The inevitable has now happened. The strategy of the government of President de la Rua was to revive the sinking economy by re-attracting IMF credits and foreign capital. To appease the IMF and Wall Street, it chose to remain with a policy triad that had ceased to make sense. This was to defend at all costs a severely overvalued peso exchange rate, keep up full servicing of the oppressively large dollar debt, and balance the fiscal budget in the face of skyrocketing unemployment and falling production.
The U.S. House of Representatives barely approved fast track trade authority by a vote of 215 to 214, ending a long battle that pitted the Fortune 500 against a broad alliance of labor, environmental, religious, feminist, human rights, consumer, family farm, and other activists. These diverse forces defeated fast track twice during the Clinton administration and managed to delay a vote numerous times this year because of lack of support. Now that fast track has been approved, pro-free trade analysts would no doubt like to begin ringing the death knell of the opposition forces. To the contrary, there are several reasons why this vote is only a small setback in the fight against corporate globalization.
The day the World Trade Organisation (WTO) came into existence, on January 1, 1995, the Indian Express had carried a pocket cartoon on its front page. It showed two people walking amidst high rise buildings with huge billboards for popular multinational brands like Pepsi Cola, Coke, Philips, and McDonalds. The cartoon depicted one of the people walking down the street asking: “What does WTO stand for?” The other man replied: “We Take Over.”
The reverberations from the Asian financial crisis of 1997-98 enmeshed the International Monetary Fund (IMF) in a major legitimacy crisis over its recently assumed mission to promote free capital mobility around the globe. The repercussions from the current Argentine crisis threaten to apply the coup de grace to that mission. The mission, which deviates drastically from the IMF’s original function under its Bretton Woods charter, was designed to support the U.S. free market globalization strategy. The mission crisis of the IMF is thus also a U.S. policy crisis.
Since September 11, the United Nations has gained a rare prominence in Washington’s calculations. Of course it did once before, when Iraq invaded Kuwait–but that was more like a one-night stand turned date rape than a long-term relationship. This time, it could be a more durable courtship, based on more modest and realistic expectations on both sides.
Two years ago in Seattle, demonstrators in the streets brought previously esoteric negotiations of government ministers at the World Trade Organization (WTO) to the world’s eye as never before. Less noticed, inside the meetings, African trade ministers denounced the lack of transparency in the proceedings. “African countries are being marginalized and generally excluded on issues of vital importance for our peoples and their future,” they declared in a public statement. The next day the summit adjourned with no agreement, as developing countries rebelled at being pushed aside, and Europe and the U.S. also failed to resolve their own differences.
The Group of Twenty (G-20) will meet in Ottawa in mid-November, the third meeting since the group was created in 1999. In addition to the G-8 (G-7 plus Russia), the membership of the G-20 consists of: Argentina, Australia, Brazil, China, India, Korea, Mexico, Saudi Arabia, South Africa, Turkey and, oddly, two institutional representatives–one for the European Union and one for the Bretton Woods institutions (the IMF and World Bank).
The agreement to begin WTO negotiations on investment should serve as a call to action for NGOs, socially responsible business leaders, and others who seek to promote the global public interest. Now more than ever, it is time to mount a proactive advocacy effort based on a positive vision of what constitutes “sustainable and ethical” investment rules.
“After our trip to Buenos Aires,” the investment firm of Merrill Lynch announced in early July, “our main impression is that the risks of a spiraling of the crisis in Argentina have increased.” Investors took the warning to heart. On July 11, in its efforts to raise funds on the bond market, the Argentine government was forced to offer interest rates of 14% on its three month bonds; only two weeks earlier, investors had demanded only 9% for similar bonds.
The U.S. boycott of the historic United Nations Conference Against Racism is indicative of the growing U.S. arrogance in international forums. The Bush administration, backed by congressional leaders of both parties, used a couple of controversial lines–out of a document hundreds of paragraphs long–critical of the policies of a U.S. ally as an excuse to avoid addressing such critical questions as racism, xenophobia, and other forms of discrimination that continue to plague humanity.