The institutions have forced debtor countries to cut social spending on health, education, and other public services. They have pressured poor nations to charge their own citizens for the use of public schools and public hospitals. And they have demanded that countries keep their wage levels low, a policy which harms ordinary citizens but benefits multinational corporations.
The United States and Europe were instrumental in building the post-war economic system, including the GATT. They were a main driving force behind no less than eight major rounds of trade negotiations - including the successful Uruguay Round and the creation of the WTO. When America and Europe share a common purpose, the system can move forward. When they clash, there is inertia. The political importance that countries now attach to this system, and their growing reliance on open world markets and international trade is because they believe that history states this is how they get more jobs and income. It is also a reflection of the pressing need to coordinate and reinvent policies for an integrated world.
The General Agreement on Tariffs and Trade emerged after World War Two in 1947 with the aim to establish a stable, multilateral economic order. The World Trade Organisation was established under patronage of GATT. Upon ratification of the Round’s Final Act by members, the World Trade Organisation replaced GATT as the global multilateral trade organisation. The WTO summits tries to cover a wide number of issues such as agriculture, labour Rights, electronic commerce, reforming the WTO, environment, tariffs and business. Recent protests against the IMF and the World Bank have shined a harsh spotlight on the way the institutions put the interests of wealthy corporations in the developed world above the interests of the world's poor majority.
Created after World War II to help avoid Great Depression-like economic disasters, the World Bank and the IMF are the world's largest public lenders, with the Bank managing over $200 billion and the Fund supplying member governments with money to overcome short-term credit crunches. But the Bank and the Fund are thought of by the Seattle protesters to be the world's biggest loan sharks.
The number and diversity of interests is also larger. No longer a small club of industrialized countries, the WTO is a global system of 135 members - with China, Russia, and 29 other economies queuing to join. “There may have been 100,000 protestors outside the conference centre but there are 1.5 billion people wanting to join our organization” (WTO website). They all have a stake in how the trade system evolves. All of this is taking place in the glare of world opinion - and against the backdrop of a profound debate about trade, globalisation and interdependence. We have not enjoyed such employment levels, low interest rates and deficits for a generation but there is more anxiety about job security than ever.
No one seriously believes that trade, investment, and technology can be, or should be, reversed. We cannot undo technological development such as the Internet or telemedicine but we can protect infant democracies. It is seriously argued that Western democracies in the developed world owe developing countries the right to protectionist measures to help them grow. This is one of the key reasons for the protests, for it seems that the WTO and other financial meeting are protecting Western Europe and especially the USA by enforcing free market measures such as no barriers to trade (even though when their economies were weaker they used barriers to entry to protect their economies).
To understand fully why the protesters are against globalisation we need to understand what globalisation means. Globalisation is the emergence of the global communications industry, the growth of multinational enterprises, global finance and its markets and the social ideology of cross border relationships including the idea of a free market. Pro-globalists such as people and governments that back the WTO believe strongly in the free market as the only way forward and that trade in all its forms need to be internationalised. They believe that globalisation has a knock-on effect throughout the world and its social classes (a trickle-down effect) and that prosperity for corporations would benefit everyone. Trickle-down is an important idea that explains the reasons why so many governments are behind the policies of the WTO, World Bank and the IMF. It is the belief that all citizens will gain from economic growth, even if the initial distribution of its benefits is highly unequal. The spending power of those who enjoy the increased incomes, is argues to generate employment and income elsewhere in the global economy. This is clearly a matter of opinion for the wealth that is accumulated in my opinion stays in the West.
The attitude of trickle-down and other is reflected in western polices and does not take account of the negative aspects of globalisation. These negative attributes of globalisation are the main reasons for the protests. These include the belief that globalisation deepens and widens inequality (especially American corporations growing at the expense of the developing world). The preoccupation of the modern democratic world with reducing costs and overheads compete downwards, there is super exploitation going on through companies such as Nike, Gap and McDonalds. There is the belief that globalisation in a democratic world order is not what is desired or aimed for, despite what the original members of GATT stated but “US-isation” with the believe that countries such as Britain are now merely satellites of the USA.
One key question that I need to address is why the people involved in the protests felt that this was their only option. Who were the protesters and why was this their method of getting their voice heard? The protestors at Seattle were not people from the Brazilian rainforest or the slums of Calcutta but politically active people in places like Europe. There were charitable organisations such as Oxfam and CAFOD involved; there were extreme political groups, environmentalists, anarchists as well as people who joined the protest just to create trouble. Even with the minority of trouble-makers the majority were organisations that wanted to make a difference and change the WTO and the IMF to help the world as a whole, especially the less economically developed countries and the environment of the world as a whole.
These groups feel they cannot get anything done through their own governments. This is probably due to the fact that globalisation and such issues are not an important issue on a local level; they would not be elect-able issues for MPs in Britain. Even if an individual government wanted to help change the policies of the WTO could they actually do anything themselves. Individual government cannot do anything; they cannot easily change things, as the WTO is one of many of these unaccountable organisations. People at the grassroots can’t do anything. The structural impotence in these organisations that are constructed makes it difficult for one or a few countries to change them. If you look at the New Deli group you can see the “3rd world” tried to band together to make changes.
“The allegedly unstoppable force of globalisation just hit the immovable object called grass-roots democracy” is a quote from Lori Wallach, director of Public Citizen’s Global Trade Watch. This idea has given groups the power and desire to band together to create change the only way they know how, through active protest. Instead of addressing protesters' concerns, the only thing the WTO seems to have learned is to hold meetings in countries that ban public protests altogether," said Roth of the website Corp Watch. This was the case in Quatar where the WTO held their last summit meeting. They did not give out visas to protesters and actually were able to made headways.
The Bank and the Fund have severed that chain of accountability by making national leaders more concerned with the interests of international investors than with the needs of their own people. In Haiti and Mexico, the Fund and the Bank have actively worked to keep wages low, making it more difficult for ordinary citizens to support themselves. Throughout Africa, the IMF's and World Bank's imposition of "user fees" for health services and the institutions' resistance to meaningful debt relief have worsened the AIDS crisis on that continent. The US and the other wealthy nations that enjoy de facto control over the institutions to call for the abolition of the IMF and the World Bank and to begin work to create multilateral financial institutions that are truly committed to human rights and democracy and which can effectively respond to the new realities of the 21st century.
What has happened in Seattle and elsewhere is a very overt manifestation of a whole series of gaps. From the gap between the rich and the poor nations to the gap between those who believe that global companies bring prosperity and those who believe they bring a form of economic colonialism. The gap between the people who run the international institutions and those who have to live with their decisions. The gap between national politicians and the people in their countries who are concerned with what is happening outside their national boundaries. The gap between company directors who will move jobs to the lowest waged country and the trade union leaders in western countries who see complete industries dying in their country. Each of these gaps must be filled in a different way but unless we do fill them then the consequences for all countries will be very serious.
Bibliography
Tabb, W- ‘After Seattle: Understanding the Politics of Globalisation’ Monthly Review 51, (2000).
St Clair, J- ‘Seattle Diary’ New Left Review 238 (1999).
Waters, M- Key Ideas of Globalisation. Routledge, London. (1998).
BusinessWeek- (European Edition)- 12th Nov 2001. 8th Oct 2001
The Economist- Millennium special edition. 1st Jan 2000.
Cramp, P- Economic Development. Anforme (1998)
Baylis, J and Smith, S (Eds) – The Globalisation of World Politics. (1997).
McLean, I- Oxford Concise Dictionary of Politics. Oxford. (1996)
(Corp Watch)
(WTO site)
