Recent developments indicate the consequences of an agenda which hinges on unregulated global market forces are beginning to worry the 'power elite'
Globalization began with the disintegration of the Soviet Union in 1991 among other factors. Is it approaching a moment of nemesis now? Moscow, says Fyodor Lukyanov, the editor-in-chief of Russia in Global Affairs, and chairman of the presidium of the Council on Foreign and Defence Policy, doesn’t want to bask in “schadenfreude" (pleasure derived from the misfortunes of others) but the European Union is facing an existential crisis now, including a potential break-up.
Indeed, developments in recent weeks have indicated that the consequences of a globalization agenda which hinges on unregulated global market forces and the promotion of big international corporations are beginning to worry the “power elite". The Brexit vote in the UK and the surprising strength of the Trump campaign in the US has focused minds on the damage such an agenda is causing by increasing inequality and undermining democracy. But the brutal economic assault on the Greek people and the slow strangulation of the Italian economy have suggested that these are not just Anglo-Saxon anxieties and that austerity economics in the euro zone is also failing large parts of its citizenry with worrying (but predictable) political consequences.
Larry Summers, the Harvard academic and adviser to the Clinton and Obama administrations, in a recent article in Financial Times, has accused globalization enthusiasts of using “a combination of rational argument and inflated rhetoric about the consequences of international integration" to produce an abstract notion of “the global good" which has prevented policymakers from delivering welfare improvements to their citizens. He recommends a return to “responsible nationalism" and sensible international cooperation.
International Monetary Fund chief Christine Lagarde has recently suggested that globalization needs to be saved from itself, singling out rising inequality as the Achilles’ heel of market-driven globalization, while her own researchers have taken an even more radical track, suggesting that some of the neo-liberal economic policies previously pushed by the institution need to be revised, as they have not only failed to deliver on their own promises but are hampering future economic prospects.
Other economists have also focused on the damage done by free trade agreements, with Nobel laureate Joseph Stiglitz writing a series of stinging critiques of the Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership for their anti-democratic orientation, attack on worker rights and threat to welfare provisions. Harvard professor Dani Rodrik has suggested that there is a growing recognition that “globalization accentuates class divisions between those who have the skills and resources to take advantage of global markets and those who don’t".
Meanwhile, the one international institution that has consistently warned about the dangers of a global economy organized under neo-liberal tutelage is currently holding its 14th conference in Nairobi from Sunday. The United Nations Conference on Trade and Development (UNCTAD) was already putting out research and analysis on the un-equalizing and destabilizing consequences of market-driven globalization some 20 years ago. Its head at that time, the Brazilian Rubens Ricupero, made a challenging statement at the World Trade Organization (WTO) meeting in Seattle in 1998, warning about the disruptive forces of globalization and calling for changes to multilateral trade rules which he suggested lacked coherence and legitimacy.
Shortly after that, at its 10th conference in Bangkok, UNCTAD was commended for its prescient analysis of the destructive impact on development caused by unregulated financial markets. And at its 11th conference in Sao Paulo, it was UNCTAD that pushed the idea of policy space back on to the international agenda, insisting that this was key to ensuring more balanced and inclusive economic outcomes. The advanced economies, having tried hard but failing to close down UNCTAD in the early 1990s, were increasingly incensed by its critical analysis of the neoliberal agenda. More so as their own international institutions in Washington, Brussels, Geneva and Paris continued to promote this agenda right up to the 2008 financial crisis and, in important respects, since then as well. They have, accordingly, spent the last two UNCTAD conferences in Accra (2008) and Doha (2012) trying to neuter the organization, but met strong resistance from the G77 and civil society.
Predictably, and despite their own institutions now moving closer to the UNCTAD position, the rich countries are, according to developing country diplomats, again in attack-mode in Nairobi. Despite UNCTAD’s raison d’être of addressing international development issues, these countries don’t want it to discuss issues such as the impact of unstable financial flows, debt restructuring, etc., or to follow up its work on policy space and related matters of international governance, or even discuss pressing development challenges such as those around the transfer of new technologies, international tax matters and the abuse of corporate market power, insisting instead that the organization focus on trade facilitation, gender issues and the promotion of micro enterprises.
Despite UNCTAD being funded out of the UN’s regular budget, the aim, it seems, is to turn it into a technical assistance agency dependent on, and responding to, donor money and in areas that largely duplicate efforts done in other international institutions.
As the struggle to fashion a relevant mandate for the institution continues, the situation isn’t being helped by a major division in UNCTAD’s own senior management, with its recently appointed deputy secretary general Joakim Reiter, a former Swedish ambassador to the World Trade Organization, appearing to side with the Brussels line rather than defending UNCTAD’s own research and analysis on global economic issues. This is creating a serious rift with UNCTAD’s secretary general Mukhisa Kituyi of Kenya, who has insisted that “independent thinking and debate" has been the hallmark of the institution and is more relevant than ever at a time when “the global economy needs rebalancing and its governance structure, redefining".