|
Gamani
Corea, former Secretary-General of UNCTAD, describes strategic options
for more effective developing country participation in the new global
order.
The
question is being asked: "What is the significance of South-South
cooperation in a background of globalisation and liberalisation
in the world economy?" Do these trends reduce the importance
of such cooperation, even making it redundant, or is there still
a strategic and catalytic role for the process? The answers to these
questions must surely depend on the nature of globalisation and
liberalisation, on the one hand, and on the rationale of South-South
cooperation on the other.
There
are some who see globalisation and liberalisation as virtually the
complete answer to the challenge of development. It is depicted
as a fast express train that developing countries should board to
be taken to higher levels of development. Those that fail to do
so would be left behind and marginalised. it is argued that the
developing countries themselves must take actions that will ensure
the benefits of globalisation and liberalisation - actions such
as deregulation, privatisation, openness to outside investment,
fiscal and monetary discipline, and so on. In this context, North-South
negotiations, international development cooperation, and even South-South
cooperation, are no longer among the imperatives for development.
If they have a place at all it is for dealing with the problems
of the least developed and the most disadvantaged countries. For
the others the compelling need is to integrate into the global economy.
There
is little doubt that some recent trends in the world economy present
opportunities for the developing countries that can help accelerate
the tempo of development. The lowering of barriers to world trade,
the increasing mobility of transnational corporations, the decentralisation
of production processes, the linking-up of capital markets, and
dramatic technological improvements in such strategic fields as
communications have served to enhance the integration of the global
economy and to widen options for national economies including those
of the developing countries. The latter must seek to profit from
these trends since they greatly modify some of the earlier compulsions
that favoured relatively inward-looking scenarios for development.
This does not point, however, to the pursuit of undiluted laissez-faire
economic policies - a point that has been proved by the success
stories among developing countries in recent times. But it does
call for pragmatic policies that link the build-up of national capabilities
to opportunities provided by the world economy.
The
process of globalisation and liberalisation is not, however, a complete
answer to the need of developing countries for an external economic
environment that is supportive of development. In the first place,
the process is by no means complete. Despite increasing linkages
it is premature to speak of an integrated global economy. There
are still barriers to trade, to the flow of capital and, notably,
to the movement of labour. Even the advances made in recent years
are liable to reversal if economic circumstances, particularly in
the developed countries, turn adverse. In such situations restrictive
barriers could re-emerge that reverse the trend of widening opportunities
for the developing countries. secondly, closer integration can result
in greater instability and heightened fluctuations and increase
still further the vulnerability of the developing countries. Despite
globalisation and liberalisation these countries have still no say
in the macro-economic management of the global economy. Their ability
to safeguard their own interests in multilateral negotiations in
such areas as money, finance and trade also remains small.
Third,
and perhaps most important of all, the impact of the benefits of
globalisation and liberation on the developing countries has been
highly uneven and the disparities and imbalances can well increase
as the process advances. Virtually all developing countries have,
in one way or another, been adapting their domestic policies in
recent years to the needs of liberalisation and openness to the
world outside. The dividends, however, have been distributed unevenly
underlining the obvious fact that market forces channel activities
to where returns are high and not merely to where barriers are low.
It should not be forgotten that policies of openness and liberalisation
were pursued for long periods by many of the former colonial territories.
This resulted in a kind of integration into the world economy through
participation in commodity trade. But it did not lead to industrialisation
or end the dualism in their economies. Nor did it lead to greater
equality among trading partners.
The
rationale for south-South cooperation needs to be viewed in the
light of these varying elements of the new scenario. Certainly the
logic of earlier times needs to be modified. In the sixties, for
example, South-South cooperation was seen as a means of promoting
industrialisation through import substitution on a sub-regional
basis. The closer integration of national economies would provide
larger markets that made possible the economies of scale. Present
trends, however, give room for different strategies of development.
The improvement of market access globally and the opportunities
for export that come with it provide scope for wider participation
in the world economy. Hence, production structures of developing
countries could be oriented towards global as well as regional and
domestic markets.
What
then is the logic of South-South cooperation in the new setting?
The answer calls for a distinction between South-South cooperation,
pursued consciously through the collective actions of developing
countries, and the spontaneous growth of South-South linkages that
could result from the acceleration of growth rates in the context
of globalisation and liberalisation. Industrialisation and the greater
diversification of production structures that accompany rapid economic
growth will tend to enlarge market driven opportunities for trade
and other exchanges between developing countries even in the absence
of conscious cooperation policies. This has been the lesson of history
borne out by the experience of the industrialised countries and,
more recently, by some of the developing countries themselves. Indeed,
it is unthinkable that all the export surpluses of the developing
countries that accompany growth will be absorbed by the developed
countries alone. A growing share will need to be exchanged among
the developed countries themselves.
The
crucial question, however, is whether such spontaneous linkages
among developing countries could be relied upon to unfold with such
effectiveness and speed as to provided significant impulses to their
economic growth. If the impact of globalisation and liberalisation
is partial or delayed the logic of conscious actions to promote
South-south linkages to further accelerate growth becomes compelling.
such actions need not, in the present context, aim at some kind
of autarchy or self-contained growth whether on a sub-regional,
regional, or even inter-regional basis. They should seek rather
to profit from such opportunities that globalisation and liberalisation
might provide as well as to overcome the limitations of the process.
They should aim, in other words, at consciously speeding up and
supplementing the South-South linkages that are likely to emerge
spontaneously as the economies of the developing countries expand.
Both the logic of and the compulsions for South-south cooperation
will thus acquire a new dimension in the changed setting of the
global economy.
The
changed rationale for South-South cooperation has implications for
the instruments of cooperation. Virtually all developing countries
today belong to sub-regional, regional and even inter-regional groupings
of various kinds. Such groupings have launched a number of activities
and programmes of varying degrees of effectiveness covering economic,
technical, social, cultural and other fields. In recent times the
instrument of preferential trade among group members has received
special attention spurred in part by the world wide trend towards
trade liberalisation. A number of sub-regional groupings have committed
themselves to creating preferential and even free trade areas.
The
question is sometimes raised concerning the logic and effectiveness
of intra-South trade liberalisation in a setting in which barriers
to trade are being in any case lowered on a "most favoured
nation" basis - both through multilateral trade negotiations
in GATT/WTO and through unilateral actions by the developing countries
themselves under the aegis of structural adjustment programmes.
Clearly, intra-South trade liberalisation becomes superfluous in
a world of universal free trade. But, in fact is, that despite recent
progress there is no universal trade and no certainty as to when,
if ever, it would be achieved. In the meantime intra-South trade
liberalisation by developing countries can serve two ends. It can
stimulate economic growth by improving access to, at least, each
others markets and, at the same time, serve as a "fast track"
in a setting of more measured progress towards liberalisation in
the global context. The enlargement of markets through intra-South
trade liberalisation can encourage investment, both local and foreign,
and impact positively on technological progress. It can, thereby,
enable developing countries to take better advantage of the opportunities
provided by globalisation and liberalisation. The logic of these
arguments is relevant to sub-regional, regional and inter-regional
trade cooperation.
The
creation of preferential or free trade areas within the South is,
however, only one aspect of South-South cooperation. Sub-regional
and regional groupings are also a means of strengthening political
and other ties among developing countries and of relieving tensions
and conflicts that might have arisen in the past. The "centre-periphery"
relationship of the Colonial era minimised intra-South contacts
even among neighbouring countries. Globalisation and liberalisation,
to the extent that it accelerates diversification and economic growth,
may promote closer ties among developing countries but, as in the
case of trade, such ties need to be consciously established and
strengthened through South-South cooperation. The lowering or removal
of trade barriers through preferential or free trade areas can be
supplemented by a number of other cooperative arrangements to promote
investment flows, joint ventures regional infrastructure development,
science and technology, human resource development, and so on. The
revolutionary developments in communications and information technology
offer new vistas that provide a major role for technical cooperation
among developing countries. There is now a vastly enhanced potential
for the sharing of experiences and expertise and the widening of
contacts among such countries. The lessons of both divergent growth
performances and of problems shared in common can be better disseminated
among developing countries than even before. Technical cooperation
among developing countries can thus assume major new dimensions
at all levels of South-South cooperation - sub-regional, regional,
and inter-regional. The impact of globalisation and liberalisation
on the developing countries will itself enlarge the scope for such
cooperation.
The
impact of globalisation and liberalisation on South-South cooperation
is not the only issue. Recent years have witnessed the emergence
of cooperation groupings that link up the major industrialised countries
of the world with some, but not all, developing countries. Such
"mega bloc" as the European Union, NAFTA and APEC include
developing countries either as members or as partners enjoying special
relationships. They aim at preferential or free trade arrangements
among the participants that overlap or cut across the arrangements
of South-South groupings. This development, whatever it merits,
runs counter to the concept of "generalised" preferences
for all developing countries that won acceptance as far back as
1964 at UNCTAD I and that came, since then, to be incorporated,
as the Generalised System Preferences - the GSP - into the tariff
regimes of the developed countries. It raises the problem of the
exclusion or discriminatory treatment of non-members of these groupings
by their members, be they developed or developing countries, as
well as of "patron-client" relationships among the members
themselves. Issues such as these are made even more complex by the
membership of individual countries in multiple cooperation groupings
and arrangements.
All
this points to the need for giving special attention to the implications
of these trends for South-South cooperation at all levels - including
the initiative for a Globalised System of Trade Preferences, open
to all developing countries, the GSTP. There are some who see the
new developments as a kind of "open regionalism", a fast
track on the road to universal free trade. But there are also concerns
that such developments may result in a fragmented world trade system
that retards globalisation and liberalisation and that undermines,
at the same time, the dynamics of South-South cooperation. There
are suggestions that the "mega blocs" should extend the
benefits of preferential market access to all developing countries
while expanding progressively their developing country membership.
There are also suggestions that South-South groupings within these
larger blocs could still find areas for fruitful cooperation among
their members.
There
is one aspect of South-South cooperation that attains a new urgency
and relevance in the background of globalisation and liberalisation.
This is the need for developing countries to strengthen and reinforce
their effectiveness in multilateral processes and organisations.
All developing countries have a stake in a global economic environment
that is supportive of development. Yet no developing country by
itself, whatever its size, has the capacity to determine the nature,
let alone the outcome, of the various negotiating processes that
shape the course of the world economy. The strength of the developing
countries in multilateral institutions lies in their numbers and
this strength needs to be mobilised. the creation of the Group of
77 in 1964 did, in a sense, launch the North-South dialogue. But
in recent years, with the growing vulnerability of developing countries
to external developments and their preoccupation with internal policies,
the Group has experienced a decline in cohesion and effectiveness.
The need to face up to and reverse this situation is a challenge
to South-South cooperation. The challenge is substantive as much
as organisational. The developing countries need to re-state and
recast their negotiating platform. Many of the themes and objectives
of earlier times remain valid. But new issues have also arisen and
even old issues need to be re-stated to reflect the present changed
scenario. The purpose of the platform would be to contribute to
the quest for solutions that would gain universal acceptance, by
the North and South alike. Preparedness for multilateral negotiations
is thus a major dimension of South-South cooperation. It has acquired
a new urgency in the context of trends towards globalisation and
liberalisation.
Globalisation
and liberalisation have not made irrelevant the groupings of industrialised
countries and the cooperation arrangements between them. Likewise,
the new trends should not be allowed to undermine the validity of
cooperation among developing countries, whether at the sub-regional,
regional, or inter-regional levels.
-
Globalisation and liberalisation is depicted as a fast express
train to higher levels of development.
- The
impact of the benefits of globalisation has been highly uneven.
- There
is no universal free trade and no certainty as to when, if ever,
it would be achieved.
- Need
for developing countries to strengthen their effectiveness in
multilateral processes and
Top
|
