Africa News | The Nation | August 23, 2003
There is first the theory of globalisation. And then there is the reality of it.
If all the states "liberalised" their economies by opening them up to foreign trade and investment, they would all end up benefiting. For in the liberalised global marketplace, each country would focus on those economic activities in which it has a competitive advantage. There would be free movement of resources, personnel, capital and even ideas, and this would lead to prosperity all round.
So the benefits of free trade and the efficiency of free markets are at the core of the globalisation concept. By everyone opening up their borders to the goods and services of all other countries (i.e., abandoning protectionist policies), everybody wins.
That's the theory of it. The reality, unfortunately, is somewhat different. It is perhaps best encapsulated in a passage from the classic History of the Peloponnesian Wars, which Greek historian Thucydides wrote around 400BC.
In it an Athenian envoy addresses a rival delegation as follows: "You know as well as we do that right, as the world goes, is only a question between equals in power, while the strong do what they can, and the weak suffer what they must."
As it was with the warring Greek states of those times, so it is with present-day globalisation. Among the great economic powers - principally the US, Japan and the European Union - a degree of fairness can be expected.
Each party is strong enough to retaliate against the others with trade sanctions and prohibitive tariffs if the need arises. For these countries, globalisation is a good thing.
But when it comes to the poor countries of this world, the effects of globalisation has been quite different. Their experience is not one of fair trade, diminished tariffs and free movement of goods and services.
Rather, globalisation means the rich countries with strong economies do as they wish, and the poor countries suffering what they must.
The New York Times, to its great credit, has been running a series of editorials over the past few months on how protectionist economic policies in the industrialised nations have a devastating effect on agriculture-based economies of developing countries.
Such policies are mostly due to efforts by agricultural interest groups in the rich countries to ensure their farmers continue to receive generous government subsidies.
Consider cotton. In the Nation of June 11, Agriculture Minister Kipruto arap Kirwa was reported to argue that Kenya should revamp the industry to fully exploit the African Growth and Opportunities Act (Agoa).
Urging solutions to the problems posed by crop pests, he declared: "Cotton is the key to the success of Agoa". He asked the scientists he was addressing to "come up with the proper guidelines and recommendations which could boost the development of cotton on the continent".
Well, the bad news for the minister is that if he ever realises his hopes of reviving cotton growing in Kenya, he will find that this does not bring about the prosperity he anticipates.
In an August 5 editorial with the headline "The Long Reach of King Cotton", The New York Times noted that "in Burkina Faso, as in neighbouring Mali and Benin, cotton has long been the sole bright spot in the country's ever-dismal economic prospects".
"White gold, they still call it, though now there is a hint of sarcasm to the expression. Subsidised American cotton farmers now dump so much product on the market that it has driven down world prices.
"So much so that it currently costs Burkina Faso's cotton industry, traditionally one of the lowest-cost producers, more than the prevailing global price to get a kilo of cotton to the international markets."
So, while Mr Kirwa is worrying about the effects of pests on cotton, the real problem is that the international cotton prices have been artificially depressed. Even if those scientists were to rid us of the destructive pests, Kenya's cotton (along with Mali's, Benin's and Burkina Faso's) would be priced out of world markets.
Adding insult onto injury is the comparative numbers of people affected by this policy. Whereas there are only 25,000 American cotton farmers, profiting from those generous subsidies (their average net worth is almost $1 million), the result of this policy of providing subsidies in just one country is "depressed global prices and a harvest of poverty for Burkina Faso's two million cotton farmers".
In the editorial titled "The Rigged Trade Game" (July 20), an example was given which makes the ruling National Rainbow Coalition (Narc)'s promise of 500,000 jobs a year seem more dangerous an illusion than ever.
Apparently the same idea had occurred to leaders of the Philippines back in 1995: "The (Philippine) government predicted that access to world markets would create a net gain of a half-million farming jobs a year to improve the country's trade balance."
But it didn't happen: "No matter how small a wage Filipino workers are willing to accept, they cannot compete with agribusinesses afloat on billions of dollars in government welfare - Instead of making gains, the Philippines lost hundreds of thousands of farming jobs since joining the World Trade Organisation."
And what is it, according to this distinguished newspaper, that led to this catastrophe for the Philippines? The editorial mentions that "The US, Europe and Japan funnel nearly a billion dollars a day to their farmers in taxpayer subsidies."
For those of us who live in the developing countries being pushed around in this way by the big boys, it is comforting to see a paper as influential as The New York Times come out to state: "The glaring credibility gap dividing the developed world's free-trade talk from its market-distorting actions on agriculture cannot be allowed to continue."
But this does not go far enough. The last word on globalisation must be taken from Shakespeare. In his play Measure for Measure, a character makes a point which should be noted by all the industrialised states which are, as The New York Times puts it, "kicking aside the development ladder from some of the world's most desperate people".
Shakespeare wrote: "It is excellent to have a giant's strength; but it is tyrannous to use it like a giant."
From the perspective of poor nations, globalisation as it currently exists is nothing less than a policy of economic tyranny.Africa News:
