|
|
Enron Mail |
This message contains the text of Sidney Weintraub's "Issues in International
Political Economy" October 2000. To go directly to the web version, click on: http://www.csis.org/americas/pubs/weintraubnewsletters102000.html For further information, contact: Rebecca Tunstall Research Assistant William E. Simon Chair in Political Economy Center for Strategic and International Studies p- 202-775-3123 f- 202-466-4739 ISSUES IN INTERNATIONAL POLITICAL ECONOMY October 2000, Number 10 TELLING IT LIKE IT IS Sidney Weintraub This is my curmudgeon commentary. Its barbs are directed against exaggeration, double talk, and scapegoating of important institutions engaged in global economic development. I do not intend, in what follows, to disparage the importance of labor unions in protecting the rights and benefits of workers, or to argue that the United States is a protectionist nation, or to doubt the valuable work that is done by multilateral institutions. My purpose, rather, is to highlight a few points: the hypocrisy that exists when imports of goods and services from poor countries are restricted while simultaneously insisting that this exclusion will benefit workers in those countries; the inconsistency of promoting democracy in developing countries even as we neglect the interplay of foreign trade, economic well-being, and political outcomes; the perpetuation of the fiction that multilateral institutions are independent actors that behave supranationally in ways that conflict with the desires of their powerful members; and the misconception that institutions such as the World Bank provide a service by promising more than they can deliver. The leaders of organized labor in the United States opposed NAFTA and the grant of permanent normal trading relations with China. They are also against a free trade area of the Americas and opening a new round of negotiations in the World Trade Organization. The stated basis for this opposition is that the United States should not further liberalize its import structure until other countries accept core labor standards (right of association, power to organize and bargain collectively, prohibition against forced labor, minimum age for employment of children, and acceptable working conditions), and that punishment should be meted out in the form of U.S. import restrictions when these standards are violated. Is this protectionism or a socially conscious initiative to upgrade labor conditions in poor countries? The leaders of poor countries insist that they, too, want to raise labor standards, but cannot do this if their export earnings are restricted. The practical result of the U.S. position is that meaningful trade negotiations are not going forward. Even though labor leaders insist this is not about protectionism, it sure looks like protectionism. (Former senator Dale Bumpers has noted that when politicians say something is not about money, it is about money.) World Bank analysis has shown persuasively that the developing countries that have made the most progress in raising incomes are those that have opened their markets and engaged actively in world trade. However, there are still antitrade advocates who advise today's developing countries to look inward, just as many of today's developed countries focused first on internal markets and protecting their producers against foreign competitors. This was Alexander Hamilton's advice to the newborn United States. It was the development pattern for Japan. It was Ra?l Prebisch's advice to Latin American countries. Although this advice may have had some relevance once upon a time for countries with large or potentially large internal markets, such as Brazil, it surely does not for countries with tiny markets, like many in Latin America, the Caribbean, and Africa. The lesson of post-World War II development history is that countries that looked outward, such as those in East Asia, grew rapidly, while those that looked inward, as in Latin America, were relatively stagnant. Is the advice to poor countries to look inward in the modern and increasingly globalizing world sincere, or is it designed to prevent competition in the U.S. market? Why advise developing countries to emulate the world's losers rather than the winners? A dominant aspect of U.S. foreign policy today is to promote democracy wherever this seems feasible, such as in Latin America and the Caribbean, East Asia, Africa, and the transition nations of the former Soviet Union. This is a laudable effort. At the same time, however, the most severe U.S. trade restrictions are directed against imports from developing countries-such as sugar and textile products from just about everywhere, orange juice from Brazil, and steel from many developed and developing countries alike. U.S. foreign aid now represents 0.1 percent of our gross national product, placing it at the bottom of the list of donor countries. Our slogan used to be "trade, not aid." Now it is more like "not too much trade and very little aid." It is extremely difficult for poor countries to establish stable democracies. Achieving this obective is made even more complex by the inherent contradiction in U.S. policy-preaching democracy even as we limit the ability of these countries to obtain the resources necessary to make democracy possible. During the past year much invective has been hurled at key multilateral institutions established at the end of World War II. This was evident in Seattle late last year when protesters tried to disrupt the meetings of the World Trade Organization (the successor to the General Agreement on Tariffs and Trade, which came into being in 1947), and again last month in Prague during the annual meetings of the World Bank and the International Monetary Fund. It is not clear why the demonstrations were directed against these institutions rather than at the countries which determine the institutions' policies. They are not supranational bodies, but rather creatures of their masters, the world's most powerful national governments. It is troubling when nongovernmental organizations exercise their right of free speech by preventing delegates to international meetings from exercising their right of free speech. We should not be troubled, however, when serious nongovernmental observers act constructively to change practices they find offensive. The IMF has long been ultrasecretive about its analyses and findings; this is inappropriate for an institution that obtains its funds from national governments (i.e., from taxpayers). The WTO's dispute-settlement procedures, which are an important part of that organization's work, have themselves been overly secretive. Many of these practices are changing, and the outside critics deserve much of the credit for this greater openness. The president of the World Bank, James Wolfensohn, has exerted great effort to make the bank's work more transparent. At the same time, he exaggerates, incorrigibly so. He implies that the bank, under his leadership, has "discovered" that economic growth, while necessary, is not sufficient to achieve widespread social development. There are many examples of this attitude. Only one will be cited: "The old approach of an exclusive focus on growth as the elixir for all the world's problems is thus too circumscribed" (op-ed by Wolfensohn and Joseph Stiglitz, Financial Times, September 22, 1999). Wolfensohn's emphasis on alleviating poverty is praiseworthy, but the trashing of all the foreign aid practitioners who preceded him for not understanding the multiple aspects of development is egregiously inaccurate and ungracious. The World Bank's World Development Report 2000/2001 is devoted exclusively to "attacking poverty." It approaches this theme citing three areas for action: creating opportunities, empowering the poor, and providing greater security against the risks the poor face. The study contains a mountain of data and undoubtedly will be a valuable reference source for years to come. What it fails to do, however, is to explain how the World Bank can achieve these goals, particularly empowerment, which it admits depends on "the interaction of political, social, and other institutional processes." Is this the role of the World Bank? Issues in International Political Economy is published by the William E. Simon Chair in Political Economy at the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author. , 2000 by the Center for Strategic and International Studies.
|