29. Memorandum submitted by the New Economics
Foundation (NEF)
SUMMARY
This evidence to the committee concerns the
wider framework within which international trade occurs. It looks
at the history, politics, environmental implications and possible
new directions for trade and economic development. The evidence
is intended to complement contributions from development organisations
that address the detailed provisions of the current trade round.
It steps back to look forward and its conclusions are that:
— International trade and financial
liberalisation do not per se benefit developing countries.
In fact, for many, these dynamics have been harmful.
— The freedom to integrate into the
world economy on their own terms, pursuing a mix of policies specifically
designed to meet their domestic development objectives, would
benefit the poorest countries most. Such countries should be free
to identify and engage in markets of a size and structure in which
the distribution of benefits from economic activity will be in
their favour.
— Given the historical record, industrialised
countries are, and continue to be, deeply hypocritical in denying
poor countries the same freedom to manoeuvre in terms of market
protection that they themselves enjoyed in their early periods
of development.
— Especially where barriers to success
in global markets are significant, but also under other circumstances,
localisation and targeted local development stand the best chance
of bringing significant gains to some of the world's most economically
marginalised people.
— International trade, like all aspects
of the global economy, is a wholly owned subsidiary of the world's
natural environment. Poor people suffer first and worst from environmental
degradation, and, for example, from the rising disasters associated
with global warming. For this reason trade, like all economic
activity, must work within the limits of environmental tolerance
and, in this case, the need to make radical reductions in carbon
dioxide emissions.
NEW ECONOMICS
FOUNDATION
The New Economics Foundation (NEF) was founded
in 1986, following the international event known as TOES (The
Other Economic Summit). Its founding objects in its memorandum
of association are to "advance the education of the general
public in economic and social studies as they relate to individuals,
communities and the planet as a whole, with special reference
to their inter-relationship with ecology, health, technology,
agriculture, sustainable development, philosophy and psychology."
NEF is an internationalist organisation, with strong links to
Europe and the majority world.
NEF (Think Tank of the Year 2002-03) plays a
leading role in pushing forward new thinking on the global economy.
It chaired the Jubilee 2000 campaign for debt relief from the
beginning and is now home to its continuing research department—Jubilee
Research. It has pioneered work on climate change and corporate
accountability putting new models of business responsibility into
practice. This year NEF will publish the first Real World Economic
Outlook—a new annual alternative to World Bank and International
Monetary Fund reports.
INTRODUCTION: CONTEXT
AND HISTORY
"A shark swims up to a fish and says, `you
can take a bite out of me if I can take a bite out of you'"
Free trade should be exactly that, free and
not compulsory. Otherwise small fish can invite their own demise
by having to swim into the mouths of bigger fish. Economic integration
is not a panacea for global poverty and many countries that have
opened themselves up to trade and capital flows have been rewarded
with financial crises and disappointing performance. According
to economist Dani Rodrik, turning away from world markets is surely
not a good way to alleviate domestic poverty, but countries that
have scored the most impressive gains are those that have developed
their own version of the rulebook while taking advantage of world
markets.
Since the 1960s, every attempt by developing
countries to engage with the global economy on terms that would
help them develop, such as managing investment, regulating foreign
multinationals and stabilising commodity prices, has been resisted
and opposed. It's another echo of the nineteenth century when,
according to Mike Davis, author of Late Victorian Holocausts—El
Nino Famines and the making of the Third World, "From
about 1,780 or 1,800 onward, every serious attempt by a non-Western
society to move over into a fast lane of development or to regulate
its terms of trade was met by a military as well as an economic
response from London or a competing Imperial capital."
AVERAGE TARIFF RATES ON MANUFACTURED PRODUCTS
IN THE EARLY STAGES OF DEVELOPMENT
| 1820 | 1875
| 1913 | 1925 | 1931
| 1950 |
| UK | 45-55 | 0
| 0 | 5 | na |
23 |
| USA | 35-45 | 40-50
| 44 | 37 | 48 |
14 |
Source: Chang
PROTECTIONISM IN BRITAIN 1821-1913 (MEASURED BY NET CUSTOMS
REVENUE AS A PERCENTAGE OF NET IMPORT VALUES)
| |
| 1821-25 | 53.1 |
| 1826-30 | 47.2 |
| 1831-35 | 40.5 |
| 1836-40 | 30.9 |
| 1841-45 | 32.2 |
| 1846-50 | 25.3 |
| 1851-55 | 19.5 |
| 1856-60 | 15.0 |
| 1861-65 | 11.5 |
| 1866-70 | 8.9 |
| 1871-75 | 6.7 |
| 1876-80 | 6.1 |
| 1881-85 | 5.9 |
| 1886-90 | 6.1 |
| 1891-95 | 5.5 |
| 1896-1900 | 5.3 |
| 1901-05 | 7.0 |
| 1906-10 | 5.9 |
| 1911-13 | 5.4 |
| |
| Source: Chang | |
The hypocrisy of this situation is laid bare by the historical
facts on domestic market protection. Ha-Joon Chang produced these
tables (above) to show how both the two dominant economic powers
of the last two centuries employed protectionist measures to establish
their dominance before preaching free trade to the world. As J.K.
Galbraith commented:
"Free trade was for the first arrival, where, as in Britain,
it was, indeed, an attractive design for confining the later contenders
to their earlier stages of development."
Rodrik also observes that, "US import tariffs during
the latter half of the nineteenth century were higher than in
all but a few developing countries today." To economic historians
like Robert Heilbroner, the contradiction between historical reality
and current mainstream economic rhetoric on the benefits from
competitive international trade is not a surprise. He points out
that for much of the last millennia, the: "notion that a
general struggle for gain might actually bind together a community
would have been held as little short of madness".
Even conservative philosopher Karl Popper could see in the
operation of free markets, pursued to their logical conclusion,
a fundamental threat to an open global society. He talked of:
"The paradox of economic freedom, which makes possible
the unrestrained exploitation of the poor by the rich. . . results
in the almost complete loss of economic freedom by the poor."
In today's global economy, incurable problems with depressed
commodity prices, beggar-thy-neighbour South-South competition,
environmental stress and the reluctance of rich countries to assist
or open their markets to any significant degree, are still dismissed
as minor irritations in the face of the long term promised gains
from liberalisation.
A DIRTY SECRET
"For many LDCs external trade and finance relationships
are an integral part of the poverty trap." UNCTAD, The Least
Developed Countries Report 2002, Escaping the Poverty Trap
Trade and development economists have disagreed with the
dominant view of large, guaranteed benefits from trade liberalisation
for many years. For example, leading trade economist Paul Krugman
wrote that there is a "dirty little secret" in the analysis
of international trade which hides the fact that the costs of
protectionism "are not all that large", while the "empirical
evidence" of great benefits from liberalisation "is
at best fuzzy." Former World Bank chief economist, Joseph
Stiglitz, said that "it is not surprising that critics of
liberalisation. . . raise cries of hypocrisy."[72]
There is a sense that, not only are rich countries pulling
up the ladder, they are also mocking poor countries from their
comfortable heights. According to Stiglitz, rich countries play
down political problems faced by developing countries telling
them to "face up to hard choices"—but then excuse
their own trade barriers and agricultural subsidies by citing
"political pressures." And it is not only political
problems that poor countries face, including high unemployment
and "weak or non-existent safety nets," but greater
economic volatility, and that "opening to trade in fact contributes
to that volatility."[73]
Rodrik observes that some of the best success stories from
the majority world contradict the standard view:
"Economic development often requires unconventional strategies
that fit awkwardly with the ideology of free trade and free capital
flows. South Korea and Taiwan made extensive use of import quotas,
local-content requirements, patent infringements, and export subsidies—all
of which are currently prohibited by the WTO. Both countries heavily
regulated capital flows well into the 1990s."
China, too, considered a great success story, ignored the
Washington rule book. Refusing to liberalise its trade it integrated
with the world economy on its own terms. In spite of this, universal
deregulation is still the mantra of mainstream economics. Behind
the international trade system, overseen by the World Trade Organisation,
is still a belief in the automatic benefits of liberalisation.
Within this belief is a largely unrecognised dynamic—that
we are moving towards a utopian endgame—a market free of
"red tape", of any rules constraining the private sector.
An underlying theory is that progressive liberalisation leads
to progress. In reality, power, market failure and real world
problems get in the way.
Economists like Herman E Daly realise that the scale of growth
beyond a certain point is "ushering in a new era of "uneconomic
growth" that impoverishes rather than enriches."[74]
Even the OECD has said that, "the negative scale effects
of globalisation may turn out to be very large, effectively swamping
any positive . . . effects."[75]
This observation is perhaps most clearly demonstrated in the case
of the economic "externality" of global warming.
CLIMATE CHANGE
AND ENVIRONMENTAL
LIMITS TO
TRADE
Global warming demonstrates one way in which trade systems
must work within the limits of environmental tolerance. It is
described in full in NEF's report Collision Course—free
trade's free ride on the global climate.
International trade is particularly fossil fuel-dependent.
And the world has committed to reducing the emissions from fossil
fuels to prevent catastrophic global warming. But trade as a share
of total world economic output has consistently grown, increasing
our collective dependence on fossil fuels.
Conflicts between trade and the environment have risen to
the top of the agenda over the past decade. Most discussion have
focused not on the impacts of trade itself—through the transport
of goods across national borders—but on the ways in which
internationally traded goods are produced. The blind spot about
freight has led to a double failure: first, to appreciate the
real impacts of rising freight movements and second, to introduce
the necessary policies to shift freight onto a sustainable path.
The planes and ships used to move goods around the world
are one of the fastest growing sources of the greenhouse gas emissions
responsible for climate change.
Since international air and marine freight fuels are not
taxed or included in agreed targets to reduce greenhouse gas emissions,
this worrying trend is likely to continue.
Each year, we ship, truck and fly ever more stuff across
national borders. Standing now at an annual total of $7 trillion,
flows of trade have expanded far faster than economic output.
And freight activities have been growing in accordance with trade
flows. The environmental impacts of this growth are mirrored in
the growing share of transport related greenhouse gas emissions.
A study in 1997 by the OECD and IEA estimated that the transport
sector accounted for 20-25% of carbon emissions from energy use
for the year 1995. The average annual rate of growth of transport
related carbon emissions—including international aviation
bunker fuels but excluding the marine equivalent—was 2.4%
between 1990 and 1995. Within the transport sector, freight transport—including
marine, aviation, rail/inland water and heavy duty road vehicles—accounted
for 55% of carbon dioxide emissions in 1990.
General projections for growth in the transport of internationally
traded goods indicates that in 2004, the year of the full implementation
of the Uruguay Round commitments, there will be an increase by
70% over 1992 levels. This is over 15 times greater than the 4.5%
directly attributable to the specific consequences of the Uruguay
Round. If the projected 70% increase in international freight
transport was to materialise by 2004, the resulting increase in
emissions would make a mockery of both the reduction targets set
for industrialised countries, and the current exclusion of international
freight from Kyoto controls.
OTHER NEGATIVE
SIDE EFFECTS
RELATED TO
EXPORT ORIENTATION
A study of the more immediate environmental impacts of trade
liberalisation in developing and transition economies by the United
Nations Environment Programme concluded that there were "serious
negative environmental, and related social, impacts of expanded
trade activity." These included:
— displacement of local, community-serving economic
activity;
— loss of common property rights in the shift to
export led activity;
— social instability resulting from structural economic
changes; and
— the failure and obstruction of policies designed
to mitigate environmental impact.
COMMODITY PRICES
"If world commodity markets are left to the free play
of market forces . . . the downward trend in real prices is likely
to persist. Indeed . . . the downward trend might even be reinforced,"
Alfred Maizels—Oxford University
Falling commodity prices have lead to severely declining
terms of trade for many commodity producing countries. Consequently,
large increases in export volume by commodity producers have not
translated into commensurately greater export revenues. Primary
commodities account for about half of the export revenues of developing
countries and many developing countries rely heavily on one or
two primary commodities for the bulk of their export earnings.
In addition to low prices, commodity dependent countries also
suffer from market volatility.
According to UNCTAD, compared with their value in 1980, the
prices of coffee, tea and cocoa are now less than half. Agricultural
raw materials have lost around a third of their value and other
food products half. This means that while we enjoy cheap commodities
a country like Ghana might increase cocoa production by 80% over
a 10 year period and only see its earning increase 2%.
A decline in purchasing power of a country's exports means
that a country is unable to purchase imported goods and services
as necessary for its sustenance, as well as generating income
for the implementation of sustainable development programmes.
In addition, it also prevents primary commodity producers from
investing in safe and environmentally sound methods of production.
It should be pointed out that the problem of collective adjustment—in
which most developing countries followed IMF and World Bank advice
to export their way to economic growth—has still not been
addressed. It did, perhaps, not require the highest qualification
in economics to predict that a group of countries increasing exports
of like products, would help depress prices and leave those same
countries running faster to stand still, or actually backsliding
economically.
With the minor exception of price insurance schemes, and
suggestions to destroy stockpiles resulting from overproduction,
there remains no significant proposal to deal with the scale of
the problem of low commodity prices.
INTELLECTUAL PROPERTY
RIGHTS
"Of all things knowledge is that which should be most
freely shared, because in sharing it is multiplied rather than
divided," former World Bank economist Herman E Daly
All markets are framed by rules concerning property rights.
Rules concerning property rights in international trade are written
in such a way that tilts the field of play in favour of those
countries that are already economically dominant.
Dwijen Rangnekar, from the School of Public Policy at UCL,
has produced estimates indicating the scale of the imbalance.
The top five beneficiaries from the TRIPS regime for the year
2000, in terms of receiving payment of "technology fees"
were, in order: United States, Germany, Japan, France, UK. The
losers, in terms of making payments, included: Republic of Korea,
China, Mexico, India and Brazil.
In another sphere, biotechnology companies claim that the
engineering of plant genetic resources is needed to continue feeding
the world and to help the poorest people combat nutritional disease.
However, the patenting of weeds and plant varieties has merely
expanded the market control of chemical, seed and biotechnology
companies, without reducing starvation and malnutrition around
the world. It is inhibiting research by increasing costs; limiting
the availability of scientific knowledge; threatening the livelihoods
of farmers; and potentially, by prohibiting them from saving,
exchanging and re-sowing seeds.
Though rarely understood as such, property rights are basically
a right to exclude. Patenting genetic resources has been described
as the act of "committing daylight robbery on the common
property of humanity". An old UN study calculated that, "if
a royalty was charged on biological diversity developed by local
innovators in the South, the North would owe over US$300 million
in unpaid royalties for farmers' crop seeds and over $5 billion
in unpaid royalties for medicinal plants."[76]
Today, given the increasing importance of intellectual property
in the intangible asset base of companies, those figures would
need to be revised upwards.
Some argue that the stronger the protection of property rights,
the better it is for economic development, as it is assumed to
encourage the creation of wealth. However, there are many examples
in history in which the preservation of certain property rights
has proved harmful for economic development and where the violation
of certain existing property rights (and the creation of new ones)
was actually beneficial for economic development. What property
rights are protected and under what conditions is a more important
question.[77] Broad patens
can indeed have the perverse effect of stopping R&D. According
to GRAIN, this has been documented in several sectors (eg the
oilseed industry) and "blocking technology" has become
a strategic value of patenting today.
This argues that rather than a one-size-fits-all anglo-saxon
model of property rights, which is increasingly the case, the
international trading system needs an approach of locally adapted
regimes to fit the specific development needs of the country,
or region in question. A forthcoming paper from NEF will examine
this question in more detail.
UNEVEN NEGOTIATION
POWER
"People of the same trade seldom meet together . . .
but the conversation ends up in a conspiracy against the public."
Adam Smith
Mistrust of the chief players in the global economy, transnational
corporations, is at the heart of the WTO's continuing crisis of
legitimacy. Rubens Ricupero, the head of UNCTAD, argues that their
impact "depends significantly on how well the host economy
bargains," but that, ". . . the capacity of developing
host countries to negotiate with TNCs is often limited."
And "weak bargaining," he believes "can result
in an unequal distribution of benefits or abuse of market power
by TNCs."[78]
There is a deep irony in that the liberalization mantra has
been used to open up developing country economies to foreign multinationals.
Daly quotes Chicago School economist and Nobel laureate Ronald
Coase in a classic article on the Theory of the Firm, who noted
that, "Firms are islands of central planning in a sea of
market relationships".
Daly goes on to make a critique which is yet to be answered,
"The islands of central planning become larger and larger
relative to the remaining sea of market relationships as a result
of merger. More and more resources are allocated by within-firm
central planning, and less by between-firm market relationships.
And this is hailed as a victory for markets! It is no such thing.
It is a victory for corporations relative to national governments
which are no longer strong enough to regulate corporate capital
and maintain competitive markets in the public interest."
These dynamics might explain why the World Bank's Head of
Trade Policy once said, "WTO obligations reflect little concern
for development and little appreciation of the capacities the
least developed countries have . . . The context of the obligations
imposed by the World Trade Organisation agreements . . . can be
characterised as the advanced countries saying to the others:
do it my way." This is similar to Stiglitz' view that countries
are finding themselves in situations where they are having policies
imposed on them, not unlike the nineteenth century opium wars,
when countries were told to open up their markets by the threat
of military force, for the benefit of the dominant trading nation.
Yash Tandon, Director of the International South Group Network
(ISGN), has pointed out that no system of governance is legitimate
or moral unless it has a judiciary that is independent of those
who exercise power in the system. A judiciary should function
on the principles of justice and fair play, and defend laws and
rules of governance that are arrived at democratically and protect
the weak against the strong. The WTO is supposed to operate by
consensus where each member country has equal say, but the reality
is very different, and key decisions are often made in small "by
invitation only" meetings.
In addition, litigation in the WTO system is extremely expensive.
This means that, whilst there are potentially hundreds of cases
the South could bring to the WTO on non-implementation by the
developed countries of their obligations to them, they cannot
afford to use the disputes resolution system of the WTO. There
is also a further inequality built into disputes system because
of the differing relative economic size of litigants. "Punishment"
in the system comes in the form of various permitted sanctions
allowed to the successful litigant. But there will always, for
example, be far more pressure for a small sub-Saharan country
to comply in the face of a US complaint, than vice-a-versa. Small,
economically weak countries will always have more to lose.
WHERE DOES
TRADE GO
NOW?
There is no simple answer to the question of what we should
do. For the simple reason that in every different situation, concerning
different products and trade relationships, the recipe for mutual
benefit and maximum environmental sustainability will be different.
This argues for a much more flexible approach to the management
of international trade, especially where the most economically
weak countries are concerned. It argues, for example, that there
should be both more special and more differential treatment, according
to the development stage and social, political and environmental
challenges faced by nations and communities.
We face increasing volatility in the global economy, environment
and international political community. These volatilities affect
the poorest people first and worst. The new question to ask of
every policy is will this increase or decrease the vulnerability
of people and will it add to or take away from our collective
security? Trade liberalisation has often been a disaster for the
food security and economic prospects of the poorest people in
developing countries.
Amidst the global economic chaos, we are witnessing the death
of the assumption that all economic activity logically floats
up to the global level. The future is more likely to be found
by asking a different question: what is the right level at which
to organise all the different aspects of our livelihoods—in
the neighbourhood, or at the regional, national, bio-regional
or global level?
The answers to these questions in terms of food production,
manufacturing, retailing, travel and culture will describe a sustainable
new world order. It will be more about localisation—in the
broadest sense—than globalisation. It can also be described
in terms of "subsidiarity" or the "proximity principle",
or "nearness". It is a planned internationalism where
we do globally what we must—in terms of rules and controls
to distribute more equally the benefits of global economic activity,
(such as competition policy to regulate multinationals and mechanisms
to restore and stabilise commodity prices) and locally what we
are able, in terms of economic self-determination.
WHAT SUSTAINABLE
TRADE MIGHT
LOOK LIKE?
This exercise in thinking locally shows one model for economic
organization that would minimise unnecessary freight transport,
both domestically and internationally. It operates on the economic
maxim proposed by EF Schumacher that environmental and social
benefits are maximized when the scale of economic operations are
at the most local feasible level. He uses the same term used to
describe the founding political principle behind the European
Union—subsidiarity.
The diagram above is adapted from an idea by professor of
physics, John Ziman. It sketches what a framework for sustainable
trade might look like. The model assumes that: lifestyles are
not immediately changed; trading between units can take place
through information networks, co-operatives and fair markets;
low-cost capital is available for investment at all levels; and,
there are mechanisms to stabilise agricultural prices.
The different zones are estimates for geo-demographic units
that provide sufficient economies of scale for enterprises to
succeed, but also give limits beyond which the costs of scale
and economic integration can outweigh the benefits. The model
implies a very different toolbox for the management of trade than
the one currently available at the World Trade Organisation. The
time is now right for a debate on what these policies should be.
PLUGGING THE
TRADE LEAK,
INTERNATIONALLY
Another model for trade in which poor and marginalized communities
can better guarantee a good deal, is a global version of the "plugging
the leaks" innovation. "Plugging the leaks" addresses
the problem that in economies, small and large, most benefits
leak out of poor areas to economically more advantaged areas and
actors. This is then addressed by finding out where the leaks
are, and plugging them. The model has been shown to work in local
areas, but can attempts to create and keep wealth at the local
level ever work as a model at the international level?
In Nilgiri, in India they think so. A scheme called Just
Share, that started as a campaign to win land rights for tribal
people, has grown into a model of economic co-operation between
marginalised communities in different continents. Though small
in scale today, it is a powerful example. In order to win control
of land, the community in Nilgiri had to have permanent occupancy.
For this they needed to work the land and turned to growing the
big local crop, tea. They started selling their tea in a fair
trade scheme, partly in order to sidestep the tea barons who they
suspected would take the biggest share of any profit. But then
they saw a weakness in the project. They were charging a fair
trade premium price to people who they considered as their friends.
And, they wanted to be able to sell fairly grown tea to deprived
communities in the UK, at the lowest possible price so that both
communities of people could benefit.
They linked directly with community co-operatives in Britain.
By "internalising" the production chain within such
groups, they have managed to prevent extra value being extracted
by middle-men and other profit hungry retail and production companies.
The founders of the scheme imagine that this model could
be extended to other crops that have to be traded internationally,
and that could one day even be traded between communities in their
own currency, further preventing the leakage of wealth.
"It is an attempt to link producers, consumers and investors
in a co-operative manner where ownership, risk and benefit is
spread across the different players of the market chain,"
says Stan Thekaekara, originator of the project. "We think
the time has come to take Fair Trade a step further".
CONCLUSION
"I sympathize therefore, with those who would minimize,
rather than those who would maximize, economic entanglement between
nations. Ideas, knowledge, art, hospitality, travel--these are
the things which should of their nature be international. But
let goods be homespun whenever it is reasonably and conveniently
possible; and, above all, let finance be primarily national."
JM Keynes.
International trade isn't working for the world's poorest
people. The Doha round of trade talks shows no signs of radically
changing that situation. Instead of concentrating on details to
do with market access, NEF believes it is time for the government
to ask more fundamental questions about the shape, equity and
sustainability of international trade.
These questions begin with the most important one: whether
any existing or proposed rules will increase or decrease the vulnerability
of the people in need. We believe that managing risk and reducing
vulnerability will be aided by a process of localisation.
In Johannesburg in August 2002, at the tenth anniversary
of the Earth Summit, NEF organised a parallel conference attended
by civil society groups from 43 countries. It was part of the
"People's Earth Summit." The largest contingent of participants
was from Africa, followed by a mixture of people and organisations
from Europe to South Asia, North America, Latin America and a
number of small island states.
Those present drafted a statement that said they were joined
by a belief that international negotiations were "failing
to provide real alternatives to the current unsustainable pattern
of development." They went on to make a number of proposals
that shared as a common theme: "The idea that we must move
away from the current model of globalisation, dominated by the
finance sector, and move towards a genuinely internationalist
agenda." Most important of all was what lay at the heart
of that agenda. It was: "The rights of local communities
to determine their economic path and protect their cultural and
environmental heritage."
There followed a long list of measures designed to address
the imbalances, systemic risks and increasing chaos of the global
economy. It covered finance, trade and reform of monetary systems.
It spoke of natural resource management, education and government
accountability. A huge majority of the people present were from
so-called "developing countries". Their voices are a
cold shower for critics who find it comfortable to believe that
anyone opposed to globalisation is already rich and simply "anti-development".
Here is an illustration from the experiences of the Bangladeshi
development organisation UBINIG. It shows what localisation might
mean in the context of a poor country in the Southern hemisphere.
Farhad Mazhar promotes "Nayakrishi" which means
"new agriculture". This is a form of ecological farming
that attempts to undo the damage and declining returns of the
so-called green revolution, whilst avoiding the economic traps
and scientific uncertainty of GM crops. Apart from the complexities
of farming theory, Farhad makes a point of elegant common sense
about trade and globalisation that displays a pragmatism and logical
set of priorities typical of groups too often written-off as merely
"anti-globalisation". Farhad says:
"I'm not against the market, or even international trade.
It's just that trade should be non-exploitative, and local needs
should come first. Now we've found that Nayakrishi agriculture
is more economically viable than conventional modern farming,
many households are beginning to go into cash crops for the market
too."
Ever more economists, too, are questioning economic integration
as a panacea for global poverty. Dr. Nigel Poole of Imperial College
supports the idea of "selective market integration".
He says,
"targeting local development rather than global integration
may... bring significant benefits to communities who's livelihoods
can best be enhanced not by costly investments aimed at overcoming
almost insurmountable geographical, economic and technological
barriers to market access, but by investments in local assets
and initiatives: a `targeted local economy'".
Critics may say that by focusing on the "local",
people are turning their backs on the world and pulling up the
ladder of economic development from poor countries. But that would
be fundamentally to misunderstand both the proposals, and what
is happening in the increasingly shaky global economy. Localisation
is not an absolute, but a dynamic process. Instead of encouraging
the economics of large and remote organisations, it promotes an
economics of nearness and human-scale in which people have more
control over their lives. NEF believes this is part of a new economics
capable of delivering human and environmental well-being internationally.
It has common themes everywhere, but will look different wherever
it grows. It will be a planned internationalism where local people
are more in control.
New Economics Foundation
January 2003
SELECTED REFERENCES
Chang, H-J (2002) Kicking Away the Ladder: Development
Strategy in Historical Perspective, London: Anthem Press
Daly, H E, Uneconomic Growth and Globalization in a Full
World, Natur und Kultur
Genetic Resources Action International (GRAIN) (1998), "Intellectual
Property Rights and Biodiversity: The Economic Myths", Global
Trade and Biodiversity in Conflict, No. 3
Jubilee Research (2001) HIPC: Flogging a dead process
Kim, L (2002) "Technology Transfer and Intellectual
Property Rights: The Korean Experience", Bridges,
November/December 2002
McMillan, M, Rodrik, D and Horn Welch, K (2002) When Economic
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