The politics of globalisation

POLITICIAN, economist and teacher all rolled into one --Johannes Pieter Pronk, better known as Jan Pronk, is in his second term as Netherlands minister for development cooperation. He has held the position of deputy secretary general of UNCTAD and has been closely associated with a job as challenging as the restructuring of the UN, in his role as deputy chairperson of the committee. An expert on development programming and various aspects of international economic order, with views far removed from the stuff that international expertise is made of, Jan Pronk spoke to Down To Earth on his vision of the world 20 years hence and the economic and political factors that will bring about the changes. In a fast changing world where social democrats are looking for more specialised market economies, he spoke on globalisation, aid flows, recession in the West and the vital aspect of UN restructuring, which he says will affect the future of the world

 
By Sumanta Pal
Published: Saturday 04 July 2015

How do you see globalisation as a phenomenon, particularly where globalisation will mean only economic integration, and not a political one?
Globalisation has a number of dimensions, which are now more or less integrated. Personally, I don't think globalisation has brought about only economic integration. Political integration has also taken place. This is not to say all economic powers have been integrated equally, but the process has been initiated already.

All economies are biased in favour of those who have access to markets because the producers of finished goods need markets for their products. There are, therefore, some countries that benefit from their entrepreneurial activities. On the other hand, there are those developing countries that are used as a dumping ground for finished products. However, these economies also provide the bigger nations with raw materials.

In the process of globalisation, even the production of commodities gets transferred to the smaller nations and the bigger nations thus have greater access to the markets and, in the bargain, make inroads into the economies of the smaller nations. But matters don't rest there. The marketing outlets are far away and as things stand, even if we assume the process of globalisation to be fast, it will take a long time before a large part of the population in far flung areas have access to commodities. Globalisation will also depend on the income distribution and the purchasing power of the market. I don't think that this will change dramatically. A society takes considerable time to adjust its buying power. I think the process of globalisation cannot be seen only from the viewpoint of the countries that are trying to expand their markets. The extent of globalisation will also depend on the consumers of the countries where the goods are being marketed.

However, there is a silver lining. In the interest of globalising their economies, nations will try and stabilise their political structures and this, in turn, will stabilise the economies. One also hopes the world will be in a better position to carry out economic changes that will be more receptive to the processes of globalisation. Government policies will be strengthened in particular by ecological awareness because development should not be based only on stability, but also on sustainability. Governments will have to keep ecological constraints in mind in order to ensure the continuity and stability of their economic policies. Notions of self-interest need to be tempered by an awareness of ecologically sustainable policies.

In this context how do you see the world 20 years hence, following the impact of globalisation? Do you see an end to inequality and poverty?
It's easy to talk in terms of a changed world particularly when one talks of a 20-year time frame. But the fact is there are problems that cannot be solved because the nature of the problem keeps changing even as one changes strategies. Beyond a point there's precious little one can do. If you ask me, the end to poverty, or for that matter inequality, can come with a twin process -- it cannot be just self-determination because self-determination will be oriented towards building an independent economy. It would not add anything to a policy geared towards removal of inequality. Removal of poverty also requires pressure from above. Definite measures need to be adopted by countries where poverty is predominant and other governments need to look into the various aspects of poverty and the role of inter-governmental organisations in the war against it. But under no circumstance am I suggesting a top-down policy. Pressure from above has to balance pressure from the bottom to make policies sustainable. People's participation can give direction to governmental efforts to curb poverty.

What you are essentially suggesting is a two-way process.
Let's take the case of the Northern countries, which happen to play an important role in this. However, let me emphasise that this is no longer a geographical issue and requires as much initiative from the North as from the South.

I agree with you. But I would have thought that even within the North the social democrats were pushing for a more specialised market economy. What do you think the role of the state would be in the future?
At the moment, we are at a very interesting stage where economics is getting more and more diversified and globalised. Efforts are on to bring the institutions that have been built after 1945 within the framework of national welfare states. Reforms are critical in a situation where those who were responsible for the institution of national welfare states are actually being blamed for their failure to sustain themselves on their outdated policies. Small wonder social democrats are pushing for changes in their policies. Moreover, nations are questioning the adoption of stop-gap policies. Some national social democratic movements have withered away because their political foundations were weak. In quite a few countries the people opted for social democracy because they were afraid of communism. Therefore, the option for social democracy was more a compulsion than a choice. But with the fall of communism, it is now possible for social democracy to gain a stronger political configuration. I don't expect too much from the social democratic movement as it has yet to attain international dimensions. However, the impact of the social democratic movement has to be assessed not in the interests of one social class or block only, but the world as a whole.

Do you see a role for the UN in this movement for social democracy?
The UN can institutionalise the processes that can culminate in spreading social democracy. But without a process of enlightenment, we are doomed and to what extent the UN has been successful in initiating such a process is questionable. I agree that in the present system the UN requires a lot of changes. The point is that in a world burdened by vested interests it is important to have an extra-national mandate -- that of the UN -- but the national governments should be specific about their own agenda as well.

The problem is that of a growing cynicism toward the UN. One must realise that the purpose of the UN is to homogenise the interests of the nations. It is not a question of acting 'instead of' or 'above' national governments, but to strike a balance between inputs and outputs in the inter-governmental processes. In order to make the UN system credible, it is necessary to thoroughly restructure it. What its implications would be is open to debate and involves a lengthy explanation. I have been a part of the UN restructuring process and though the precise structure of the UN system remains nebulous, the contours are quite evident. But the UN has a definite role in what you call a movement towards social democracy.

The general feeling is that it's the law and order part that is gaining strength in the UN system. The North actually wants to weaken the UN charter functions dealing with economic and social progress and transfer these funds to the World Bank, the International Monetary Fund or the General Agreement on Tariffs and Trade. How do you respond to this criticism?
I think the whole question has to be seen in the light of the debt being incurred throughout the world. I think debt is no more an economic problem -- it's now a case of political debt. Moreover, the problem of debt is not restricted to a few countries. I wonder if it can even be called a national problem. Debt in fact has assumed transnational proportions. And, political debt has resulted in transnational tensions, as a result of which inter-governmental consensus is being increasingly sought. With the passage of time, debt is assuming newer dimensions with environmental factors being attached to debt burdens.

It's a curious situation where developing countries are being asked to open up their economy and the prices of the resources and commodities produced by these countries will be determined by international factors. Moreover, every time a country is asked to devaluate, it would essentially mean devaluation of a country's natural and labour resource. Under the circumstances, one realises economic issues are being increasingly politicised and so, it isn't surprising the UN's law and order role is being emphasised.

In this context, how do you see the future of aid plans from the North to the South? Is the North concerned about the South's financial and technological requirements? With the collapse of the Soviet Union and the concept of tied aid disappearing with the opening up of markets, how long will the North stick to its financial commitments?
I think the question of aid also has to be seen in the context of globalisation. The signals the market emits at any given point of time reflects the predilections of countries with superior purchasing power or political clout, but globalisation will also mean rapid increase of market economies and will have the West asking for more money. In this respect, globalisation will only mean fund constraints for the West, which would be more interested in turning the disposable funds into investments in poorer nations. Besides, an expanded market will mean higher financial requirements.

On the other hand, such people may not be adequately aware of the concept of the market being sovereign. They may not be endowed with the wisdom to be gentle toward those without purchasing power or be adequately aware of ecological realities. As a result of globalisation, developing countries will have suffered greater ecological destruction and will need more money. Frankly, I don't see any way in which fund flows can actually increase from the North to the South. I am even doubtful whether the amount will remain what it is today.

Do you think your best hopes will come true?
Have I expressed my best hopes? I don't think I have. On the contrary, I think I have been somewhat pessimistic. But let's not end the discussion in a pessimistic way. I do see things happening in the right direction as well. Over the last few years a lot of new concepts, such as the concept of sustainable development, redefining the concept of national sovereignty, and the whole new vision of social democracy, have become topics of discussions in global forums. Market forces have been much more determined than in the past. A lot is of course left to our political wisdom and to the extent that market and social forces are able to combine all that is conducive to growth and is also sustainable.

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