-Raghav Narsalay and Minar Pimple
Introduction
This paper is an effort to demystify the geopolitics that has been shaping the parameters of global financial and trade architecture since World War II. It analyses the impact of the changing face of global financial and trade architecture on Indian policymaking processes, both at the national and sub-national levels for the decade of the nineties. This piece concludes by discussing issues that would assume importance in impacting the geopolitical equations in the near future at various levels and also defines the role of social work professionals/institutions in the emerging scenario.
It is important to note at the outset that civil society, both within and across borders, has been carving out a role for itself with respect to influencing the structure and conduct of trade and financial debates at different levels. It is in this context that the historical political perspective of this essay becomes more relevant.
The decades that 'supposedly' belonged to Developing Countries
The decades of the fifties and sixties witnessed liberation of several British, French and Portuguese colonies. Even though independent nations were faced with the dilemma of politically aligning themselves in a 'Cold War' era their primary political concerns were two fold, viz. framing workable developmental strategies and the second being, equitable global distribution of world resources to aid their developmental efforts. The search was for a platform as well as a well-researched thesis to carry out these tasks.
Raul Prebisch's work in the fifties and sixties clearly showed how developing countries ended purchasing very few finished products from developed countries in exchange of an increasing amount of their resources, viz. agricultural output and other unprocessed industrial products. His research also pointed out the dangerous 'structural' impacts of such a trading regime on developing countries if such unbalanced terms of trade continued in the long run. Developing countries, irrespective of their political alignments with the US or the USSR, collectively used this thesis to advocate the formulation of a number of treaties, initiatives and bodies at the UN.
It was this unified effort that provided a developmental face to the trade and financial architecture of the fifties and sixties. This was reflected by the formulation of the United Nations Conference on Trade and Development (UNCTAD) and the Group of 77 (G-77).
According to the Bello (2000) , with Prebisch as its first Secretary General, UNCTAD (created in 1964) advanced a three-prong global reform strategy. "The first was commodity price stabilization, through the negotiation of floors below which commodity prices would not be allowed to fall. The second was a scheme of preferential tariffs allowing third world exports of manufactures, in the name of development to enter first world markets at lower tariffs than those applied to exports from 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 industrialisation and demanded accelerated transfer of technology to the South."
During the same time, the pressure group of developing countries was also successful in extracting the necessary developmental language during the ongoing negotiations of the General Agreement on Tariffs and Trade [GATT (1947)], a treaty that was ratified by around 26 countries during 1947 as an alternative to the Keynesian idea of creating an International Trade Organisation (ITO). Witness the inclusion of Chapter 4 on "Special and Differential Treatment" in GATT (1947) that reasoned out why and how developing countries needed to be given preferential market access for their exports. This Chapter also allowed developing countries to protect their domestic industries by charging higher tariffs on industrial imports from the developed world.
The Kennedy Round of GATT-negotiations (1963-67) can be considered to be a very important round of negotiations as it paved the way for inclusion of new issues for discussions in comparison to the earlier five round of GATT-negotiations. The new issues that made an entry were: anti dumping and non-tariff barriers. Besides this, the Kennedy Round also mandated the inclusion of agricultural products under the list of items for negotiations in successive Rounds. There are two opinions on whether it was the US or developing countries that actually wanted anti dumping to be included in the Kennedy Round. Those who support the former argument opine that US in order to protect its industry from the futuristic competitive exports of developing countries introduced these discussions at the Kennedy Round. The other set of interpreters believe that, due to reducing industrial import tariffs, developing countries required some instrument to protect their domestic industries and hence wanted some instrument to provide their industries with a level playing field.
One of the first confrontations between the UN, the WB and the IMF and their respective supporters, in the context of pursuing the developmental agenda of the South, occurred during the discussions with respect to creation of a Special UN Fund for Economic Development (SUNFED). Developed countries led by the US opposed this idea in its totality, but could not pursue their agenda due to growing pressure from developing countries. Sadly, the alternative that was suggested and even accepted by developing countries was in the form of an institution, funded and controlled by developed countries. Thus came into being the International Development Association (IDA), the 'soft' arm of the World Bank. Another important outfit that was created as a result of this compromise was the United Nations Development Programme (UNDP) in 1965, under the auspices of the United Nations.
During the last few years of the decade of the sixties there was a growing frustration amongst developing countries about the fact that their political victories on international platforms including the UN, were being rendered insignificant as they lacked financial resources to implement the same. Adding to their financial misery were the steep price fluctuations associated with their exports of primary products. Furthermore, the developed world was stubborn about using the WB/IMF channel and not the UN to route any financial help and that too on its terms and conditions. On the political front, they were not sure about embracing the US-led block or the one led by the USSR to make the most of the emerging international economic order, which ultimately led to the creation of the Non Aligned Movement (NAM). India shared the honour of being the founding member of the NAM.
It was with this political and financial baggage that many from the developing world approached the eventful decade of the seventies.
The eventful seventies…
Since the beginning of the seventies, developing countries realised that they need to engage themselves more vigorously in the process of negotiations on the UN platform, if they had to neutralize the Western agenda being promulgated through the IMF/WB. As a first step in this direction, they needed to assert about being treated equally with respect to assertion of their rights (during negotiations) as an integral requirement of creating a just international order.
The success of the oil producing countries in increasing petroleum prices substantially,
starting in 1973 (commonly referred to as the "Oil Shock") served
as a catalyst to pull together developing countries in support of a call for
a New International Economic Order (NIEO) in which their interests would be
better represented. It would be interesting to find as to why non-oil exporting
developing countries actually supported the price increase propagated by the
OPEC countries. The 'Nopecs' (as Hans Singer a noted economist used to refer
to the non-oil exporting developing countries) had two expectations from the
OPEC countries:
v That these countries would make it possible for other groups of primary producing
and exporting countries - specializing in copper, bauxite, jute, tea etc. to
bring about similar reversal of terms of trade through collective action; and
v That a substantial amount of resources flowing into the OPEC would become
available to the 'Nopecs' in the form of cheap loans.
This call for the NIEO integrated many of the proposals that had been discussed previously at the UNCTAD and other world forums. Specific proposals for changes in the economic system were advanced at the Summit Conference of NAM held at Algiers in September 1973. Following which, the Sixth Special Session of the UN General Assembly was called in April 1974. Interestingly, this session adopted, without a vote, a manifesto entitled "Declaration and Programme of Action of the New International Economic Order".
The main constituents of the NIEO were the following:
v Adoption of an integrated approach to price supports for the basket of commodities
being exported by developing countries;
v Indexation of exports from developing countries to rising prices of manufactured
exports from developed countries;
v Attainment of official developmental assistance to reach the target of 0.7
per cent of Gross National Product (GNP) of the developed countries;
v The linkage of developmental aid with the creation of the IMFs Special Drawing
Rights;
v The lowering of tariffs on the exports of manufactures from developing countries;
v The development of an international food programme; and
v Establishment of mechanisms for the transfer of technology to developing countries,
independent of any proposals in the area of foreign direct investment
The Charter of Economic Rights and Duties of States affirmed each state's full and permanent sovereignty over its natural resources and economic activities, which was specifically set out to include the right to expropriation in disregard to existing international laws.
It was impossible for the North to digest this bitter pill in the form described above. Hence under the leadership of the US, it called for the Seventh Special Session of the UN General Assembly in order to strike a compromise. The Resolution of this Session basically endorsed the demands for NIEO, the ideas for price indexation, the 0.7 per cent aid target the SDR aid link, etc.
But, even this minimized version could be negotiated only after US and its supporters attached detailed reservations to the Resolution. "The negotiations leading to the resolution had the main effect of changing slightly the militant tone of the preceding documents and led to incorporations of some demands for changes and programmes proposed by the US. These US proposals were centered on the basic principle of maintaining the existing economic system and provisions of development assistance through increased trade liberalisation (emphasis added), the transfer of aid and technology through international organisations outside the direct control of the UN (emphasis added) and the creation of some programmes for the stabilization of commodity prices and the creation of some buffer stocks, of a fund to stabilize export earnings of developing countries and of agreements on coffee, cocoa and sugar."
At the UNCTAD IV Conference in May 1976, the NIEO proposals after some changes were adopted as Resolutions, with only the US and the Federal Republic of Germany voting against them.
It is important to note that the NIEO never became much more than a rallying cry for the South. This failure stemmed partially from of the South's lack of power in world politics, and partly because disparities within the South created divergent interests among the member States. Also it became apparent that many of the proposed commodity schemes were not simply a proposal for stable prices, but, instead, high prices. As such, the financial costs of implementing these programs were way beyond anything the advanced countries were willing to fund.
The divergence of developmental priorities amongst developing countries, especially between the South East Asian countries and their Asian and African counterparts unfolded in a big way during the last phase of negotiations of the Tokyo Round of the GATT. During this Round, one saw that developing countries were no more ready to speak the same language on cross-sectoral issues, and were even ready to form alliances with developed nations on sectoral issues.
The decade of the seventies ended with the second "Oil Shock" of 1979. This increased tensions between the US and the countries comprising the Oil and Petroleum Exporting Countries (OPEC). Significantly, the rising oil price also made more than a reasonable dent in the economic growth of a number of oil importing developing and poor countries aggravating their debt problems. This was because 'Nopecs' and OPEC countries could not work together mainly because of the ruling elites of the latter, for their survival, remained very much dependent on the military might of the West. Hence during the seventies, the petro-dollars kept on being recycled to the Western Commercial Banks, while 'Nopecs' were slowly but steadily pushed into a severe balance of payments crisis.
The tale of indebtedness and responses of governments and institutions
From the above discussion it becomes clear that during the decade of the seventies, the international commercial banks were flush with petro dollars and were willing to lend them to any country. This triggered a race to borrow amongst the African and the Latin American nations who desperately wanted dollars to arrest growth deceleration of their 'oil shocked' economies.
Within a few years huge sums were dished out by these banks to many African and Latin American countries, most of which were under authoritarian and corrupt leadership. This meant siphoning of a large chunk of borrowings for personal kitties. International banks kept on lending to these countries in spite of being aware of these issues. Importantly, these commercial banks insisted on repayment guarantees by the governments and hence faced zero risk in terms of recovering the amounts they had extended. Indirectly this meant that, if a country defaulted, private debt of corrupt officials would automatically get transformed into public debt.
Witness the following figures. The lending by private international banks to least developed countries (LDCs) rose dramatically from US$ 14 billion in 1973 to US$ 57 billion by the end of 1980. Interestingly, by the end of 1982, nine US banks controlled 60 per cent and the top 25 US banks controlled 80 per cent of private international bank lending.
But this kind of crony capitalism had to collapse and it did, but sadly affecting the people and the not the cronies. During the first half of the eighties, the international banks suddenly realised the amount of risk they were actually facing with respect to their investments in these countries and became parsimonious with their money. They made an exit from the host countries with a 'herd mentality' and this was the last thing the citizens of the host countries expected. The situation worsened with a continuing slump in the world demand for agricultural exports and their prices. Hence, the lenders actually exited from LDCs when they actually required money. The credit rating of the LDCs took a nosedive and they were denied any further loans.
To make things worse, the beginning of the Reagan and Thatcher regimes in the US and UK (in 1981) respectively, signaled the beginning of a high interest rate regime accompanied by a fall in prices, thus accentuating the debt burden, as most loans were subject to variable interest rates. Government-to-government assistance was also severely curtailed, which added to the debt burden of LDCs.
Given the policy stance taken by US and other developed nations like the UK, it becomes all the more important for us to unravel as to whose interests were these governments trying to protect - the debt ridden people or international bankers.
After Mexico publicly declared bankruptcy in 1982, IMF and the WB under pressure from the US Treasury stepped in with fresh loans. But there was a clear understanding between the IMF/WB and the Mexican government that a part of these fresh loans would be used to repay the private bankers. Needless to say, the extension of such loans was tied to 'stablisation' package of the IMF and the 'structural adjustment programme' of the WB.
Although the official motive of the WB and the IMF was to help Mexican government resolve the crisis, the major concern of these institutions was to save the international system from bankruptcy. To quote Polak, "In the first phase of this crisis, from August 1982 to late 1985… the primary concern of the major industrial countries was the protection of the international banking system".
Structural adjustment programme (SAP) and stabilisation accompanied debt rescheduling under international agreements, by waiving a part and stretching the rest over a longer period. In both, the Paris Club and the London Club meetings held for this purpose, a precondition for rescheduling was that the country concerned would undertake a combination of a stablisation and structural adjustment packages of the IMF and the WB respectively in order to avoid defaulting bank loan payments.
The debt problem and its impact on geopolitical configuration
The lack of clear political responses from responsible UN-developing country membership with respect to alleviating the debt crisis without negatively impacting the interests of indebted countries shook their faith in the ability of this platform for providing developmental dimensions to future discussions on economic issues. The future of pursuing collective developmental objectives on platforms like the G-77 and the NAM suffered a jolt, as indebtedness further widened the structural gap between developing countries, especially between the debt ridden and the South East Asian Economies who were riding on a high growth path during the entire eighties.
The debt crisis also reduced the bargaining chips with developing countries at the individual as well as at the collective level. This had a chilling impact on the actualisation of the NIEO and several other plans proposed by developing countries to the Economic and Social Council (ECOSOC) of the United Nations. Importantly, this crisis also triggered off a series of political processes that transformed several substantative bodies including the ECOSOC into 'talk shops'. Sadly, the issues being handled by bodies like the ECOSOC were taken up by opaque organisations like the WB and the IMF.
WB and the IMF, for the first time since their inception, using the route of so called rescue packages started impacting the policies governing the 'real' economy of a number of countries. Such country experiences gave these institutions not only greater confidence and space to further 'neoliberal' thinking, but also provided them with concrete opportunities to implement their neoliberal agenda across continents.
Even though no new trade round took place during the first half of the eighties, the debt crisis provided the Quad (US + EU + Japan + Canada) with an opportunity to create the necessary domestic political and bureaucratic climate in different countries to carry forward their trade and investment liberalisation agenda. The medium to do so was provided by the stablisation and SAP of the IMF and the WB respectively.
Understanding the elements of the Stabilisation and SAP, but in the Indian
context
In their efforts for exceeding the "Hindu rate of growth", the Indian governments during the 1980s resorted to large-scale expansion of internal and external debt. Massive defense spending (during the latter half of the eighties), sudden reduction in direct tax rates and overall fiscal imprudence on the part of successive governments dried up the coffers of the government and increased the internal debt sizeably. Importantly, the foreign debt in those years rose from US$ 20.6 billion (Rs 16,000 crore) in 1980, to US$ 41 bn (Rs 49,000 crore) in 1985, and US$ 82 billion (Rs 148,000 crore) in 1990 (as a percentage of GNP it increased from 11.9% in 1980 to 28.1% in 1990), thanks to the mounting current account deficit. Besides, short-term, high-cost, debt became a larger portion of the total debt. At the same time, India's capacity to service the debt declined. Already, India was in a debt trap, needing loans to service loans. Its real economy was unable to pay, by exports of goods and services, for the ballooning imports and foreign collaborations, which successive governments kept on parading as "growth".
According to Bhaduri and Nayyar, "…by mid 1991 the room for manoeuvre to live either on borrowed money or on borrowed time had been completely used up…. In terms of short-term macro-management, however the Congress government, which assumed office after the elections in late-June 1991, had little choice but to negotiate a stand-by arrangement with the IMF. The negotiation of a structural adjustment loan with the World Bank was almost a corollary, given the practice of the Bretton Woods institutions to work in tandem in such situations."
In conformity with the orthodox wisdom of the IMF and the WB, the government set in motion a process of macroeconomic stabilisation combined with fiscal adjustment and structural reform. As expected, the IMF and the WB exhibited their intellectual bankruptcy by suggesting packages that were just the same as those suggested to the Latin American and African countries.
In fact most of these findings also hold water in the Indian context.
Noting the impact of SAP on the policies relevant to rural India, Ghosh and Chandrasekhar (1999) mention that there have been actual declines in Central government revenue expenditure on rural development (including agricultural programmes and rural employment and anti-poverty schemes), as well as on the fertilizer subsidy, in the budgets of 1991-92 and 1992-93 and 1998-99. Some of these cuts, such as that on the fertilizer subsidy, were partially reversed subsequently, but the overall decline in per capita government expenditure on rural areas has remained.
During this decade one has also witnessed substantial declines in public infrastructure and energy investments, which affect the rural areas. Importantly such expenditures are not related only to matters like irrigation but also to transport which indirectly contributes significantly to agricultural growth and productivity through its linkage effects, besides being an important source of rural employment. This decade has also witnessed reduced transfers to state governments, which have been facing a major financial crunch and have therefore been forced to cut back their own spending, particularly on social expenditure such as on education and on health and sanitation. Quite apart from their welfare implications, such spending has been found to be providing an important source of public employment over the 1980s.
Besides the above-mentioned failure in understanding the sectoral aspects of the Indian economy, IMF/WB committed a major blunder when it came to understanding the macroeconomic pulse of the country. By asking the government to reduce its expenditure and deficit, it did not realise how negatively this suggestion would affect capital creation, which would in turn negatively impact variables defining purchasing power of the private and public sector. This fall in purchasing power meant a shrinking market at home for selling goods, typically leading to loss of income and employment.
Constrained by the compulsions in meeting the large committed non-plan expenditures, the State started financing non-plan expenditure through cutbacks in developmental expenditure. Hence developmental expenditure, which constituted 70.7% of the total expenditure during the eighties, fell to 65.4% during the nineties and was at 62.7% during 1998-99. In order to fulfill their developmental agendae states increasingly resorted to borrowing over the last few years and hence the debt-to-GDP ratio of states has steadily risen from 17.6% in 1980-81 to around 20.5 during 1999-2000.
Donor agencies, bureaucrats and politicians cleverly used these debt figures and growing tensions between centre and states with respect to sharing of funds to launch structural adjustment programmes in various sectors at the state level. State governments started using their constitutional right to independently negotiate with donor agencies like the World Bank and the Asian Development Bank in which state authorities have had no experience. More so, processes such as privatisation of utilities and resources that concern the lives of millions started being initiated without a proper public debate and without understanding the view of stakeholders that are centrally involved in each of the charted processes.
While guarantees do not form part of debt as conventionally measured, in the eventuality of default, this has the potential of aggravating the debt position of governments, if their total liabilities have already hit the roof. According to the RBI, "Guarantees have emerged as an alternative fiscal instrument of the (Central) Government to meet the investment requirements by the state level bodies. However a persistent growth of this liability, if unchecked, would turn out to be an important source of fiscal distortion".
Messing up with the Trade Agenda…
In the area of trade liberalisation, the WB and IMF, while clearing the first tranche of loans, mentioned upfront that the Indian government would have to bring down high tariff walls and abolish quantitative restrictions in order to receive further assistance. Furthermore, it was hinted that the best way Indian government could politically sell this 'trade liberalisation' package was by accepting the 'Dunkel Draft' with some tinkering and by subsequently becoming the Member of the proposed World Trade Organisation. It must be noted that even though there was lot of hue and cry in the country on various aspects of the 'Dunkel Draft', the then government did not find it necessary to consult the people before signing the GATT (1994), an agreement that symbolized the end of the Uruguay Round and the beginning of multilateral trading system with WTO as its regulator.
Legitimising their stand with respect to accepting the WTO membership, the then government used figures worked out by the WB and other think tanks of the world to show how Indian agriculture and textiles and clothing industry (where a large number of people of this country are employed) would benefit due to liberalisation of trade in both these sectors. Our farmers were told that due to reduction of subsidies in the West and due to opening of trade in agricultural commodities, the prices of their products in the international market would increase substantially. Similarly our textile and clothing industry was told that in the new trading regime developed countries would open up their markets by dismantling quotas under the Multi Fibre Arrangement (MFA) and this would provide Indian exporters with great exporting opportunity.
To the greatest dismay of the Indian farmers, weavers and workers in these sectors, the bureaucracy in the concerned ministries either out of compulsion or due to cooption or due to apathy, blindly accepted these figures without analysing the 'a-political assumptions' on the basis of which they were calculated. Furthermore, very few of them really bothered about issues pertaining to accountability vis-?-vis implementing the necessary domestic policy measures to safeguard the interests of these sections. One can say that the democratic deficit that existed when the government decided to become a WTO member could be one of the reasons for nurturing such a mindset.
But five years since the WTO was established we are facing a situation in which governments of the developed world are busy protecting the interests of even their small but influential textile and agriculture lobby.
For example, Indian exporters in the area of textiles and clothing are continuously losing their confidence with respect to accessing markets in the European Union given the rampant imposition of anti dumping duties on exports of bed linen, unbleached cotton fabric etc. Coupled with this, the member countries of the EU and the USA have not been implementing the Agreement on Textiles and Clothing in its letter and spirit.
In the area of agriculture we are stuck with disastrous agreements like the Agreement on Agriculture, Agreement on Sanitary and Phytosanitary Measures, and other instruments in various other instruments (all a part of the GATT (1994) package) which mention that developed countries need to protect the interests of the developing ones by reducing subsidies and opening markets, but do not contain language that would compel them to do so. It is this window that has been so persistently used against agricultural interests of developing countries including India. For example the subsidies that the US farmers get and which are WTO compatible have almost doubled from their base year (1988-89) figures. It is shocking to note that both EU and the US extend subsidies to the tune of US$ 353 billion dollars to their farmers. Let us take the example of soybean: the US government at present pays US$ 193 per ton to US soybean farmers, which is in fact higher than the average soybean price of US$ 155 per ton for the past few years. Importantly, it is this artificially low price soybean being imported at low import duties that is responsible for destroying India's edible oil industry displacing millions of farmers and others involved in oilseed production and processing.
Emergence of non-tariff barriers and helplessness of WTO to deal with many of these has been continuously eroding the confidence of India in the multilateralism of this system. Over the years one finds that these non-tariff barriers are multiplying and more so their application does not respect India's developmental requirements. Examples like the 'shrimp-turtle' dispute show how measures taken and decisions reached at the WTO are aimed towards maintaining its image in western constituencies by destablising the developmental fabric of India and other developing countries go unchallenged.
This issue also rings alarm bells with respect to the way in which the dispute settlement system of the WTO is slowly but steadily gathering strength. A detailed analysis of adjudications at the WTO concerning environment (e.g. 'shrimp-turtle' dispute) reflect the callous attitude of the emerging system towards livelihood concerns of developing countries. More so, the growing power being bestowed on the dispute settlement system is ridiculing the importance of diplomatic ways of finding solutions to issues. An interesting case study in this regard is the way in which India has to hastily give up its quantitative restrictions (QRs). In fact, India had actually negotiated a later date (April 2003) with Australia, EU and Japan, but now has to remove QRs before April 2001, as per the adjudication of the Dispute Settlement Body on the case filed by the US.
Summing up the Indian experience one may say that agencies like the WB actualize
their 'one size fits all' neoliberal agendae based on globalisation, liberalisation
and privatisation and in fact end up legitimizing undemocratic processes of
decisionmaking in close coordination with polity and bureaucracy of the host
country.
As we come to the end of our discussion it would be interesting to see as to
how have people worldwide reacted to emergence of such processes.
Peoples' wrath…
Although civil society has been protesting from different corners of the world against the illegitimacy of the emerging socioeconomic and political scenario, one had to wait until they really got together to fight against the proposed Multilateral Agreement on Investment (MAI). MAI, which has been described as charter dictated by transnational corporations to trigger limitless privatisation started being negotiated amongst the countries belonging to the Organisation for Economic Cooperation and Development (OECD) during 1995. US wanted a 'state-of-the-art investment treaty, a demand that was not addressed by the Agreement on Trade Related Investment Measures (TRIMs) at the WTO and hence decided to get it in the form of an MAI.
When people in the OECD countries and those living in non-OECD countries realised the dangerous implications of allowing such precedents to be set in the area of negotiations they protested from all corners of the world. Some groups took on them to analyse the MAI in order to point out the harmful developmental implications such an agreement would have on countries using frameworks like the one on human rights, whereas some just spread this analysis by hosting 'anti-MAI' websites and by creating 'anti-MAI' list serves. It was this unique complementarity as well as supplementarity between the efforts of civil society that really quashed the MAI. In fact this effort of the civil society worldwide sent a clear message to the negotiators that they could not take people for granted, any more.
As various GATT (1994)/WTO instruments started being implemented, people also realised the negative impact of these instruments on the environment and more importantly on their livelihoods. Taking inspiration from the success of the MAI, civil society, although fragmented this time, decided to use their campaign against the WTO to highlight the illegitimacy associated with various socioeconomic processes unleashed as a result of globalisation, privatisation and liberalisation. This time the protestors took to the streets and even succeeded in derailing the Seattle Ministerial Conference.
The happenings during the East Asian Crisis, which began during 1997, exposed the fallacy of 'neoliberal' packages suggested by the IMF and the WB in the area of implementing stable developmental regimes. Furthermore, the crisis once again showed how the US Treasury and US based financial institutions used IMF and the WB to safeguard their interest. A quick analysis of the measures taken in the area of foreign direct investment, portfolio investment done by experts also reflect how Asian assets would be slowly moving into the hands of US-based financial institutions. Disgusted with such measures, the people protested at Prague in large numbers during May 2000 and made the IMF and WB wrap their sessions earlier than the normal schedule.
Some groups have also tried to use independent bodies within the UN system to expose the fallacies associated with multilateral instruments. This is very much evident from the recent resolutions passed by the UN Sub Commission on Human Rights criticizing the Agreement on Trade Related Intellectual Property Rights (TRIPs) for violating basic economic, social, cultural and political rights of citizens across the globe.
At the national level too, there is growing recognition of the fact that a synergistic approach would be required for reversing the forces of globalisation liberalisation and privatisation. Organisations are busy searching time-tested frameworks to not only provide strength to their arguments but for also providing workable alternative economic systems that would respect developmental dimensions of societies. The overall growing support to causes of pressure groups like fishing community, farmers, landless labourers et al suggests that groups are trying to understand broader concerns rather than being concerned about their own constituencies.
Another prominent feature of these struggles is that they are now transcending boundaries of classes. Which means that movements (barring a few orthodox ones) are realizing that the forces of globalisation, liberalisation and privatisation are marginalizing people across classes and creating a new hierarchy in society, which would be far more dangerous and far more difficult to get rid off.
In conclusion…
Analysing movements in geopolitical relations is becoming more and more complex as increasing number of countries are dumping ideologies and are ready to experiment with any strategy that would deliver goods in the short term without being actually bothered about the long term impacts on issues like inequality etc. One finds that institutions like the WB and the IMF have successfully tapped this vulnerability to propagate their neoliberal agenda. Even the developed countries have cleverly politicized this vulnerability to their benefit and have used institutions like the IMF and the WB to attain global political objectives. The proliferation of trade and investment liberalisation and institutionalising the same by establishing the WTO is a classic example in this regard. The sad part of the story is that polity and bureaucracy of developing countries is all ready to join the bandwagon once they are aware of the goodies (for themselves) associated with proliferating the neoliberal agenda
People and their movements have slowly but steadily started realising this nexus. They have also realised that polity and bureaucracy are trying to provide legitimacy to the neoliberal agenda in their countries by promising a bright future. But the impacts of the SAP across continents, the way in which OECD countries tried to negotiate the MAI and the 'implementation concerns' associated with various GATT (1994)/WTO instruments have exposed the truth. And after understanding the truth, people have not looked back and if required have also come out on streets in thousands.
Now the quest is going on to provide viable alternatives and time-tested frameworks in which these alternatives can be firmly grounded. This, in fact, is going to be the greatest challenge before activists in the years to come.
It is in the context of evolution of such alternatives that the role of the social work professionals assumes importance. Given their exposure to many 'human' and not necessarily 'economic' issues that are surfacing as a result of interaction of socioeconomic and political forces at the domestic and international level, they are in a better position than so many others to provide qualitative dimensions to these alternatives. But in order to provide a cogent and a people friendly alternative, it is essential that they equip themselves and their student community with various facets of the debate on globalisation, privatisation and liberalisation both in the domestic and the international context. This could be done by incorporating modules on these issues in the regular curriculum and also by assigning projects to students on the same. Beyond this, institutes imparting courses in social work should institutionalize events that can provide a platform for discussions between social work professionals and academics and policymakers from finance and commerce ministries.