>Resent-Date: Wed, 16 Feb 2000 20:29:14 +0100 >X-Authentication-Warning: emiliano.ras.eu.org: list set sender to >[EMAIL PROTECTED] using -f >Reply-To: "The Sand in the Wheels" <[EMAIL PROTECTED]> >From: "The Sand in the Wheels" <[EMAIL PROTECTED]> >To: <[EMAIL PROTECTED]> >Subject: NEWSLETTER 21 - TO REFORM GLOBAL FINANCE >Date: Wed, 16 Feb 2000 20:07:08 +0100 >Organization: ATTAC >MIME-Version: 1.0 >X-Priority: 3 >X-MSMail-Priority: Normal >X-MimeOLE: Produced By Microsoft MimeOLE V5.00.2314.1300 >Resent-From: [EMAIL PROTECTED] >X-Mailing-List: <[EMAIL PROTECTED]> archive/latest/1 >X-Loop: [EMAIL PROTECTED] >Precedence: list >Resent-Sender: [EMAIL PROTECTED] > >SAND IN THE WHEELS (n°21) >ATTAC Weekly newsletter - Wednesday 02/16/00 > >______________________________ > >Please circulate and distribute. > >This weekly newsletter was put together by the « Sand in the Wheels » >team of volunteers. <[EMAIL PROTECTED]> <http://attac.org> > >To subscribe or unsubscribe: <http://attac.org/listen.htm> > >To download printing >Format RTF http://attac.org/attacinfoen/attacnews21.zip >Format PDF http://attac.org/attacinfoen/attacnews21.pdf >____________________________________________________________ > > > >Content > >1- Europe Inc. >2- Taking Back Our World: UNCTAD >3- Financing for Development >4- A Tax on Foreign-Exchange Transactions > > >______________________________ > >Europe Inc >____________________________________________________________ > >Synthesises Corporate Europe Observatory*s research and publications >of the past three years. Corporate Europe Observatory (CEO) is a >not-for-profit research and campaign group targeting the threats to >democracy, equity, social justice and the environment posed by the >economic and political power of corporations and their lobby groups. > >"Europe Inc. will prove to be one of the most useful guides to the >murky world of international corporate politics ever published" > >(George Monbiot writes in the foreword) > >Europe Inc. is published by Pluto Press in association with Corporate >Europe Observatory. It provides a unique and comprehensive overview of >the systematic ways in which transnational corporations - working >through lobby groups - have succeeded in influencing a wide range of >policies of the EU and other international institutions, such as the >OECD, WTO and the United Nations. The authors cover the major players >in these anti-democratic practices and analyse the structural and >political factors which have enabled transnational corporations to >become such a dominant force in politics. > >In their analysis of the EU's current neoliberal economic strategies - >which involve promoting deregulation and privatisation in virtually al >l areas and subordinating every policy field to the objective of >international competitiveness - the authors focus on the activities of >corporate lobby groups and corporate-state alliances. These include >bodies such as the European Roundtable of Industrialists (ERT), the >Transatlantic Business Dialogue (TABD), the International Chamber of >Commerce (ICC), and the Association for Monetary Union of Europe >(AMUE). The featured case studies examine corporate influence on >transport, biotechnology, climate change policies, as well as key >economic globalisation projects such as the Transatlantic Economic >Partnership and the Multilateral Agreement on Investment. > >Ordering Information > >*Europe Inc.; Regional & Global Restructuring and the Rise of >Corporate Power* / Belén Balanyá, Ann Doherty, Olivier Hoedeman, Adam >Ma*anit and Erik Wesselius / London: Pluto Press, January 2000 - 272 >pages, 4 photographs / 215 x 135mm Pocketbook: ISBN 0-7453-1491-0 >(£14.99) Hardcover:ISBN 0-7453-1496-1 (£45.00) > >The book is available through bookshops, but can also beordered >directly from Pluto Press at http://www.plutobooks.com orby >contacting: Pluto Press, 345 Archway Road, London N6 5AA, United >Kingdom > > >______________________________ > >Taking Back Our World: UNCTAD >____________________________________________________________ > >UNCTAD (UN Conference on Trade and Development) used to be a watchdog >with bark, bounce and bite, faithful servant of Third World >development aspirations. Now it is a tame poodle at the heels of the >WTO and international finance. > >How did this happen, and can the process be reversed? > >Dr. Walden Bello*, professor of sociology and public administration at >the University of the Philippines, and executive director of Focus on >the Global South, believes that UNCTAD (UN Conference on Trade and >Development) can be used to challenge the WTO. This article presents a >summary of his reasoning that UNCTAD can serve as a catalyst to seize >the initiative, frame the terms of debate on the future of global gove >rnance, and push for the creation of institutions that will truly >serve citizen interests everywhere. > >An enlightening backward glance > >The history of UNCTAD begins in the period of decolonization in the >1950's and 1960's.The emergence of scores of newly independent states >took place in the politically charged atmosphere of the Cold War. >Third World countries gravitated toward an economic agenda that had >two underlying thrusts: rapid development and a global redistribution >of wealth. > >Under its first Secretary-General, the Argentine economist Raul >Prebisch, UNCTAD advanced a global reform strategy with three main >prongs. The first was commodity price stabilization through the >negotiation of price floors below which commodity prices would not be >allowed to fall. The second was a scheme of preferential tariffs, or >allowing Third World exports of manufactures, in the name of >development, to enter First World markets at lower tariff rates than >those applied to exports from other industrialized countries. The >third was an expansion and acceleration of foreign assistance, which, >in UNCTAD's view, was not charity but "compensation, a rebate to the >Third World for the years of declining commodity purchasing power." >UNCTAD also sought to gain legitimacy for the Southern countries' use >of protectionist trade policy as a mechanism for industrialization and >demanded accelerated transfer of technology to the South. > >UNCTAD reach edits apogee at its 4th Conference (UNCTAD IV) in Nairobi >in 1976. > >The UNCTAD approach, known as 'structuralism', came to be reflected to >a greater or lesser degree, in the approaches of other key economic >agencies of the United Nations secretariat, such as the Economic and >Social Council (ECOSOC) and the United Nations Development Program >(UNDP), and it became the dominant viewpoint among the majority at the >General Assembly. Instead of promoting aid, UNCTAD focused on changing >the rules of international trade. > >Another UNCTAD achievement was getting the industrialized countries to >accept the principle of preferential tariffs for developing countries. >Some 26 developed countries were involved in 16 separate "General >System of Preferences" schemes by the early 1980's. > >These concessions were real, but turned out to be limited. In the case >of commodity price stabilization, it soon became apparent that the >rich countries had replaced a strategy of confrontation with an >evasive strategy of frustrating concrete agreements - such as those on >cocoa, tin and sugar, which, a decade after UNCTAD IV, were still not >operative. > >Right-wing reaction and the demonization of the UN > >By the late seventies, even small concessions were viewed with alarm >by increasingly influential sectors of the U.S establishment. The >United Nations system was a central feature of the demonology of the >South that right-wing circles articulated in the late seventies and >early eighties. As the right-wing think tank Heritage Foundation saw >it, the governments of the South devoted "enormous time and resources >to spreading the NIEO ideology throughout the UN system and beyond. >Virtually no UN agencies and bureaus have been spared." The South's >effort to redistribute global economic power via UN mechanisms was >viewed as a plot. > >Especially threatening to the Foundation was the effort by the Third >World to "redistribute natural resources" by bringing the seabed, >space, and Antarctica under their control through Law of the Sea >Treaty, the Agreement Governing Activities of States on the Moon and >Other Celestial Bodies (called the "Moon Treaty"), and an on-going UN >study and debate over Antarctica > >As the 1980's unfolded, the North's drive to discipline the South >escalated. The IMF and the World Bank subjected over 70 countries to >structural adjustment programs, the main elements of which were >radical deregulation, liberalization, and privatization. This was >accompanied by a major effort to emasculate the United Nations as a >vehicle for the Southern agenda. > >Wielding the power of the purse, the United States, whose contribution >funds some 20-25 per cent of the UN budget, moved to silence the New >International Economic Order (NIEO) rhetoric in all the key UN >institutions dealing with the North-South divide: > >But the main focus of the Northern counteroffensive was to draw the >teeth of UNCTAD. During UNCTAD V in Belgrade, the North refused the >South's program of debt cancellation and other measures intended to >revive Third World economies and thus contribute to global recovery at >a time of worldwide recession. During UNCTAD VIII, held in Cartagena >in 1992, the North successfully opposed all linkages of UNCTAD >discussions with the Uruguay Round negotiations of the GATT and >managed to erode UNCTAD's negotiation functions, thus calling its >existence into question. > >But this was apparently not enough for certain Northern interests. For >instance, the Geneva-based Independent Commission on Global Governance >identified UNCTAD as one of agencies that could be abolished in order >to streamline the UN system. It was said that UNCTAD had been made >obsolete by the creation of the World Trade Organization. > >UNCTAD on the defensive > >During UNCTAD VIII, the North pushed to limit UNCTAD's function's to >"analysis, consensus building on some trade related issues, and >technical assistance." However, even in this limited role, UNCTAD >managed during the late eighties and nineties to perform indispensable >tasks for the South. > >Among other things, UNCTAD's research and analytical work: - showed >that structural adjustment was leading to stagnation, not to growth as >promised by the World Bank and the IMF. - underlined the crippling >debt overhang that made any development impossible, thus providing >intellectual ammunition for the Jubilee campaign. - continued to >remind the world that the crisis of Third World countries was due, not >to their lack of liberalization but to the plunging prices of their >raw material and agricultural exports and the continuing deterioration >of the terms of trade against them; - pointed to the tremendous >potential instability posed by unregulated global financial flows . - >emphasized the continuing importance of vigorous state policies in >sustaining development when the reigning neoliberal ideology sought to >reduce the state's role. - underlined the many biases against >developing countries of the GATT-Uruguay Round. > >All in all, UNCTAD publications provided unassailable empirical >evidence that globalization was spawning greater inequalities between >and within countries. The annual Trade and Development Report served >as a healthy antidote to the paeans to the free market and free trade >coming out of World Bank and WTO publications such as the World Bank >Development Report. > >An opportunity to be taken at the flood > >The collapse of the Third WTO Ministerial in Seattle provides an >opportunity for UNCTAD to reclaim a central role in setting the rules >for global trade and development. For this to happen, some of the >paradigms which appeared valid at UNCTAD IV in 1976 need changing. >There is need for UNCTAD to incorporate many of the insights of >ecological economics, which sees global trade, whether managed or >free, as one of the key factors destabilizing the national and global >environment. It must give serious consideration to the principle of >subsidiarity in production and trade, according to which whatever can >be produced locally with reasonable cost should be produced and traded >locally as a way of preserving or enhancing the health of both >environment and society. > >At the start of the 21st century, UNCTAD must elaborate a different >paradigm, that subordinates narrow efficiency to the values of social >solidarity, social equity, gender equity, and environmental integrity. >UNCTAD's analysis must also move away from an overwhelming focus on >international trade as the key factor in development. The necessary >links between growth, national sovereignty, and social reform must be >placed at the center of trade and development policy. > >UNCTAD, in other words, must see that its constituency goes beyond >governments to include, more fundamentally, the citizens. Thus it must >open up its decision-making processes to civil society and >non-governmental organizations. > >The necessary move to center-stage > >UNCTAD must break out of the cage that the rich countries have >fashioned for it and carve out a much more powerful role in trade and >development issues. Relevant to the need for change is the fact that >recent documents - the draft "Plan of Action" and "Bangkok >Consensus" - show a lamentable broad adherence to the limits placed by >the North on UNCTAD's mandate. Its role, as defined by the North, >becomes essentially one of holding the hands of developing countries >as they integrate into the WTO It is a role that has led to UNCTAD >being deployed as a "fixer" for the WTO, to legitimize the process of >bringing investment into the jurisdiction of the WTO. > >What UNCTAD should be doing, in the aftermath of Seattle, is to >challenge the role of the WTO as the ultimate arbiter of trade and >development issues. UNCTAD should instead be putting forward plans by >which trade, development, and environment issues must be formulated >and interpreted by a wider body of global organizations, including >UNCTAD, ILO, the implementing bodies of multilateral environmental >agreements, and regional economic blocs, interacting as equals to >clarify, define, and implement international economic policies. > >UNCTAD should push to become, not just a forum for the discussion of >policies, but a "world parliament on globalization", with real >legislative and executive power in the nexus of trade, finance, >development, and environment. Its original, activist, decision-making >role is one that UNCTAD must reclaim. > >In three particular areas, UNCTAD should demand broad global agreement >: - An agreement on the "Special and Differential Treatment" that must >be accorded to developing countries in global trade, investment, and >finance. Such an agreement would specify measures to protect >developing economies from the perils of indiscriminate >liberalization, support their efforts to develop through the use of >trade and investment policy, and secure their preferential access to >Northern markets. An UNCTAD-sponsored agreement would guide the >actions of the WTO, IMF, European Union and all other major >international economic actors. > >-In addressing the critical nexus of trade and environment, UNCTAD >could lead in drafting an agreement specifying broad but binding >guidelines and a pluralistic mechanism, involving civil society >actors, that would judge between the conflicting claims of the WTO, >multilateral environmental agreements, governments, and NGOs. > >- In light of the failure of the G-7 to respond to the need for a >reform of global finance, UNCTAD should seize leadership in this area >and forge an agreement among its 180-plus member countries that would >put such a system in place. This system could involve Tobin taxes, >regional capital controls, national capital controls, and a >pluralistic set of regulatory institutions - innovations that are >necessary for global financial stability, but which are resisted by >the banks, hedge funds, the IMF, and the US Treasury Department. > >- UNCTAD could also lead in forging a "New Deal" for agriculture. The >emphasis of such a convention would not be the integration of >agriculture into world trade but the integration of trade into a >development strategy that will put the emphasis on raising incomes and >employment in the agricultural sector, achieving food security through >a significant degree of food self-sufficiency, and promoting >ecologically sustainable production > >All this implies UNCTAD taking an active role in a process of reducing >the powers of the WTO and the IMF. It is not surprising that both the >WTO and IMF are currently mired in a severe crisis of legitimacy. >These are Jurassic institutions in an age of participatory political >and economic democracy. The dynamics of such institutions clash with >the burgeoning democratic aspirations of peoples, countries, and >communities in both the North and the South .Their centralizing thrust >clashes with the efforts of communities and nations to regain control >of their fate and achieve a modicum of security by deconcentrating and >decentralizing economic and political power. UNCTAD may not have the >material resources of the World Bank and IMF, but it has something >that the billions of dollars of these institutions could not buy: >legitimacy among developing countries. > >A vigorous UNCTAD that competes in the process of defining global >rules for trade, finance, investment, and sustainable development is >essential in a pluralistic global economic regime where global >institutions, organizations, and agreements complement as well as >check one another. It is in a more fluid, more pluralistic, less >structured, world with multiple checks and balances that the nations >and communities of the South will be able to carve out the space to >develop in a way based on their values, their rhythms, and the >strategies of their choice. UNCTAD has a critical contribution to make >in the emergence of such a system of global governance. > >* For information about the work and publications of Dr. Walden Bello >(10 books and numerous articles on global and Asian economics and >politics, including Iron Cage: The WTO, the Bretton Woods >Institutions; and Bangkok: Focus on the Global South, 1999) : "Walden >Bello" [EMAIL PROTECTED] http://www.focusweb.org/ > > >______________________________ > >Financing for Development >____________________________________________________________ > >Preparations for a high-level consultation in 2001 > >The UN Development Policy Analysis Division (Department of Economic >and Social Affairs) has recently prepared a questionnaire on >financing for development which can be found on the Internet at the >following address: >http://www.un.org/esa/analysis/ffd/ques00.htm > >The results of the questionnaire will help the Financing for >Development Preparatory Committee to define the agenda for the final >event. In this respect, question N°1 is the most important one. > >It is crucial that as many NGOs as possible fill in this questionnaire >in order to identify the right issues e.g. ODA, debt relief, >preventing international financial crisis and excessive financial >volatility, special needs of Africa, innovative sources of financing >(f.i. taxation, Tobin-type tax...)... There is a risk otherwise that >governments and the private sector will dominate the agenda. > >Please take 10 mn of your time to answer the questions. The deadline >for replies is early March. > >Eva Hanfstaengl > > >______________________________ > >A Tax on Foreign-Exchange Transactions >____________________________________________________________ > >A Currency Transactions Tax (CTT) of the form usually discussed could >very probably be reliably collected through the >foreign-exchange-settlement system, and, if all major countries, or >even the four or five authorities issuing the major >vehicle-currencies, agreed to impose it at a uniform rate of the order >of 0.05% to 0.1%, it could probably raise sums of the order of $75-200 >billion a year or more. A strong case on grounds of justice could >be made for devoting a large proportion of this sum (the great bulk of >which would be collected by the authorities of a few rich countries) >to the fight against world poverty or to other global purposes such as >peacekeeping. But, to encourage general participation, which would >be desirable in order to guard against the eventual development of >vehicle-currencies outside the system, each participant should by >agreement keep a certain part of the amount collected. That part >would need to be defined in some equitable way---for example as some >function of (a) the amount collected and (b) a certain fixed amount >(say $5) per head of population. > >At such low rates it would probably reduce short-term speculative >foreign-exchange transactions somewhat, while having very little >effect on international trade in goods and services or long-term >investment. > >This differential reduction in short-term speculative foreign-exchange >transactions in itself would very probably decrease general >exchange-rate instability to some extent. But, in the simple form >in which the CTT has usually been discussed (a single, very low, >uniform rate), the tax would probably have little impact on the major >speculative flights of currency that have been among the most >disturbing economic phenomena of the 1990s. > >However, a two-tier CTT---with a second, much higher, penal rate to be >applied (a) temporarily, (b) under prior announcement, (c) on >objective criteria, to transactions in any currency whenever the >exchange-rate of that currency had changed at more than a certain >velocity---could be used with every prospect of success to prevent >sudden speculative flights of currency. > >The mere fact that such a mechanism was known to be in place would >very probably prevent any such speculative rush from beginning, so >that the higher rate might never have actually to be applied. >· This would not block useful exchange-rate adjustment. >· It need also not reduce in any way a country's autonomy in >exchange-rate policy. > >It is not the only plausible way in which such crises might be >avoided; but >· it is superior in a number of ways to conventional >exchange-controls; >· more confidence might be placed in it than in Chilean-type fiscal >disincentives to short-term-capital imports, useful as these might be >if imposed well in advance of a potential crisis and applied to all >inflows; and >· it seems more likely politically to be offered, and more credible if >promised, than an undertaking from the outside world to intervene >massively in the currency markets (by buying any threatened currency) >in order to prevent over-rapid exchange-rate changes. > >It could in principle be applied unilaterally by a country to defend >itself from speculative currency flight; but an international >arrangement would probably inspire more confidence. >All the device requires is that the mechanism for collecting a CTT be >set up. The regular lower-tier rate might be very low or zero >without preventing the threat of a higher rate from blocking >speculative currency flights. > >Given the uncertainty about the effect of a CTT on the volume of >foreign-exchange transactions, the lower tier should be introduced >initially at a very low rate---and then raised gradually as and if >raising it appeared to be justified by the effects (or lack of effect) >on the volume and pattern of currency trading. With a rate of 0.01%, >revenue raised would probably still be substantial. After observing >the effect of a tax at that rate, the governments concerned could >proceed from there to increase the lower tier as seemed appropriate, >and so probably to provide, if they chose, very substantial sums for >such global purposes as social development, peacekeeping and >environmental protection. > >Anthony Clunies Ross >Kinbuck, Perthshire, Scotland; 2 February 2000 > >Excerpt from A Tax on Foreign-Exchange Transactions - Report of a >Consultation held by CIDSE in collaboration with the University of >Antwerp (UFSIA) - 22 October 1999, Antwerp, Belgium >CIDSE General Secretariat: Rue Stévin 16 - B-1000 Brussels - Belgium / >Tel : (32) 02 230 77 22 - Fax (32) 02 230 70 82 - E-mail: >[EMAIL PROTECTED] - Website: www.cidse.be >
