EDITORIAL

Sept 13, 2000

Where we differ on globalisation
Steven Gan

Before leaving for the United States, Prime Minister Dr Mahathir Mohamad labelled Suqiu as no different from the communists. Days later in New York, he hugged Fidel Castro, perhaps the world's most unrepentant communist. 

Irony aside, both Mahathir and Castro are right about the evils of global capitalism. 

Unfortunately, Mahathir did not use last week's UN Millennium Summit as a platform to speak his mind on the issue. Perhaps it was a snub directed at the global body for its criticism of Malaysia. Castro, however, was there, and with all guns blazing. 

He told the talkfest that three dozen rich nations which hold a monopoly of economic, technological and political power are offering "more of the same recipes that have only served to make us poorer, more exploited and more dependent". 

Indeed, free-marketeers have shrewdly sold the idea that the Third World is bridging the gap ­ spearheaded by a dozen or so rapidly-growing tiger economies ­ whose growth is spurred by the globalisation of world markets. 

Take software giant Microsoft chief, and the world's richest man, Bill Gates. He told the World Economic Forum meeting in Melbourne yesterday that the poor will be the losers if there was no globalisation.

But the poor are already the losers.

Over the last three decades, the disparity ratio between the richest 20 per cent of the world's population and that of the poorest 20 per cent has increased from 30:1 to 61:1. And people in more than 100 countries ­ representing one-quarter of humanity ­ are worse off than they were 15 years ago. 

Today, the net worth of the world's 358 richest individuals - yes, Gates included - is equal to the combined income of the poorest 45 per cent of the world's population. And concomitant to the rise in global wealth ­ which has incidentally ballooned by six-fold to US$23 trillion ­ is a silent genocide. Every year, 30 million people die of hunger. 

New global rules

Indeed, the push to increase the profits of corporations and investors by freeing the flow of capital through globalisation is inexorable. And these die-hard globalists are not only satisfied with the current moves towards liberalisation. They want it down in writing. 

Consider the aborted global investment pact ­ the Multilateral Agreement on Investment, or MAI.

MAI was designed to establish a new set of global rules for investment that would grant transnational corporations and investors the freedom to buy, sell and move their operations whenever and wherever they want around the world, unfettered by government intervention and regulation. 

According to the pact, investors need not bear any obligations and responsibilities to workers, consumers or the environment. 

The role of the government, under the treaty, would be reduced to serving the interests of investors by ensuring a "favourable" climate for investment. Political power would thus be harnessed to work for the rights of investors, not the rights of citizens. 

MAI was to be a global constitution that protects, not citizens, but investors and corporations, and one which does not recognise democracy, only free markets. 

Fortunately, this global pact was put to an early death after much protest from citizens in the rich world. Flushed with the success against MAI, the anti-globalisers have targeted other international economic forums - Seattle, Washington, London, and now Melbourne where the World Economic Forum met early this week.

Mahathir has sung praises of such dissenters. And rightly so.

Don't do as I say

That said, here is where we differ from the anointed Third World spokesperson.

Mahathir clearly does not practise what he preaches - much like his thumbs-up for the anti-globalisation demonstrators overseas and his iron-fist against reformasi protestors at home. 

Crony companies, having ravaged the local environment, are encouraged to forage overseas - doing much of the same damage, sometimes worse, as western multinationals.

And while Mahathir decries the lack of transparency in the global economy, the Malaysian economy is racked with corruption, cronyism and nepotism.

Our solution? Ensure transparency in both economic and political institutions. Build a truly independent and credible Anti-Corruption Agency. And while we're doing this house cleaning, don't forget the judiciary as well. In fact, some of the ideas can be found in, er, Suqiu's 17-point memorandum.

Malaysia must also boost local capital by promoting domestic savings and slow down the pace of liberalisation so that nation states can insulate their economies from the whims of international capital. This would, of course, mean trading economic instability for slower growth. 

But the rich world will really hate that. It will make it more difficult for their investors and corporations to extract and maximise profits. 

So will the Third World elite. After all, rapid growth helps them ignore much-needed social reforms while they and their cronies feed themselves on the nation's wealth. Slower growth, they fear, will stir discontent among the poor if a redistribution of wealth is not forthcoming.

Protecting the rich

The free market, said Massachusetts Institute of Technology professor Noam Chomsky, is ''socialism" for the rich. ''The public pays the costs and the rich get the benefits ­ markets for the poor and plenty of state protection for the rich." 

And debts, he said, are also socialised. ''Under this system of socialism for the rich that we call free enterprise, nobody expects the banks to have to pay for the bad loans. That's your job and my job." 

Here's one person that Mahathir should meet, instead of globalisers such as Gates.