Annex
SC UK RESPONSE TO DFID WHITE PAPER: MAKING
GLOBALISATION WORK FOR THE POOR JANUARY 2001
SC UK is pleased to have the opportunity to
comment on the White Paper on globalisation, which builds on our
earlier submission to the draft version.
Our submission to DFID on the draft White Paper,
which was written last year, included a number of main recommendations
as well as detailed policy alternatives. In our comments below,
we have taken each of these recommendations and commented on how
far we feel they have been incorporated into the final version.
These initial recommendations are highlighted in italics at the
end of each section.
MUCH TO
WELCOME
SC UK recognises that there is a lot to be welcomed
in the new White Paper on globalisation. We are pleased with the
thrust—of managing globalisation so that it benefits the
poor, but we would like to have seen more detail on how it will
be done. We are also pleased to see the attention given to a country-by-country
approach, for example in the area of capital account liberalisation.
We also endorse the focus on aid co-ordination, getting the international
system "in order" and the untying of aid, after many
years of campaigning by the NGO sector, as well as the stance
on specific issues such as child labour.
However, while welcoming the breadth of the
paper we feel it would benefit from greater detail regarding delivery.
Specific reference to poor people within countries is infrequent,
and for the most part there seems to be an expectation that they
will somehow get pulled along by general improvements brought
about by globalisation. We would welcome further disaggregation
of who benefits and who loses and under what circumstances. Our
experience suggests that even where economies are growing, child
welfare may actually decline. For example, in Ghana and Uganda
malnutrition rates have increased, despite sustained economic
growth since 1985 (UNICEF, 1997 cited in Harper and Marcus, 2000).
While we are therefore pleased with the general
direction of the paper and we do recognise that there is a time
lag between policy change and change in practice, we now need
to see concrete evidence of a real shift among key players.
GLOBALISATION AND
THE POOREST
The main emphasis of the Paper is on markets,
trade, TNCs and making them work in order to promote growth. While
we recognise the vital importance of growth, our primary concern
is that these market processes are mediated in relation to the
poor, especially those in chronic poverty, so as to ensure that
the poorest benefit from globalisation. Despite the positive aspects
of the Paper, we are disappointed with the lack of space given
to discussing the types of important negative impacts of globalisation
on some groups, and thus policies for ensuring that they benefit.
CHILD POVERTY
SC UK welcomes the consideration of children
in paragraphs 73-74, the attention given to breaking the cycle
of child poverty in paragraph 75 and the box on child labour.
However, despite children comprising a disproportionately large
proportion of the poor, and despite the "win-win" nature
of tackling child poverty, no strategies are outlined to ensure
that policies are pro-child. There are also no proposed monitoring
mechanisms to assess the impact of policies on children and no
attempt to analyse the particular nature of child poverty and
its impact on children's lives and development.
We believe that both "ex-ante" and
"ex-post" evaluation of all economic and social policy
in terms of impact on children and families is essential to ensure
that globalisation reduces the poverty of this large and key group.
One of the key negative impacts on children
of globalisation has been the increase in trafficking-such as
for the growing pornography industry and the trade in child prostitutes
alluded to in paragraph 74. However it is not clear how DFID,
the Home Office and the Foreign and Commonwealth Office will be
working together to combat trafficking at a national and international
level. In paragraph 127 onwards, which focuses on the mobility
of people it is unfortunate that there is no specific discussion
about how to reduce child trafficking.
The second White Paper on international development
should reflect the same commitment to children's rights as the
last White Paper by demonstrating how globalisation can positively
improve the lives of children.
GROWTH AND
EQUITY
Overall the Paper deals with the macroeconomic
prerequisites for national growth in some detail, while inequality
within states and the impact of globalisation on the poorest is
given inadequate attention. We are disappointed that there is
not a greater emphasis on equity.
The Paper quotes one set of figures on inequality,
and gives surprisingly little attention to the evidence base on
these issues, given that as suggested in paragraph 27, in many
people's minds, globalisation is a fundamental cause of poverty
and inequality. Other studies, such as Milanovic (1999) or Cornia
(2000) are less optimistic and suggest increasing inequality.
The evidence SC UK encounters in its day-to-day work strongly
supports academic findings which suggest that globalisation is
associated with a reduction in welfare expenditures, inequality,
social fragmentation, poverty, and a widening poverty gap both
within and between countries. Thus while significant numbers of
near poor people are making economic gains, equally significant
numbers of poor people are being further left behind. SC UK believes
this matters because inequalities are a source of social tension,
fragmentation and conflict; it reduces economic growth and actual
numbers living below the poverty line remain very large.
The White Paper should critically review
evidence on economic inequalities within and between countries
and lay out social and economic strategies to redress inequalities,
including fair trade regimes and strategically targeted aid policies,
which do not neglect "poor performers".
The White Paper should use a broad concept
of poverty beyond income and material poverty and including exclusion,
violence, conflict and environmental degradation.
THE NEGATIVE
IMPACT OF
MARKET REFORM
ON PROVISION
OF PUBLIC
GOODS
The White Paper champions market reform. However
SC UK remains concerned at the continuing impact of market reform
on poor children's access to key basic services such as health
and education. While we welcome the statement (paragraph 115)
that "no child should be denied access to a basic education
because she or he, their parents or guardians, cannot pay for
it", we would have welcomed more detail on concrete strategies
for achieving this and see little to allay concerns about the
impact of continuing marketisation on public services.
Although at places the paper expresses "rights
thinking" (as above), we are concerned that elsewhere the
White Paper continues to see them both as a means to economic
growth, rather than as a basic right. The quality of education
is mentioned only in passing in paragraph 111—and this in
relation to building strong export-led growth and a learning economy.
This continuing failure to see education as a basic right contributes
to the narrow focus on enrolment rates and the further abandonment
of difficult to teach children. We are also disappointed that
the White Paper goes no further than the current HIPC initiative
as a means to help poor countries increase their ability to fund
public spending.
The Paper does not give adequate attention to
the issue of the provision of global public goods in general,
or the detail of how public or private sectors will work together,
an increasingly critical issue in need of urgent attention. In
particular we were disappointed that the Paper does not address
the contentious issue of public-private partnerships in the provision
of health care, and how basic services for all are to be guaranteed.
There are many examples of where private sector involvement may
lead to a two-tier health service, for example, through provision
of health insurance which benefits better-off users of services
(Ghana) leaving poor to cope with an under-resourced public sector.
The White Paper needs to affirm the role
of the state in the context of globalisation, particularly in
the provision of quality and affordable basic services.
URGENT ACTION
NEEDED ON
TRADE
We welcome the suggestion that the WTO sign
up to the IDTs and the proposal of duty free access for products
from LDCs to the EU. However, the Paper's recommendations do not
reflect the urgency of the situation. This raises a profound concern
that if concrete steps are not taken fast to enable poor countries
to take advantage of trade globalisation, they will be excluded
in the long term. Particular concerns are access to Northern markets,
and a strengthening of developing countries' ability to regulate
trade and investment, within the framework of a rules-based system.
We are concerned that existing proposals do not go far enough.
Paragraph 222 says that tariffs in Developed Countries, from developing
countries should be reduced—why not removed?
SC UK shares UK Government's concerns about
proposals to link trade and core labour standards through the
WTO, given concerns about the use of indiscriminate trade sanctions
by richer nations for protectionist purposes. There is also the
danger that trade sanctions might drive young workers away from
relatively non-hazardous work in the formal export sector into
even more exploitative forms of work.
The White Paper should not treat trade liberalisation
as a panacea for poverty alleviation but should consider the impact
of trade openness in a variety of contexts and settings.
INTERNATIONAL FINANCIAL
INSTITUTIONS
We welcome the call to ensure a poverty focus
in the IMF. However, we would like to have seen more on how this
will be achieved and how DFID will encourage modification of adjustment
processes to take account of their impact on the poor. There is
thus a need to clarify mechanisms for achieving these goals, and
for DFID to make explicit how IMF policies should be managed to
support poverty reduction, as well as how it will counter the
detrimental legacy of adjustment in terms of public sector service
provision. The inclusion of adequate long term safety nets as
part of the economic reform processes promoted by the Paper, is
crucial, as well as specific details outlining how this will be
ensured. This may include cash or food allowances, feeding schemes,
health or agricultural insurance, pensions (for older or disabled
people) and temporary employment programmes.
SC UK does not agree with the assertion that
the economic fundamentalism of the 1980s and 1990s has totally
been discarded. Structural adjustment policies remain as conditions
of many IFI loans. In transition countries, despite its effects
on poverty and equity, privatisation and liberalisation continue
to be vigorously pursued by international lenders and donors.
To take one example, in Kyrgyzstan further assistance from the
IMF is dependent on full liberalisation of the land market.
We share DFIDS concern expressed in paragraphs
311 to 313 that there have been practical difficulties putting
new poverty reduction strategies in place. However, SC UK is also
concerned that there remains a gap between the rhetoric of participation
contained in the PRSPs and the reality of millions of poor people.
We remain to be convinced that the PRSPs "represent an enormous
conceptual shift away from the structural adjustment of the 1980s
and early 1990s" (paragraph 313). The evidence from Interim
PRSPs in many countries does not suggest this. However, we welcome
DFID's ongoing support to building country ownership of poverty
reduction strategies and processes.
One purpose of the White Paper should be
to demonstrate how current economic orthodoxy can lead to a more
positive outcome for human welfare and how economic policies for
very poor developing countries, which fundamentally continue the
adjustment framework of the 1980s, could be better adapted to
each country' s unique internal and external environment.
The White Paper should recognise that the
"shock treatment" approach to national economic restructuring,
still pursued under economic globalisation strategies, is fundamentally
flawed. The White Paper should propose strategies that do not
promote short-term shocks and critically, involve widespread government
and national ownership of policies. This should move beyond the
current PRSP process into a longer-term vision of policy participation
and ownership.
CORPORATE RESPONSIBILITY
SC UK welcomes moves to promote global corporate
responsibility and the more joined-up approaches to poverty reduction,
for example the DTI looking at corporate responsibility as well
as DFID. However we need further clarity about where responsibility
lies within government to ensure this takes place. Within the
White Paper it is not clear what role DFID has in engaging with
the private sector and in particular with Transnational Corporations—or
whether this will be the sole role of DTI—with the new Minister
for corporate responsibility?
We welcome initiatives to promote effective
management of the corporate sector such as competition policy,
strengthening domestic tax policies, cracking down on tax evasion
and the proposal for an International Investment Agreement. However,
the Paper is weak on the details of legislation required to manage
private finance/corporate behaviour. This is the case with regard
to the skewed distribution of private finance flows, volatility
and capital flight, which is needed to ensure that financial systems
can benefit the poor.
The White Paper does not address our hope that
ethical standards and human rights more generally should be binding
for corporations and individuals, leading to greater coherence
between company activities and their stated commitments to human
rights standards.
SC UK also warmly welcomes DFID's strong support
for reducing the worst forms of child labour and the stress placed
on addressing formal and informal sectors. This includes the importance
of working with the private sector and the emphasis that civil
society should be involved in identifying solutions.
The White Paper must address issues of global
governance in relation to economic and corporate governance and
human rights arenas to ensure any adverse social impacts of economic
policies are mitigated and civil, political and economic rights
are upheld.
SOCIAL AND
ECONOMIC POLICY
COHERENCE
SC UK remains concerned that global economic
governance should be counter-balanced with governance regarding
rights (eg that there should be mechanisms to ensure that human
rights—and for SC UK in particular child rights—are
respected and enforced).
While we welcome the references to social protection
in paragraphs 95-96, and to the need for effective social safety
nets, we feel that this is a crucial aspect of policy coherence.
Developmental social protection measures—those which build
skills and assets—are crucial for enabling poor people to
benefit from globalisation. Much more specificity is needed in
terms of what this means in practice. Key areas include:
— Risk reduction—for example,
making labour markets more equitable, enhancing skills and eliminating
worst forms of child labour
— Risk mitigation—for example,
old age income support, and unemployment benefits.
— Risk coping—safety nets for
example, targeted transfer programmes during economic crisis and
transition—eg free school meals, school fees exemptions
etc.
DFID's recent social protection publication
(de Haan et al, 2000) covers this well and we would have liked
to have seen these issues given more prominence in the White Paper.
A major thrust of the White Paper should
be social and economic policy coherence. This must include recognition
of the social impacts of economic policies on human wellbeing
and extend to an international architecture which, whilst promoting
growth, also recognises and protects human development and human
rights. The White Paper should explore how this can be achieved
through economic policies rather than just through add on social
protection schemes.
The White Paper should seriously tackle the
issue of social protection and public provision for social services
building on human success stories, examining the role of aid,
maintaining support for HIPC and strategies to increase bilateral
assistance beyond 0.3%.
CONFLICT
SC UK welcomes attention in the White Paper
to conflict issues in relation to international systems and globalisation
and we recognise the moves highlighted in paragraph 84, that the
UK Government has taken steps to tighten controls over arms exports.
We also recognise that the UK Government was instrumental in establishing
an EU code of conduct in 1998 to set common standards regarding
arms exports by all EU Member States. We support the licensing
system to regulate the activities of arms brokers and traffickers.
Despite these positive steps outlined in the
White Paper we are very concerned that the Government has chosen
to reject the recommendations of the joint report published in
July 2000 by the International Development, Foreign Affairs and
Defence Select Committees. This covered the introduction of a
two-stage system of prior parliamentary scrutiny of export licensing
decisions that would allow parliamentarians to scrutinise arms
export licence applications before a decision is taken whether
to authorise them. We would recommend that the Government re-think
this decision in order to promote greater transparency and accountability
in arms export licensing. Sweden and the United States operate
all arms exports by ensuring prior parliamentary scrutiny; this
is not a new approach.
The 2001 UN Conference on the Illicit Trade
in Small Arms and Light Weapons, mentioned in paragraph 85,
will give governments a real opportunity to ensure concrete action
in many key areas. These include elimination of arms sales to
regions of conflict, strengthening mechanisms to prevent and control
the illicit proliferation of small arms, and the enforcement and
monitoring of arms embargoes.
We are pleased that DFID are advocating the
adoption of the ICC. However, the White Paper does not mention
other protocols relating to child soldiers, such as the Optional
Protocol on child soldiers to the UN Convention on the Rights
of the Child. Neither does it mention increasing assistance and
funding, or political intervention, to ensure that access to displaced
people for the protection and delivery of humanitarian aid is
guaranteed by all governments and armed opposition groups.
The White Paper should press for the ratification
and signing of the Optional Protocol on child soldiers to the
UN Convention on the Rights of the Child. It should also seek
to encourage the UK, the UN and other donors to provide more assistance
and funding, and where appropriate, to intervene at a political
level to ensure that access to displaced populations, for protection
and delivery of humanitarian aid, is guaranteed.
BRAHIMI REPORT
SC UK fully supports the statement in the White
Paper that the UK Government believes the Brahimi Report should
be implemented within 12 months. The report offers an informed
vision of a "genuinely integrated" Peace Operation and
calls for improvements across the board, including doctrine, strategy,
and planning, decision-making, headquarters organisation and staffing
levels, logistics, rapid deployment and public information.
However, we have two concerns about the report,
which we would like to be addressed in the implementation. First
that humanitarian assistance must be undertaken based on principles
of neutrality and impartiality and secondly, that the unequal
distribution of humanitarian resources worldwide, which is not
addressed in the report, must be investigated.
THE ROLE
OF AID
SC UK welcomes the untying of aid from April
2001, which follows many years of NGO sector campaigning on this
issue. SC UK is also pleased that the Government has agreed to
increase development assistance to 0.33 per cent of GNP and looks
forward to progress towards the UN target of 0.7 per cent. We
re-iterate our belief that increases in aid should be focussed
on the poorest countries, though this should not happen at the
expense of the poorest people in countries where governance and
human rights abuses are worst.
Finally we support DFID's proposal to introduce
a new International Development Bill and look forward to commenting
on it in due course.
The White Paper should seriously examine
the role of aid, maintaining support for HIPC and strategies to
increase bilateral assistance beyond 0.3%.
Save the Children UK
January 2001
REFERENCES:
Cornia, A., 2000, Inequality, growth and
poverty during the Washington Consensus. Paper presented at
the UNU Millennium Conference "On the Threshold: the United
Nations and Global Governance in the New Millennium" sponsored
by the UNU, UNDP and the Japanese Ministry of Foreign Affairs
(Tokyo, 19-21 January 2000). Presented at the G24 Technical Consultation,
Lima 1-3 March 2000.
De Haan, A, Conway, T., Holtzmann, R., Jorgensen,
S., Norton, A., Ortiz, I. and Van Ginneken, W., 2000, Social Protection:
New Directions of donor agencies" produced as a paper by
Social Development Department
Harper, C. and Marcus, R., 2000, Mortgaging
Africa's Future: the long-term costs of child poverty, Development,
43 (1): 65-72
Milanovic, B., 1999, True world income distribution,
1988 and 1993: first calculation based on household surveys alone.
Development Research Group, World Bank, Washington, DC
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