Cancun’s collapse

WORLD trade as a proportion of world output increased at an unprecedented rate in the 1990s. This was largely the result of a decisive move away from the mercantilist approach that was followed by much of the world in the 19th and the first half of the 20th centuries. According to this, each country protected its own producers and workers at the expense of those beyond its borders. Once it came to be realized that trade is not a zero sum game in which gain by one country is exactly matched by the loss by another, attitudes changed.

In the period after the Second World War, international trade came to be viewed as a plus sum game in which all trading partners benefited. Not every one in every country gained immediately. The workers engaged in industries or other economic activities that could not stand competition had to find other occupations. But since expansion in trade contributed to growth in economic output even the labour force displaced by competition found new places to work.

The move from the mercantilist approach to a more open global trading system was facilitated by a series of negotiations to balance the concessions made by industrial countries to open their economies. These discussions were held under the auspices of the General Agreement on Trade and Tariffs, or GATT, an agency created as a part of the international economic system that emerged after the Second World War.

Ideally, an international agency set up to monitor trade should have been provided with more teeth than were given to the GATT. That did not happen when other international economic and financial institutions were established in 1945 to usher in a new global order after the end of World War II. A trade organization that had rule-making and rule-enforcing powers such as those given to the International Monetary Fund would have eroded some of the sovereignty jealously protected by nation states, in particular in the developed world. What Europe and North America and Japan (once it joined the club of rich nations) were prepared to do was to create a secretariat of international civil servants to facilitate the various rounds of trade negotiations. The most significant series of trade talks managed by the GATT after its creation were the Kennedy and Tokyo rounds. The first one took its name from the American president who wished to provide leadership to the rest of the world in order to move towards a more open trading system. The second was named after the city where the trade ministers assembled to launch another round of discussions. These two deliberations resulted in a significant lowering of tariffs among the rich nations. In both rounds the developing world stood mostly on the side-lines.

The two subsequent rounds brought into the deliberations the developing world to some extent. It is not insignificant that these sets of deliberations were named after the countries in the developing world. The Uruguay round got its name since the decision to launch it was taken at Punta del Este, a sea resort in that country. The Doha round got its name from the city in Qatar where the ministers met in November 2001 and took the decision that began another series of trade talks. It is also interesting that the major events associated with these two rounds took place in the cities in the developing world. The Uruguay round was concluded at a meeting in Marrakesh, Morocco, which resulted in the establishment of the World Trade Organization, or WTO. The Doha round received a major setback in Cancun, Mexico, when the negotiations collapsed largely as a result of the position taken by a group of 22 developing countries, including Pakistan. While Pakistan was a member of this group, it does not seem to have played an important role in defining the developing world’s position that was taken by the big three — Brazil, China and India. This relative lack of activism on Pakistan’s part may prove to have been a wise position. I will return to this point a little later.

The Cancun discussions collapsed on September 14, five days after they began. The road to Cancun was discussed by me in an earlier article (Dawn, September 9, 2003). In the article today, I will first analyze the circumstances that led to the collapse of the discussions and then, second, indicate some of the options Pakistan should explore in the months ahead.

Developed countries — Europe, Japan and North America — went to Cancun after deciding to offer some concessions to the developing world that concerned the latter the most. The developing world was rightly troubled by the enormous difficulties it faced in operating in a trading environment in which large subsidies were routinely provided to the farmers in Europe, Japan and the United States. The talks did not succeed although the European Union and the United States had agreed between themselves to grant some concessions to the developing world by readjusting their farm support policies. The developing world — in particular those which exported agricultural commodities — were not satisfied. Unexpectedly, it was the US support to its cotton farmers that proved to be one of the two major issues that resulted in the collapse of the talks at Cancun. It was the plea by four poor West African countries to eliminate mainly US cotton subsidies that were depressing cotton prices and squeezing export markets that contributed to what went wrong at Cancun. According to one analysis, “$3 billion-$4 billion a year subsidies paid to the US’s 25,000 cotton farmers exceeds the gross domestic product of Burkina Faso and is three times the entire budget for Africa. Meanwhile, 10 million cotton farmers in West and Central Africa — many living on less than $1 a day — are losing $1 billion a year in export earnings”. The African nations deeply disturbed by the US’s unwillingness to grant any concession whatever joined the group of 22 relatively larger developing countries that had grievances of their own in forcing an unhappy conclusion to the Cancun meeting.

The Cancun meeting scored a first in the sense that the developing world was prepared to show that since the conclusion of the Uruguay round, it had acquired some economic muscle of its own. The three countries that led the G-22 group of developing nations were all vibrant economies by the time the trade ministers met at Cancun. In the first half of 2003, China, by growing at a rate of 8.3 per cent annual rate, was by far the world’s most rapidly growing large economy. While the Indian rate of growth had slowed down somewhat, it was still twice as large as the average for the rich countries. And Brazil seems to be bucking the trend in Latin America by demonstrating that for once a country in that region was not entirely dependent on growth in rich countries for its own economic performance. The remaining 19 countries in the G-22 group — including Pakistan, Mexico and Egypt — had also done much better than the countries in the developed world.

The other dispute that caused the Cancun talks to collapse was the insistence on the part of rich countries to get the developing world to agree on a number of measures that had come to be subsumed under the title of the “Singapore agenda.” These included concessions by developing countries in three areas — investment, competitive trade facilitation and transparency in government procurement.

The group of 22 developing countries had three reactions to the pressure put on them by the developed world. One, they did not think that rich countries had gone far enough in accommodating their demands in levelling the playing field in agriculture. Two, they were not prepared to lower their own tariff and non-tariff barriers against imports from developed countries, according to the schedule demanded by America, Europe and Japan. Third, they were of the view that the acceptance of the Singapore agenda would expose their fledgling service sector — in particular the sector of finance — to competition that would be enormously harmful to their future development.

There are three possible outcomes of the collapse of the Cancun meeting. One, it might mean an end to the progress the world has made towards evolving a trading system that is based on strictly defined rules implemented by an organization (the WTO) that is not beholden to one large trading country (say, the United States or China) or one large trading bloc (say, the European Union). Such an outcome would not benefit any country, rich or poor. It would be close to a tragedy for a country such as Pakistan which is a very small participant in the global trade and, therefore, needs the comfort of a number of similarly placed countries to be able to protect its interests. As Supachai Panitchpakdi, director-general of the WTO, wrote in a newspaper column, “the disappointing ministerial conference that concluded here on Sunday will have many ramifications but sadly the most significant of them will be its impact on poor countries”.

Two, the United States, for the moment the world’s largest economy, may abandon multilateralism in favour of bilateralism and press ahead with bilateral trading arrangements of the type it has reached with Chile. Pakistan, by signing the Trade and Investment Finance Agreement, or TIFA, during the most recent visit by President Pervez Musharraf to Washington, has already joined the long queue of countries waiting to sign up with America. By taking a somewhat lower profile at Cancun, Pakistan may have improved its chances to conclude such an agreement. Senator Charles Grassley, chairman of the powerful committee on finance, warned the countries seeking such arrangements that he would judge their suitability by how they behaved in Cancun. As one analyst commenting on the collapse of Cancun noted, “Mr. Grassley’s remarks suggest US trade policy may in future be based on political favouritism and other countries’ willingness to support US interests. That would undermine the principle of non-discrimination central to the WTO and its equally fundamental tenet that all members have equal rights in law, irrespective of their size and strengths.

Third, the collapse of Cancun may lend full impetus to regional trading arrangements. Many countries, developed and developing, have already become members of RTAs. South Asia is the only large world region where such an arrangement does not exist, mostly because of the long enduring conflict between India and Pakistan. However, Pakistan should actively explore the possibility of RTAs not only with other countries of South Asia but also with its neighbours in West and Central Asia.

In sum, Cancun may have changed the history of global trade.

A farewell to Edward Said

Edward Said will be remembered in Pakistan for his great stature as a leading Palestinian of his day. His columns regularly animated the pages of this newspaper, and his close friendship with the great Pakistani intellectual, Eqbal Ahmad, was an inspiration to many.

When I heard about his death, my first reaction was a deep and overwhelming grief for a lost friend and admired role model. My second reaction was to wonder where he would be buried. I say this because the Israelis, who persecute the Palestinians in life, also do so in death. Edward Said’s dearest wish might well have been to be buried in his native Jerusalem. But his chance of that happening will be as small as that of my paternal uncle, the eminent nationalist poet, Abu Salma, who died in 1980. He passionately wanted that his last resting place should be a plot of earth in his native land. But, as with all such requests from the Palestinians, Israel refused and he was buried in Damascus, his adopted city after the nakba of 1948. Edward Said was a man of no less patriotism or devotion to the cause of Palestine.

I first met him in Libya in 1976. We were both the guests of Colonel Qadhafi at a conference on Zionism and racism, which was a favourite topic then following the UN General Assembly Resolution of 1974 on Zionism. I little realized at the time that when I met this rather shy young man how eminent he would later become. The next time I saw him was in New York in 1978 when his major literary work, Orientalism, had just been published. (It shames me to recall now how I tried to get a free copy out of him). Being no historian myself, I little appreciated the importance of the book. The storm of controversy it aroused was remarkable, and when I finally read it, I began to understand its significance. In this book, he exposes a fundamental aspect of the western approach toward the Orient: that much of western literature and scholarship about the East was coloured by colonialist attitudes and regarded the oriental ‘other’ as something less than human, an interesting object of study, rather like a zoo animal.

Like all great ideas, it seemed simple and instantly familiar, as if we had all known it for ages. But it aroused hostility and admiration in equal measure. He was criticized for his allegedly simplistic analysis of western writings on the East and of denigrating the genuine and painstaking work of many western scholars. Many pointed to the dearth of corresponding studies the other way around. How many eastern scholars can one point to who have studied the West with such care or even at all?

To my mind, there is something in these criticisms, but they still miss the point. For Edward Said’s real achievement is to have defined the dispossession that is at the heart of his scholarship. His writings are properly situated in politics of dispossession that have their springboard in his Palestinian origins. To understand his significance properly is to understand the recent history of Palestine. The country he was born in 1935 was a land ruled by a British colonial administration under a mandate granted by the UN in 1922. The environment of his childhood was colonialist and the Zionist enterprise, which had begun to flourish under British patronage at that time, was also colonialist. Although the Said family was affluent and his father a wealthy Christian businessman who afforded the young Edward a western-style education in expensive schools, the general parameters of Arab existence were inescapably colonialist.

These influences dominated his upbringing. Even his first name is a result of them, chosen by his mother after the Prince of Wales whom she admired; evidently no Arab role model inspired her to the same extent. When the Said family left Jerusalem in 1947, they went to Cairo where he attended an English-style public school. Arabic was forbidden at home, except when speaking to the servants. As Said himself has noted, this induced a split in his sense of identity during adolescence from which he never recovered. The establishment of the state of Israel in 1948 led to the forcible expulsion and flight of three quarters of a million Palestinians. This physical dispossession had its parallel in his spiritual dispossession and became a basic theme in his worldview. The Palestinian refugees’ right to return to the homeland they were evicted from was a central aspect of his work. Always he returned to the fundamental elements of the conflict between Israel and the Palestinians: the latter’s dispossession and Israel’s evasion of its responsibility for their plight.

From the start of Israeli statehood, that evasion took a path of obsessive denial. In order to maintain its fiction of innocence, Israel set about eradicating all traces of the Palestinian presence in the land. Over 400 villages were demolished and new settlements sprang up in their place. The history of ‘Israel’ that Israeli children learn at school is distorted to exclude the Palestinian presence.

An intricate mythology of Israel’s origin maps a Jewish continuity from Biblical times to the present, only interrupted by phases of transient settlement by Romans, Ottomans and British. If you knew no different, it is entirely possible to believe that no Arabs had ever existed in the country but for a few wandering Bedouin tribes. By such methods, the Israelis attempted to annihilate a whole people, their history, their memory, their language and their culture.

All Palestinians feel this insult of a double dispossession, aimed at their bodies and souls, their existence as a separate people with a history denied and their resulting sufferings unacknowledged. Edward Said felt this keenly and his writings reflect it in one way or another. Orientalism has to be understood in this way. The orientalist writers who described the Arabs, dispossessed them too, though elegantly and with erudition. For, a people who are re-created through the prism of an alien scholarship influenced by alien notions of supremacy, are robbed of their true identity. And that is a sort of dispossession too.

Abetting terrorism

I was in the United States on August 14, 1947. To be more precise, in Madison, Wisconsin, and not a soul in that city of dear hearts and gentle people and fine cheese would have heard of Pakistan. As I would learn through the years that I spent in that country and subsequent visits of shorter durations, the American people were far more clued up about outer space than they were about countries they considered to be far away places with strange sounding names.

The fault was not theirs. The fault was ours. Indeed, Pakistan’s main ‘image’ concern has been that we should not be confused with India. Remember how indignant we would get when we would get a letter misaddressed ‘Karachi, India’?

Over the years, a Pakistan image has shaped up. It is not a flattering image, almost wholly negative and those who have travelled abroad and presented the green Pakistan passport at immigration counters would have noticed how suspiciously this document is scrutinized and how unwelcome one is made to feel. In the 1960’s, Pakistan labour had started to migrate to Britain in large numbers and one PIA passenger had got smallpox after he had reached his destination in the Midlands. Alarm bells had sounded and the media got hysterical and Pakistani visitors were not only required to show their health certificates but were examined physically to demonstrate that they had been vaccinated.

Then came drugs, heroin in particular and Pakistan acquired the same reputation as Colombia and PIA’s crew was searched and kept under surveillance and sniffing dogs nosed through the luggage of the passengers. Brazil may have been the country where the nuts came from, a jocular throwaway line from the play Charlie’s Aunt, but Pakistan was the country where the heroin came from and this was no jocular throwaway line. It was Pakistan’s image.

And now there is terrorism. Pakistan may be a frontline state in the war on terror, it is also perceived as a country that harbours terrorists and Pakistan hardly mentioned on TV news channels before 9/11, now features regularly as a country that has to be watched and we are put in the company of countries whose people cannot wholly be trusted. While the government is mildly praised for arresting Al Qaeda activists and handing them over to the FBI, the perception is that the country is swarming with terrorists.

While Pakistan is absolved from having any links with Osama bin Laden, the world is constantly reminded that the Taliban may still be active and operating from Pakistan. It is conveniently forgotten that it was the United States that midwifed the Taliban and its mentor was the CIA. It was Dr. Frankenstein who had created the monster and when the monster got out of control, the CIA disowned it and suddenly the Taliban was turned into a satanic enemy. There is no mention at all of this piece of history in all the speeches that are being made about the war on terror. And it is Pakistan that is remembered as the country that had a cosy relationship with the Taliban.

There was a major bomb blast, two in fact, in Mumbai a few weeks ago and many died and scores were injured. Yet the New Zealand cricket team has not cancelled its tour of India and not even asked that the match scheduled for Mumbai be shifted to another venue. There was a minor bomb blast in an empty office building in Karachi, not a terrorist attack but some private disagreement and no one died and there weren’t even any injuries and the South Africans cancelled its cricket tour of Pakistan and agreed to tour after Karachi was omitted from the tour programme.

In the past, the West Indies and Australia had refused to tour Pakistan and the matches had to be shifted to neutral venues. Is Karachi any more dangerous than other cities of the world? The United States remains on a high or elevated alert and Homeland Security has turned that country into a police-state and its own citizens of Arab origin or with Muslim names are kept under surveillance, their movement monitored and their telephones tapped.

Britain does not make a drama of its security concerns but remains vigilant against Muslim communities. But its cricket team is setting out on a tour of Bangladesh. It hasn’t asked that its matches should be shifted from Dhaka. Is Pakistan’s geography the main problem? But the Al Qaeda, with its headquarters in Afghanistan struck at the World Trade Centre in New York city and the Pentagon in Washington DC. Geographic proximity does not seem to make it easier or more difficult. For the terrorists, the world is a global village. They too have learnt to use modern technology.

There is a cussed vanity about cricket teams that makes them believe that they could be targets of terrorism. In the grand scheme of things cricket teams are non-entities. Terrorism may be madness but the targets are carefully selected, a cricket match between Pakistan and South Africa would not even be a blip on the radar screen. But cancellation of cricket tours or the shifting of venues sends the wrong message.

It concedes to the terrorists the capability of striking at will, wherever and according to their timetable. It amounts to an admission that the terrorists have succeeded in disrupting normal lives and pursuing simple pleasures. Besides threatening to go after the terrorists in every cave, some reassurances should also be given that the world is not that dangerous that cricket matches should be cancelled.

One of the objectives of the terrorists is to spread fear. What happened to Franklin Delano Roosevelt’s famous call that “ we have nothing to fear but fear itself?” Governments that permit their cricket boards to cancel cricket tours, may be, unknowingly, aiding and abetting the terrorists. That’s something to think about.

Cutting US steel tariffs

No one would ever accuse the Bush administration of being eager to admit to its mistakes. But in the case of steel tariffs imposed by the president in 2002, such an admission is overdue. The tariffs were a diplomatic failure: Imposed just as a critical round of international trade negotiations was getting underway, they sent precisely the wrong message to the world at precisely the wrong time — namely, that the United States supports free trade in theory but not in practice. The World Trade Organization has condemned the tariffs and, depending on the results of an appeal, may well allow others to retaliate against the United States.

Now it seems that the tariffs were an economic failure as well. True, they have helped the steel industry recover from what seemed as if it might be a permanent slump. Steel productivity has risen. At a meeting of the Congressional Steel Caucus last week, the steel industry trumpeted its successes, which also include consolidation and plant upgrades that will, they say, better prepare the industry for competition. But a close reading of two reports filed last week by the International Trade Commission also shows that the tariffs are costing industries that consume steel more than $680 million annually. The ITC claims, defensively, that this loss is offset by the $650 million paid to the US government in tariffs. Since companies pass tariff costs on to the consumers, that simply means the American public is paying a $650 million hidden tax to the US government. Given its anti-tax rhetoric, this administration should find that unacceptable.

For the record, it doesn’t appear that the tariffs have been the political triumph for the president that they were supposed to be either. Instead of thanking the president for protecting industry, the steelworkers union has already backed one of his opponents, Rep. Richard Gephardt, in the 2004 presidential race. Nor will it be so easy, going into that election, for the president to claim that he “saved jobs” by imposing steel tariffs. — The Washington Post

Can capitalism co-exist with other systems?

THREE centuries of capitalistic experiment present a mixed picture of unprecedented achievements in the fields of economic development, productivity, creativity, and innovation, as well as disasters and inequities in social and human realms. Advocates and adversaries of capitalism agree on its tremendous wealth creating contributions.

It has been claimed, for example, that the volume and variety of economic achievements under its aegis have surpassed those of humanity in the entire pre-capitalist era. The alternatives to capitalism that have been tried and tested during the last one and half centuries, despite some positive contributions, have lagged far behind in their wealth creating potential, and have disintegrated under the weight of their own follies.

Capitalism on the other hand, seems to have survived all the vicissitudes of time. The pivotal role of the individual and the infrastructure of freedom, effort, opportunity, and meritocracy have established the credentials of the system and demonstrated its relative superiority over the alternatives that challenged it. The market mechanism, despite its weaknesses and failures has turned out to be a more efficient arrangement for economic decision-making. Moreover, capitalism has also shown remarkable inner resilience and a capacity to change, adapt, adjust, and create new forms, instruments, and structures to face new challenges both from within and without. The system has also shown a capacity to transcend geographical boundaries. While it is difficult to establish a causal relationship between capitalism and democracy, by and large, it can be inferred that the prospects of compatibility between capitalism, democratic processes, and freedom are relatively great.

There is however another side, which is rather ugly and distressing. The affirmation of individualism is a great human achievement, but individualism alone cannot ensure a healthy and harmonious social system. Society and state are important aspects of human life. Individuals do not live in vacuum. They live among other humans and a network of institutions. A healthy, just, and sane society comes into being only if there is a balanced relationship between the individual and society. In any society there are bound to be conflicts of interest between individuals, but every system needs to develop mechanisms to resolve those conflicts in a manner that the well-being of the individual and the welfare of society are both achieved. Personal good and public good make up the matrix of a balanced society. If socialism erred on the side of collective extremism, capitalism’s failures can be traced to its emphasis on an unbridled individualism.

Around the mid-18th century, today’s major capitalist countries and most of the Third World countries were roughly at identical levels of economic development and well-being. Three centuries of capitalist development have changed the situation to such an extent that, at the advent of the 21st century, the richest countries of the world with only 20 per cent of the world’s population, own 87 per cent of the world’s GDP; the corresponding share of the remaining 80 per cent of the world’s population is only 13 per cent. This seems to be the unavoidable result of the logic of the market place, and underpins the need for extra-market arrangements to redress the situation.

Economic development has been a positive achievement, yet there are strong reservations as to how far this has led to the welfare and well-being of all sections of society. Human needs have an objective dimension, but needs as such are not of direct relevance to the calculus of capitalism. What is relevant are wants, i.e. needs backed by purchasing power. This, then introduces a major new dimension into the equation. Purchasing power is determined by the distribution of income and wealth in society. But when an economy suffers from gross inequalities, its priorities of production and consumption are not in keeping with the needs of the majority of people in that society. This is the dilemma of capitalism. The market responds to subjective wants, not objective needs. While some inequalities of income and wealth are acceptable, even inevitable, in order to maintain effective incentives and achievement-oriented rewards, extreme inequalities distort the entire spectrum of a society’s productive and consumptive priorities.

Capitalism claims to be a universal system based on a set of natural principles. Its global reach is undeniable. But its inclusiveness and social desirability is open to question. How far its politico-cultural context remains an inalienable part of its economic ethos remains debatable. What is universal and adaptable by others, and what is specific to its Euro-American historical background and cultural ethos? Is it possible, then, to detach its principles and precepts from the moral values and traditions that acted as the womb for the gestation of the embryo of self-interest into its economic imperative? Self-interest, as such, has been a great creative force. But once it is promoted as the only motivating force, the normative considerations that could safeguard social interests are marginalized.

When the market mechanism becomes the sole arbiter of the desirable and undesirable — a virtual source of values — the result is that ethical norms are gradually eroded and the dimensions of justice grossly violated. The realities about different countries’ varied levels of development and socio-cultural aspirations do not admit the relevance of one economic model for all societies or provide a mosaic for contemporary mankind. The global economy, like global society, cannot be encased in one model. Instead, an open and just world would have to be genuinely pluralistic, with link-ups and inter-relations that enable all people, societies, and states to reap benefits through co-operation as much as through healthy competition.

This view of the vast majority of intellectuals of the Third and Muslim worlds is shared by several enlightened thinkers in the West. According to Lester Thurow, the danger is not that capitalism will implode as communism did. Without a viable competitor to which people can rush if they are disappointed with how capitalism is threatening them, capitalism cannot self-destruct. Pharoanic, Roman, Medieval and Mandarin economies also had no competitors and they simply stagnated for centuries before they finally disappeared. Stagnation, not collapse, is the danger. The intrinsic problems of capitalism visible at its best (instability, rising inequality, proletariat) are still out there, waiting to be solved, but so are a new set of problems that flow from capitalism’s growing dependence on human capital and brainpower industries.

The issue is not merely one of brainpower. More importantly it relates to the whole moral, social, cultural, spiritual, and political context of mankind. The shift of emphasis from machine to mind represents a qualitative shift in the global human situation. This brings the moral question to the centre of the debate and consequently concerns for justice become the real focal point, as against exclusive obsession with material affluence, development, and efficiency.

For much of the last 150 years, socialism has presented a major challenge both to the concept and content of capitalism. However, the initial socialist challenge did not build its case on purely economic grounds. Robert Owen, St Simon and others challenged the system on its moral and egalitarian failures. Marx and Engels gave the critique a different twist. Their so-called scientific socialism transformed the language and substance of the challenge into exclusively materialistic and historical terms. In the name of science, a new form of economic and historical determinism was unfolded. Liberal governments responded to these challenges and to those generated internally by a free market system, by introducing more socially acceptable or welfare-based, economic policies; by accepting the concept of the mixed economy; or recognizing the possibilities of a convergence between different varieties of capitalism.

The search for some kind of new consensus can be discerned from discussions in 2001 at the UN conference at Durban and WTO summits at Doha and at Cancun. The fact that the World Economic Forum moved from Davos to New York in 2002 in search of some common ground is meaningful. Concurrently with this meeting, another platform, the World Social Forum, stole the show in Porto Allegre, Brazil, addressing some of the burning issues. The Monterrey Consensus in 2002 also had a flavour markedly different from that of Washington Consensus.

Global capitalism is now being challenged on two fronts: (1) by its own internal weaknesses, contradictions, and inequities, and (2) by the response of Muslim and Third World countries. With capitalism riding the current wave of globalization, the real challenge lies not in ‘Unity in Diversity’ but in establishing an open society with a genuine plurality of systems and options, and which offers a diversity with unlimited scope for co-operation in the pursuit of shared values and common interests.

The conclusion is that global capitalism is capable of coexisting with other systems; and because of this there is no need to assume that all societies and cultures must try to become a variant of capitalism. This does not preclude the possibility of vast areas of shared values, interests, and aspirations, and also scope for co-operation, interaction, and competition. Even interdependence, prompted by variations in resource-endowments, specializations, and comparative advantage is not ruled out. Instead, what is being questioned is the hegemony of one system, and a relation of dependence that impinges upon political freedom, cultural integrity, economic self-reliance, and — perhaps most important of all — moral and spiritual identity.

The writer is a senator and chairman of the Institute of Policy Studies, Islamabad.