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22 October 2001


A plan for the world - Exclusion

By Noreena Hertz

What we want

  • An independent international commission to investigate the impact of economic globalisation
  • A World Social Organisation as a counterweight to the World Trade Organisation
  • Global indirect taxation on pollution and the use of resources to provide funds for redistribution
  • Legislation to make parent companies accountable for actions of overseas subsidiaries
  • A global legal aid fund to give all workers and communities access to justice
  • We live increasingly in a world of haves and have-nots, of gated communities next to ghettos, of extreme poverty and unbelievable riches. Some enjoy rights that are completely denied to others. Relative inequalities are exploding, and the world’s poorest, despite all the advances of globalisation, may even be getting poorer.

    It is a world of extremes, which can be characterised most clearly in terms of exclusion. That means political exclusion, whereby the rights of citizens are marginalised by the interests of big business: George W Bush’s environmental policy, for example, is clearly formulated in the interests of US energy companies. It means economic exclusion: in almost every developing country, the numbers living on less than a dollar a day have increased in the past 20 years. And it means social exclusion, which prevents billions from gaining redress for injustices: Brazilian tobacco workers, for example, are poisoned by outlawed pesticides, but they have no hope of compensation, let alone an improvement in their working conditions.

    These issues must be addressed, not only for the sake of the two million and more children each year who die of diarrhoea for lack of clean water, but for our own sakes. If they are not addressed, a growing movement of people will make even our gated communities impossible to protect.

    We must embrace a new agenda based on inclusiveness; a commitment to reconnecting the social and the economic; a relinking of the latter to a plausible redistributive system; and a determination to ensure that everyone has access to justice. All these things are within our reach.

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    First, an international independent commission should investigate the impact of economic globalisation. This should be transparent and open. It should involve representatives of the south as well as the north, the poor as well as the rich. It should ask: what is the impact of trade liberalisation on the global poor? What is the cost of economic growth to the environment? What price do we pay for allowing big business to influence the rules on the quality of our air and food? How do we justify allowing the north to protect industries such as agriculture and textiles while the south is told to open up all its markets? What are the implications for society when rural communities collapse overnight; or for farmers when corporations patent indigenous plants?

    We do not know the answers to all these questions. Much of the research is confined to aggregate economic data; figures of rising GDP tell us nothing about who gains and who loses. And there is no public forum in which these issues can be rigorously examined. Now, more than ever, we need to confront the beliefs of the market fundamentalists away from the streets.

    Second, we must create a World Social Organisation, to reframe market mechanisms in rules and regulations that ensure that the costs of, for example, pollution and human rights abuses are factored in to all economic activity. This organisation needs teeth as sharp as those of the WTO, and equally effective powers of enforcement.

    If we allow trade interests to continue to dominate, we shall never reconnect the social with the economic. We shall perpetuate a system that too often puts the interests of big business before people, and profit before social or environmental justice. But we must be careful that the north does not use this new organisation as a form of protectionism. The developed world should help developing countries with the costs of better global regulation; and, in the short term at least, the south should meet different requirements.

    There still remains the problem of alleviating the positions of those who are most excluded and marginalised. At the least, this means the cancellation of debt, reversing the outflows of capital from the south to the north. Overseas aid, which to the least developed countries has fallen 45 per cent in real terms since 1990, must be significantly increased, while the ways in which it is delivered must be rethought.

    But we also need new resources to give people access to better lives. These can be raised only by a global tax authority, which would raise global indirect taxes – on the use of energy and resources and on pollution – and then redistribute them.

    Finally, we need mechanisms to help people fight against injustice. All people, wherever they are, must be extended the rights we take for granted: minimum health and safety standards, minimum wages, protection from being dispossessed without adequate compensation.

    In the long term, this involves strengthening the local and international regulation of companies and making enforcement effective. But governments of countries in which multinationals are domiciled can take steps now. In several test cases, companies are being sued in the north for actions carried out by their subsidiaries in the south. They include Unocal, being sued in the US in connection with its activities in Burma; and Cape, being sued in the UK in connection with its activities in South Africa. But this means of redress is usually blocked on two fronts. First, it is very seldom possible to lift the corporate veil and make parent companies accountable for the actions of their subsidiaries. Second, even when this is done, there are usually no funds available for workers or communities to take on wealthy multinationals.

    So, to ensure that the perpetrators of corporate crimes can be held to account, wherever they are, and to ensure that their victims have redress, whoever they are, we need two things. First, we need legislation so that parent companies can be held responsible for the actions of their subsidiaries. Second, we need a global legal aid fund so that workers and communities everywhere get access to justice.

    A tall order? Perhaps; but after 11 September, it is clearer than ever that our divided world cannot continue as it is. Terrorism and trade cannot be the only issues on which the world unites. We must commit ourselves to a global coalition to deal with exclusion, too.

    Noreena Hertz is the author of The Silent Takeover (Heinemann, £12.99)

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