the economy coming to a halt,"
he said, adding that this means that in the long-term it will no longer
be sustainable in terms of the progress that has been achieved so
According to Ricupero, in the very long-term, what (Nobel laureate)
Paul Krugman has said and is often quoted, is true -- ‘productivity
may not be the only thing, but it's almost the only thing' and that
at some point ‘we have to invest in human capital, on education and
on the capacity to make people more productive with less cash transfers
Ricupero emphasised that one of the useful points of this discussion
would be to try to come up with ideas that would make the fight against
poverty and inequality a long-term sustainable goal.
Martin Khor, the Executive Director of the South Centre, pointed out
that there is acute poverty due to natural disasters, civil wars and
so on, and that these kinds of causes require humanitarian assistance,
but there isn't enough of that.
"Secondly, we have in many countries poverty which in the past
was due to low commodity prices. This led some countries into external
debt crises," he said.
According to Khor, the solutions offered by the international financial
institutions were often the wrong ones, with the wrong conditionalities.
And this led these countries into two or three lost decades because
they continued to be in poverty, especially if one compares them to
developing countries that did not suffer a debt crisis and did not
go through structural adjustment policies.
When he is often asked why East Asia did better than Africa, Khor
said, "I tell my African friends (that) it's not due to more
corruption in Africa or more tyranny in Africa - we have this all
over the world - it's due to the fact that we (East Asia) didn't fall
into the wrong policies of the IMF and World Bank and we were able
to institute a lot of policies which they (Africa) were not allowed
So, on the global transformation side, if countries fall into debt,
they need to have debt relief upfront or an international debt resolution
mechanism. There is also need for reforms of the international debt
system as well as reforms in the conditionalities of loans.
Today, said Khor, the big debate is also on the conditionality of
loans to the European countries who have gone to the IMF or the European
But on the larger issue of (moving) from poverty to sustained development,
Khor said that at the national level one could have short-term and
quite successful policy of cash injection to the poor. And this is
now being carried out by an increasing number of countries led by
Brazil with its Zero Hunger programme and so on.
Citing what Ricupero had said earlier about cash transfers, Khor asserted
that this may not be financially sustainable unless one has sustained
economic growth, especially (contributing) to government revenues
that can then sustain a social programme.
Referring to sustainable development strategies and policies, he asked
firstly, how to obtain more revenues from existing commodities, including
minerals. "I think this is a very important area."
Khor posed several other questions: How to have better benefit-sharing
with the TNCs that extract the natural resources? How to keep the
commodity prices up rather than down, because it is the low commodity
prices that have led many developing countries into poverty and which
also led to the formation of UNCTAD itself? How to diversify away
from commodities or among commodities and add value to the commodities
through processing and manufacturing?
He recalled one incident, whereby, "I remember the Minister of
Commodities in Malaysia telling me that if we (Malaysia) exported
one cubic metre of raw wood versus the same cubic metre converted
into furniture, we would get seven times more revenue (from furniture)
- more value-added - and that is why we went into furniture export."
The role of the State is very important in the provision of loans
and subsidies, and in infrastructure, as well as active promotion
of commodity-diversification and upgrading into manufactures, said
He also pointed to the need for a stable currency, saying that unstable
currencies led to crisis in many developing countries, and this requires
a reform in the international monetary and financial system, which
has not come about yet.
This is the global transformation that is needed, stressed Khor, adding
that capital flows will also need to be stable. There can't be huge
inflows and outflows of capital which makes it very difficult for
a country to remain stable in terms of its real economy.
There is need for policy space to be able to carry out all these strategies,
he said, further underlining the need to have the correct trade rules.
"We have rules in the WTO in relation to subsidies, TRIMs [trade-related
investment measures] and so on that make it difficult, or even impossible,
for many developing countries to institute the kind of policies that
successful developed countries, or successful developing countries,
were able to have in the pre-subsidy agreement and the pre-TRIMs agreement
Khor said: "We need developed countries to cooperate by not instituting
policies that are detrimental to developing countries, for example,
high agricultural subsidies which enable them to export food at very
cheap prices to developing countries, which because of lowered tariffs
due to structural adjustment, force these poor developing countries
to import food, which is less efficient (and) therefore displacing
their more efficient farmers."
There is also need to re-examine the free trade agreements that ask
developing countries to lower their tariffs to zero for almost all
products even as agricultural subsidies remain in the developed countries,
and this will make it very difficult for them to escape from poverty
and into sustained development.
There is need to look at investment rules that many countries are
now finding to be a real burden because it constrains their ability
to have regulations, and the fact that they could be brought to court
in a very unfair arbitration system.
"We need to have environmental policies that are sound or rather
development policies that are environmentally sound, otherwise the
base for future development is gone. And we need to have a development
agenda post-2015 that has the right Sustainable Development Goals
but also go beyond the goals and targets framework," Khor concluded.
Zhao, the Vice-President of the University of International Business
and Economics, highlighted China's past experiences in using trade
to promote development and to reduce poverty in the country. He pointed
out that trade absorbed over 100 million people from the rural areas
and that this process is still continuing.
Roberto Bissio, the Global Coordinator of Social Watch, talked about
best practices relating to poverty and inequality in his country Uruguay.
He said that after the financial crisis of 2002 with the terrible
impact that it had, Uruguay was in a situation not very different
from that of Greece or Spain today. But from 2005 onwards, cash transfer
programmes were immediately started by the government to address the
issue of poverty.
However, they were conceived as an emergency measure much like humanitarian
assistance, and what was done was to institute mandatory collective
bargaining, which resulted in the doubling of unions, which in turn
resulted in the salaries of workers growing in real terms, thus recovering
In addition, he said, the minimum wage was doubled and all workers,
including domestic and rural workers, were formalised. Maternity and
paternity leave, universal health insurance and income tax were also
On top of that, a non-economic agenda of more rights was undertaken,
said Bissio, such as women having the right to decide on the number
of children they want to have, people having the right to marry whomever
they wish to marry, the right to chose one's gender, etc.
All these policies led to poverty reduction and less inequality, and
investments grew in enormous proportions, contrary to theories on
the need to constrain workers' rights and so on in order to attract
investment. In fact, there was growth in both national and foreign
However, said Bissio, inequality between countries is a more complicated
issue, because it does not depend on a country's internal policies.
In an apparent reference to a recent decision by the US Supreme Court
to reject an appeal by Argentina and thus allowing to stand a lower-court
decision concerning its foreign debt, Bissio said: "We are facing
a situation in the world today where sovereign country decisions about,
for example, your own debt are taken by the Supreme Court of the US."
"And we would like to avoid the Supreme Court of the US judging
over Argentina's foreign debt in a way that will lead the country
to default, most likely, although they are desperately trying not
to," he said, cautioning that this will also pull Uruguay ‘down
Pointing out that many other Latin American economies will also suffer
as a result of this decision, he noted that even the IMF is now saying
that debt restructuring cannot be done anymore if such a stand is
He recalled that at the UNCTAD-XI Conference in Sao Paulo in 2004,
Ricupero had warned developing countries against joining the path
of financial liberalisation.
According to Bissio, Ricupero had said at that time that ‘this is
like joining the Mafia - you are attracted by a lot of promises and
all the benefits that you are going to get in terms of money, power,
women, whatever but after a while you realise that maybe it was not
a good decision, (and) you cannot send a resignation letter.'
And that is what is happening to many countries now which are bound
by Bilateral Investment Treaties (BITs) etc, said Bissio, adding that
UNCTAD and the international system need to start thinking of an international
witness protection programme for countries that want to get out of
this system, as well as for countries that now want to revise their
Deborah James of CEPR said that a lot of the strategies that the US
actually employed in its development when it was looking at a per
capita income of $5,000, has been made unavailable now for developing
countries, and "we feel that this is one of the roots of the
current inequality between countries."
Referring to the issue of services, she was of the view that everyone
would agree that for poverty reduction, there is a pretty well-established
global consensus about achieving universal access to essential public
services such as healthcare, education, and access to water and sustainable
Unfortunately, she said, both in the GATS and the proposed TISA (Trade
in Services Agreement), this would really restrict a lot of the policy
space, particularly around regulation of public services guarantees
as well as access to foreign companies coming in to provide those
According to James, some of the best practices that were used by the
current industrialised countries such as the strategic deployment
of tariffs on certain industries to promote their development are
restricted by the current global trade rules.
This obviously needs to be changed if countries are going to have
the policy space to act on industrial policy and create jobs, she
further said, adding that in terms of IP (intellectual property) rules,
there is an actual overvaluing of certain types of labour such as
intellectual labour and an undervaluing of other types of labour,
such as people working in manufacturing plants.
She also referred to central bank policy, which she said has been
most destructive in the last five years.
She said: "We have seen a situation where in the global economic
crisis, the mandate of the European Central Bank has been exclusively
focused on inflation and prices and has not taken its mandate on jobs
and growth seriously. And because of that, we have tens of millions
of people in Europe who are out of work and we have the depression
of global aggregate demand as a result, that affects everybody around
the world." +
United Nations: EU aims to scuttle treaty on human rights abuses
New York, 24 Jun (IPS/Thalif Deen) -- When the United Nations began
negotiating a Code of Conduct for Transnational Corporations (TNCs)
back in the 1970s, the proposal never got off the ground because of
vigorous opposition both from the powerful business community and
its Western allies.
But a move to resurrect this proposal - through the creation of a
new international legally-binding treaty to hold TNCs accountable
for human rights abuses - has been gathering momentum at the current
session of the UN Human Rights Council (UNHRC) in Geneva, which concludes
Still, it has triggered the same political replay of the 1970s: strong
opposition from business interests and Western nations, this time
specifically the 28-member European Union (EU).
Jens Martens, director of the Global Policy Forum Europe, told IPS
there is a heated debate in the UNHRC about establishing an intergovernmental
working group to negotiate the proposed legally binding instrument
"So, the current discussion is not about the substance of a code
of conduct or treaty but on the process," he added.
There are currently two draft resolutions tabled at the UNHRC session
in Geneva: one sponsored by Ecuador and South Africa asking the UNHRC
to establish an intergovernmental working group: a proposal supported
by developing nations of the Group of 77 (G77) and a coalition of
more than 500 non-governmental organisations (NGOs).
A second draft resolution, sponsored by Norway, Russia, Argentina
and Ghana, supports the existing working group on business and human
rights and asks for extending its mandate by another three years:
a draft also supported, among others, by the United States and the
Martens, who co-authored a recent study on "Corporate Influence
on the Business and Human Rights Agenda of the United Nations,"
said "corporate actors have been extremely successful in implementing
public relations strategies that have helped to present business enterprises
as good corporate citizens."
He said they have also given the impression of "seeking dialogue
with governments, the United Nations and decent concerned stakeholders,
and able to implement environment, social and human rights standards
through voluntary Corporate Social Responsibility (CSR) initiatives."
Martens said the UN's much-ballyhooed Global Compact and the UN's
Guiding Principles on Business and Human Rights became prime examples
of an allegedly pragmatic approach based on consensus, dialogue and
partnership with the corporate sector in contrast to regulatory approaches
to hold corporations accountable.
Alberto Villarreal, trade and investment campaigner at Friends of
the Earth Uruguay, told IPS that by recognising environmental activism
in all its expressions as a legitimate defence of human rights, "we
can contribute to the struggle of environmental rights defenders and
keep them safe."
The London-based Global Exchange, an international human rights organisation,
has put out a list of the "top 10 corporate criminals",
accusing them of being complicit in violations of human rights and
The companies identified include Shell/Royal Dutch Petroleum, Nike,
Blackwater International, Syngenta, Barrick Gold and Nestle.
The charges include unlivable working conditions for factory workers,
lack of worker's rights, pollution, child labour, toxic dumping, unfair
labour practices, discrimination, and destruction of indigenous lands
for mining and oil exploration.
Anne van Schaik, accountable finance campaigner at Friends of the
Earth Europe, said many countries support tabling a resolution for
a binding treaty, but the EU has warned that if it gets adopted it
will refuse to discuss it.
"The EU is therefore effectively boycotting the UNHRC and standing
up for corporate interests instead of human rights," she added.
Asked if there would be a decision at the current UNHRC session, Schaik
told IPS, "We are unsure if this issue will be resolved on Friday."
She said the EU's "very obstructive approach" means it will
not participate in the intergovernmental process of creating a treaty
if the resolution is in fact adopted, "thereby effectively undermining
the democratic decision- making process at the United Nations."
Schaik said the Norwegian resolution states that there should be a
discussion on the issue of access to remedy, judicial and non-judicial,
for victims of business-related human rights abuses on the agenda
of the Forum of Businesses and Human Rights.
Effectively that means that at this week's session, there will be
a discussion, but there are no consequences or follow-up plans for
what happens after that, she added.
Schaik said Ecuador proposes to "establish an open-ended intergovernmental
working group with the mandate to elaborate an international legally
binding instrument on Transnational Corporations and Other Business
Enterprises with respect to human rights."
This means there will be a new instrument which will state obligations
for transnational companies, which is obviously much more far reaching
than a discussion at a forum at the United Nations, she said.
The study on the human rights treaty, co-authored by Martens, focuses
specifically on the responses by TNCs and their leading interest groups
to the various UN initiatives, specifies the key actors and their
objectives. It also highlights the interplay between business demands
and the evolution of the regulatory debates at the United Nations.
The study provides an indication of the degree of influence that corporate
actors exert and their ability, in cooperation with some powerful
UN member states, to prevent international binding rules for TNCs
at the United Nations.
Meanwhile, the Paris-based Reporters Without Borders has urged the
UNHRC to promote the adoption of clear and binding rules on online
surveillance and censorship. "Businesses sell technology to authoritarian
regimes that allows them to carry out large-scale online surveillance
of their population," the group said.
In a statement released this week, the Paris-based organisation said
this technology has been, and still is, used in Libya, Egypt, Morocco
and Ethiopia to arrest, imprison and torture. The companies that provide
this technology cannot claim to be unaware of this, it added.