-Caveat Lector-
-------- Original Message --------
Subject: Guardian analysis of Davos
Date: Tue, 30 Jan 2001 12:10:57 -0600 (CST)
From: MichaelP <[EMAIL PROTECTED]>
Organization: ?
To: undisclosed-recipients:;
GUARDIAN (London) Monday January 29, 2001
Larry Elliott in Davos
Opening gambit without strategy
First, the good news. Everybody in Davos knows that there is a problem
with globalisation. Things aren't working out the way they were supposed
to when the grand design was outlined at the start of the 90s. There's a
bit more humility and a greater willingness to accept that those who have
been warning about the nasty side-effects of one size fits all integration
might have a point.
Klaus Schwab, the man behind the World Economic Forum, neatly summed the
state of play when he said there were seven challenges of globalisation,
none of which seemed the slightest bit controversial. Schwab's list of
problems is worth considering, because it could be considered the modern
equivalent of the five giants identified by Beveridge as standing in the
way of progress when he was writing his report on the need for a
cradle-to-grave welfare state in 1942.
[ Note - I was twelve when -in the middle of a war the newspapers filled
with this "Beveridge Report" which proclaimed a vision of e.g FREEDOM FROM
HUNGER, FREEDOM FROM WANT. This is what set the stage for the creation of
the brit. National Health Service and other ideas of social service which
are being ( or have been) whittled away and replaced by nothing..
MichaelP ]
First on Schwab's list came the need to create conditions for faster
growth. Then he cited the need for environmental and social
sustainablility, followed by effective international peace keeping, a
narrowing of the technological and social gulf between rich and poor, the
need for higher standards of health and nutrition, a common understanding
of human rights and values and, finally, the safeguarding of cultural
identity in an increasingly homogenised world. Or, in the lingo of
Beveridge, Want, Pollution, War, Ignorance, Disease, Cruelty and
Uniformity.
The immediate riposte to Schwab's list is that this is a case of
motherhood and apple pie. But this has not always been so, even in the
recent past. The idea that globalisation has no future without greater
inclusion, without environmental sustainability and without a concern for
the human dimension, was certainly not in evidence in the first few years
after the Berlin Wall came down. But life has moved on. The climate is not
so benign and the Lyndon Johnson principle is now at work: it's better to
have the protestors inside the tent pissing out than on the outside
pissing in.
So, that's the good news. What's the bad news? Well, the fact that Davos
was turned into a fortress at the weekend is symptomatic of some deeper
malaise. Civil society representatives who were invited to take part in
the World Economic Forum were rightly concerned about the way in which the
Swiss government treated those who sought to express their concerns about
globalisation in a peaceful way on the town's streets.
What this means, of course, is that getting the rhetoric right is one
thing, changing behaviour is quite another. It's easy to make all the
right noises about making globalisation inclusive, but what does this mean
when the rich countries of the world are spending $1bn a day subsidising
their farmers, with the annual subsidy three times as large as the entire
amount spent on aid budgets? Not a lot...
How much credence should we give to those who argue that free trade will
work for everyone when the modest if welcome plan by the EU's trade
commissioner, Pascal Lamy, to give duty free access to all goods except
arms from the 48 poorest countries was met with a barrage of protectionist
objections from the big barons of the European sugar industry? Not a great
deal. How genuine is the commitment to tackling the epidemic of HIV-Aids
in Africa when the big drugs companies use their enormous financial and
legal clout to prevent poor countries from manufacturing their own cheap
generic cures? You tell me.
Moving from words to action is going to be tough. Playing chess is not
simply about knowing that a bishop moves diagonally or that a pawn can
move forward two squares on its first move, it is about the overall
strategy. Sometimes a tactical retreat paves the way for a strategic
advance. The good player also knows when to make a sacrifice.
Those running the global economy appear to lack the grand master strategy.
They have all their pieces but don't know how to play the game. The
chaotic state of Russia in its first decade after the collapse of
communism is largely due to the ill-conceived sequencing of moves, with
privatisation and the scrapping of foreign exchange controls leading to
larceny and capital flight on a grand scale. The economy halved in size in
a decade; male life expectancy dropped by 10 years.
China, by contrast, has followed a more cautious approach, liberalising
selectively and at its own pace; more people have been lifted out of
poverty in the past 20 years than at any time in human history.
The key to a successful strategy is getting the sequencing right. Higher
growth in developing countries is not just a question of them opening
their markets and liberalising their capital accounts - indeed, these
policies may be more of a hindrance than a help. These should be final
moves in the chess game rather than the opening gambits. Instead, they
need debt cancellation, better access to the rich markets of the north and
an increase in aid.
Yashwant Sinha, the finance minister of India, said that nobody in
developing countries challenged the inevitability or the potential
benefits of globalisation, but that the rich countries needed to learn
some facts of life.
Firstly, it was impossible to achieve globalisation in an unequal world.
Secondly, the problems of the environment were not caused by consumption
patterns in the south but by the lifestyles of people in the north, and
developing countries were unwilling to listen to sermons about
sustainability from those doing most of the global polluting. Finally, the
west needed to do something about its skewed approach to migration since
the system involved poaching the brightest and the best from poor
countries and putting up barriers to the rest. According to Mr Sinha, 38%
of all doctors in the US are Indians, as are 34% of the scientists at
Nasa.
The real question is whether the west, which is so keen on telling poor
countries what to do, is capable of change itself. It's easy, at this
point, to look at the way the Americans scuppered the climate talks in the
Hague last year and give up. Yet, as the debt campaign showed, it is
possible to force change even against the most implacable of opponents,
provided that economics plays second fiddle to politics.
The renaissance of politics has perhaps been the most important
development of the past few years. It is now clear that the future of the
planet cannot be entrusted to the divine workings of the market or left in
the hands of corporations. There are choices to be made, and they are
political choices.
But isn't it a problem that governments tend to listen to the voices of
business, rather than civil society? You bet it is. In the shorthand of
the modern world, business is seen as dynamic, civil society as
conservative. But as Ed Mayo of the New Economics Foundation said in Davos
this weekend, nearly all the great leaps forward for mankind have been as
a result of pressure from civil society. If governments are looking for
creativity, enterprise and innovation, then historically they should look
beyond the boardroom.
Unfortunately, recapturing politics may be a long, slow process. The
historian Paul Kennedy said that he was now insisting that all his
students at Harvard study the great leaders of the past so they would be
able to think strategically when they took up their positions at the head
of the global elite of the future. This is sensible stuff. Our technical
ability to make things and to pollute now far outstrips our ability to
understand the processes we have unleashed. The idea that schools should
be teaching philosophy and ethics may seem laughable. Actually, if we are
to have any hope of a long term future, it is essential.
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