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18 September 2000

How to help the wretched of the Earth

Globalisation - Both supporters and critics of globalisation see it as a triumph for market forces.

By Clare Short

While the term globalisation has become ubiquitous, there is no agreed definition of its meaning. And that partly explains the passion and fury of so much of the public debate. For some – and this includes both supporters and critics – globalisation is nothing more than neoliberalism writ large. They see globalisation as synonymous with unleashing market forces, minimising the role of the state and letting inequality rip. Supporters of this failed monetarist agenda laud globalisation as the instrument of their victory. Critics – including many of the demonstrators expected at the World Bank/International Monetary Fund meetings in Prague later this month – denounce it as a source of global exploitation, poverty and inequality.

I reject both positions. For me, globalisation is not just about increased trade and mobility of capital, but also about the growing internationalisation of our culture and values. In this sense, globalisation is here to stay. The political challenge is to manage it well. During industrialisation, the challenge of progressive politics was to ensure that the wealth created was fairly shared, and that all people had access to education, healthcare, decent housing and a reasonable income. Today, the challenge is to help manage globalisation so that it works for all, including the world’s poor.

This is the focus of the British government’s white paper on globalisation and development, which will be published in November. It will cover a very wide range of issues, but here I want to touch on just three: trade; education and information technology; and the reform of the international financial institutions, particularly the World Bank and the IMF.

First, trade. While the failure of last year’s World Trade Organisation meeting in Seattle was a serious setback, it would be a great mistake for the world to give up on a future multilateral trade round. The poorest countries have most to lose from a retreat into trade protectionism or from the maintenance of the international status quo. The WTO is a membership-based, rules-based system, and the majority of its members are developing countries. In the white paper, the government will be looking at the sort of reforms that are necessary to make the global trading system fairer for poorer countries, including a reduction in the barriers that richer countries impose on poor-country exports in such areas as agriculture, textiles and manufactures. We will look, too, at how developing countries can be helped to take advantage of increased trading opportunities. And we will consider how we can strengthen the influence of developing countries within the WTO.

Second, education and information technology. Over the past three years, we have played a major role in support of primary and basic education. This will continue. We will be looking, in particular, at how we can drive forward the agenda agreed at the World Education Forum in Dakar – to provide high-quality primary education to all children. We will also be considering how we can use the new information and communications technologies to spread educational opportunity, and to help bridge the digital and educational divides that separate the world’s rich from the poor.

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Third, the reform of international financial institutions. Development must be led by the governments of developing countries themselves, but the international financial bodies have a vital role to play in supporting them. Some of the protesters appear to hate the World Bank and the IMF second only to the WTO. Yet these are public sector institutions, funded by tax-payers; their role is to promote development and manage the global economy for the benefit of all. With the active support of the British government, they have changed considerably over the past three years.

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At last year’s annual meetings, for example – in a radical break with the neoliberal, structural adjustment concept of the 1980s and early 1990s – it was agreed that their interventions should be focused around poverty reduction strategy papers (PRSPs), drawn up by the government of the country concerned in consultation with its civil society. We want to ensure that these become the basis for all assistance programmes. Rather than donors tripping over each other, pursuing conflicting agendas or funding duplicated projects that hollow out local institutions, their role would become one of supporting nationally agreed, nationally led poverty reduction strategies. The sadness for me is that so many of the demonstrators who will be on the streets of Prague this month seem not to have noticed any of this.

I am not suggesting that everyone within the World Bank or the IMF has wholly embraced this new agenda – all large bureaucracies take time to change their working methods and priorities. But the PRSPs can mark a real break with the past if we get serious about the process.

Fifty years ago, the architects of the post-war settlement showed vision and audacity when they established the core multilateral institutions, such as the Bank and the Fund, to work alongside the United Nations. The challenge for progressive forces today is not to denounce these institutions or call for their abolition, but to help reform and strengthen them.

History teaches us that progressive forces prevail only when they have a positive agenda. We need a positive agenda now to ensure that globalisation works for the world’s poor. And we need the World Bank and the IMF to help ensure that new technologies and the world’s huge capital flows are harnessed to that end.

Those who want to destroy the WTO, the IMF, the World Bank and the rules-based international system would not help the people on whose behalf they claim to speak. Far from producing a more accountable international system, they would create a world where the rich and powerful make the rules between themselves at the expense of the poorest.

Clare Short is Secretary of State for International Development