Union Talks On Free Market Effect

Date: 06 August 2002

A United Nations Roundtable WSSD Prepcom in Nigeria has emphasized the need for trade and development discussions at the World Summit on Sustainable Development in Johannesburg to avoid the narrow 'free market' approaches that have dominated so much of the global development agenda for the last 25 years.

The meeting organized in Abuja, Nigeria 18-19 July by the UN Development Programme (UNDP) brought together a wide range of stakeholders from all sectors and regions, as well as a number of important international agencies. Winston Gereluk, International Confederation of Free Trade Unions (ICFTU), represented trade unions.

According to Gereluk, the two-day meeting produced extensive criticism of a generation of 'free trade' policies that were guided by the single-minded conviction that unrestricted market access, deregulated investment and the global integration of markets would deliver the greatest economic and social benefits to the world.

This narrow 'free market orthodoxy' was the basis of many of the structural adjustment policies and conditionalities imposed by the World Bank, the IMF and other international financial institutions and development agencies.

The general tone of the Abuja meeting provided further evidence of a growing consensus that this free market approach has failed to live up to its promises, said Gereluk.

The obvious failures of this development framework and the need for new approaches have been most clearly displayed in Africa, rendering the setting for the Roundtable particularly appropriate, he said.

During the 1960 - 1980 period, for example, when development policies of African nations still rested on such mainstays as tariffs and import substitution, per capita income grew by almost 35%. By contrast, the free market policies and attitudes that completely dominated African development since 1980 have produced an overall drop in per capita incomes of over 20%.

The evidence of human misery and environmental degradation can now be seen everywhere, in Africa and the rest of the developing world. Disease, malnutrition, and hopelessness have even driven down life expectancy rates in a number of African countries, after they had risen steadily during the previous period.

DISTORTED PATTERNS OF DEVELOPMENT

The general consensus emerging out of the Abuja meeting was that the globalisation of the last twenty-five years has produced greater inequality between and within nations, greater insecurity for their human populations, and accelerated degradation of the natural and social evironment.

In fact, it has failed to deliver on even its most basic promises, as in many cases, overall economic growth suffered.

The evidence shows that, instead of sustainable development, free market policies have produced 'distorted development'. Nowhere has this distortion been more evident than in the area of employment, as workers steadily lost
the bargaining power they need to secure decent wages, working conditions, and the right to participate in decision-making.

Since 1980, large segments of the world's workforce have been driven into substandard, marginal, underpaid work, with a growing 'peripheral workforce', in developing countries and industrialized countries alike.

In addition, several speakers at the Abuja meeting targeted the decision-making or 'governance' models that have come to be associated with trade liberalization.

There is a growing awareness that a lack of transparency and democracy are amongst the main reasons why globalisation has failed to achieve legitimacy or acceptance it requires, as was most evident in the protests that have greeted meeting of the World Trade Organisation, the World Economic Forum, and the G-8.

Recent corporate scandals and collapses, with news of corruption at the highest levels, have
only added to the overall collapse of faith in the multilateral trading and financial systems of the world.

Notice was also taken at the Abuja meeting of the extent to which the capacity of sovereign states to enact balanced development policies has been affected by recent investment and service agreements.

The definition of 'trade', for example, has been greatly expanded in such new developments as the new General Agreement on Trade in Services (GATS), which threaten to open a whole new range of services, including 'environmental services' and water, to the free market.

A framework of international rules on trade and investment has grown around WTO agreements, regional agreements such as NAFTA, and a multitude of bilateral investment treaties (BITS), which explicitly limit the latitude of national governments to act in the public interest.

In addition, new enforcement procedures allow corporations to take governments before private dispute tribunals, whenever they enact laws or regulations that in any way damage or discriminate against foreign businesses.

GOVERNMENTS & INTERNATIONAL BODIES MUST GUIDE DEVELOPMENT

In what would have been considered heresy only a few years ago, a consensus is growing that governments and international organizations must adopt a more active role if the goals of sustainable development are to be
achieved.

Instead of being ends in themselves, trade and investment must be designed to serve a broad range of development goals; indeed, all evidence
points to the conclusion that balanced domestic development is a cause, not an effect, of increased trade and investment.

Agreement is also emerging that the unregulated trade liberalization policies of the last quarter century need to be challenged to restore the
political will and decision-making ability of governments to achieve the ecological and human goals of sustainable development.

While private players have an important role to play, balanced development can only be assured if these initiatives take place in a context of rules led by government policy.

Gereluk was impressed at the tone of the discussion at Abuja and the potential for change it represents. The UNDP is the leading UN agency on matters relating to trade and investment, he said, and if agencies such as this comes to the WSSD prepared to challenge some of the most basic ideasunderlying globalisation, the implications can only be positive.

"Abuja reflected some of the most basic concerns that the trade unionmovement has been bringing to CSD Sessions and WSSD Prepcoms," said Gereluk. "Up to now, however, free market thinking has been so firmly in control, that we have had little success in promoting our point-of-view."

"We are happy to see that this is changing, and believe that the implications for the Social Dimension could be enormous. Trade unions will
continue to do their best to convince the international community that coherent employment policy must be at the center of any government-led development efforts to eradicate poverty."

"In this regard, only balanced forms of development are capable of alleviating poverty, as only they can provide the kind of decent, secure employment that is required. Core Labour Standards, as contained in the ILO Declaration on the Fundamental Principles and Rights at Work, must be at the centre of efforts to achieve rapid and sustained reductions in the level of poverty in the world."

"It was also gratifying to hear expressions of support in Abuja for the International Labour Organisation, and the important role it must play in guiding the world to a more balanced form of development. This is particularly timely, as the World Commission on the Social Dimensions of Globalisation has now begun to hold its hearings on this subject."

"Our meeting also agreed that much more research and analysis are needed to provide the basis for the type of governance that sustainable development requires. At the WSSD, trade unions will be outlining the important role that workplace assessments can play in this area, as joint assessment, target setting, evaluation and reporting can feed directly into national and international reporting on WSSD outcomes."

Gereluk regretted that the Abuja meeting stopped short of taking a definitive stance on the need for strong public management and control of water resources and services.

"The corporate agenda clearly points to the privatisation of water on a global level. All around the world, communities are losing control of this vital public resource, and it became clear to me, while listening to some of the presentations in Abuja, that the process is well underway in Africa," he said.

"The trade union movement is committed to keeping the supply of drinking water - a vital human need - in the public domain. Water, together with
such essential services as health, education and social assistance, is a basic public good, and needs to be kept out of the hands of unregulated private monopolies who stand to reap enormous profits if they succeed in gaining control."

For further information

Contact:	Winston Gereluk, Public Services International, Canada
Union:	Labor Council of NSW
Phone:	+780.436-1976
Email:	winstong@athabascau.ca

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