Globalisation’s dark side

GLOBALISATION had become all the rage by the time the 20th century drew to a close. Most economists and policymakers believed that they had finally found a way to organise the world economy. What Adam Smith had advocated a couple of centuries ago began to be practised as state craft. Barriers to trade and capital flows came down, albeit more for the former and somewhat less for the latter.

People also began to move across international borders in search of jobs and security with relative ease. A number of western nations instituted programmes for bringing highly skilled people from the developing world to meet the skill shortages their economies had begun to face. The world seemed a happy and contented place. Although some economists had talked and written about globalisation’s downside and its discontents, the 20th century ended with the world generally in a euphoric mood.

But the sentiment began to change; slowly first but then much more rapidly as some of the impact of globalisation came to be noticed. The terrorist attacks on the United States on September 11, 2001, did not help either. Suddenly people began to talk about globalisation’s dark side. There were many areas of worry. There was disagreement over the regulation of trade, discomfort with the loss of jobs as outsourcing became a popular cost-saving practice for western corporations and continued migration of workers from developing to developed countries caused many concerns.

In negotiations concerning the further evolution of multilateral trade, major trading nations found it hard to give up on protection and subsidies they continued to offer their farmers. The farmers constituted a very small proportion of the workforce in most developed nations but they wielded enough political power to block progress in the Doha round, the multilateral trade negotiations launched in late 2001 from the capital of the Gulf state of Qatar. This round was called the “development round” in the expectation that it would ease the constraints that remained on developing countries’ exports to the developed world.

In spite of the globalisation of trade in the last quarter of the 20th century, rich countries had continued to discriminate against the exports of developing countries. Some of these exports were the only products the poor produced.

The Doha discussions got stalled in 2006. The United States wished to see a larger cut in tariffs on farm imports than the European Union felt comfortable with. The Europeans wanted a sharp reduction in the farm subsidies the Americans provided their farmers. Both Europe and the United States wanted large and rapidly growing developing countries such as Brazil, China and India to give up on some of the preferential treatment they had enjoyed within the current structure of multilateral trade.

These differences proved difficult to resolve particularly in view of the fact that several large developing countries felt that they now had the economic strength to resist rich countries’ pressure on them.

Trade was not the only issue that began to concern most major economies. Several people in developed countries were troubled by the impact of outsourcing of manufacturing and business processes to the developing world. A number of programmes to help the workers who had lost their jobs were launched in both Europe and the US. Economists who favoured globalisation maintained that the loss of jobs could not be entirely attributed to the greater integration of the world markets.

In this they were supported by facts but not by popular sentiment. In the US about one in seven jobs — 20 million in all — were being lost involuntarily every year.

Only a small fraction of those, some two million to three million a year, or two per cent of all jobs, were regarded as permanent losses where workers had little prospect of return. The displacement rates in Europe were similar.

Politicians in both places came under pressure to save these jobs. Although their loss was attributed generally to globalisation, research indicated that most of it was due to technological change. And, even if displacement was caused by outsourcing, the overall benefit to the economy was still enormous. The United States spent around one billion dollars a year to help trade-displaced workers.

However, according to one estimate, the overall economy benefited from one trillion dollars a year because of freer trade. Reducing trade and capital flow frictions had brought enormous benefits to the United States at little cost. The same was certainly true for Europe.

Large-scale migration from developing to developed countries was another concern in rich nations even though, once again, there were enormous benefits accruing to the economies that received workers. The sharp drop in fertility rates in industrial countries had produced serious shortages of workers. Those countries that allowed immigration were able to overcome the problems associated with fertility declines and declines in the rate of increase in population. America was an example of a country that had benefited enormously from immigration.

However, the country was no longer receptive to receiving another wave of migration, in part because of the fear of terrorism. Borders were being closed as far as feasible and the access to the country was being severely limited.

In other words, there was retreat on all three fronts in which globalisation advanced to make the world a smaller place to do business in. Politicians in democracies needed to respond to public opinion. Would they act to slow the process of change that defined globalisation?

This was not a hard question to answer for there were enough straws in the wind to show which way the political wind was likely to blow. Led by America — and in America led by the resurgent Democrats — public policy was likely to be less accommodating of change that was bringing about the relocation of jobs. The Doha round of trade talks could still make progress and an agreement may still be reached on tariffs, on farm products, and subsidies to farmers. But governments are likely to try and make outsourcing a more expensive proposition for the business communities.

Similarly, governments will try hard, at least for a while, to have fewer people come to work in developed countries from developing nations. The focus in America will be on immigration from Mexico. Most of it was illegal but most of it was welcomed by the businesses that could not produce profit without the cheap labour illegal immigration brought to the workplace.

A political battle will ensue and will be fought for a long time between those who need cheap workers and those who fear that their larger presence would endanger their culture and lifestyle.

The warning that immigration was culturally transforming America in unattractive ways was issued in a book by Harvard University’s Professor Samuel P. Huntington. He was the same person who brought the idiom of “clash of civilisations” into political discourse. The new book was received with as much excitement as the book on the Clash of Civilisations.

In Europe, the battle against immigration was being fought on a different front. Its main aim was to slow down what many in the continent feared was the rapid Islamisation of their part of the world. Islam in Europe was often a religion of the underprivileged, the disadvantaged, and the dispossessed. This was certainly the case with the young people who lived in shabby places on the outskirts of such large cities as Paris and Marseille.

The same was true of such large cities in Britain as Birmingham and Manchester. The face that Islam presented in Europe in the early 2000s was very different from the face it showed in the United States. The Islam that much of Europe was seeing was that of the angry young men in the suburbs of Paris or the crowded slums of Birmingham and Manchester. It was viewed as a religion that was not prepared to let its young adherents assimilate into the cultures of the majorities in which these people now had a physical presence.

In addition to the problems that could be attributed to the changes wrought by globalisation and that were affecting people in the developed world, there were also issues that concerned those who lived in the world’s developing parts. Foremost among them was the widening of the gaps in incomes between the world’s poor and rich nations.

This growing disparity was more of a concern for the “left” in the political spectra around the globe than for ordinary people in the developing world. Sometimes this fact about widening inequalities was used by groups in industrial countries that were afraid of globalisation for their own reasons.

Labour unions and labour leaders in America and Europe wished to have labour standards incorporated in trade agreements not because they were seriously concerned about the conditions in which the workers worked in developing countries; frequently their objective was to dull the competitive edge by raising the cost of labour in developing countries.

Some political analysts began to argue that a unipolar world dominated by one power was inherently unstable. It became even less so if that power preferred to act alone. This was done by President George W. Bush’s America since the trauma of 9/11. But monopolies are bad not just for economics. They are also not good for politics.

As in economics, the presence of monopolistic power creates resentment on the part of those most affected by it. It also presents an attractive target for those who wished to humble it. This was why Microsoft became such an attractive target for hackers around the globe. For the same reason, America was the target favoured by terrorists operating in many parts of the world.

According to Steven Weber and his associates working in political science at Berkeley, California, “the world today is more dangerous and less orderly than it was supposed to be. Ten or 15 years ago, the naive expectations were that the end of history was near. The reality has turned out to be the opposite. The world has more international terrorism and more nuclear proliferation today than it did in 1990. International institutions are weaker. The threats of pandemic disease and climate change are stronger. Cleavages of religious and cultural ideology are more intense. The global financial system is more unbalanced and precarious. It wasn’t supposed to be like this…The bad news of the 21st century is that globalisation has a significant dark side.”

Renaming the NWFP

ACCORDING to a press report, the NWFP government is striving to achieve consensus on giving the name ‘Pakhtunkhwa’ to the province and has appointed a committee for this purpose. Following the publication of this report, a controversy has ensued in the national media over the proposed name and its ramifications.

The protagonists of the proposed name argue that it was in line with the nomenclatures of other provinces in the country, namely Punjab, Sindh and Balochistan, which also reflect the ethnic identities of their inhabitants. It may, however, be mentioned that Punjab was given its present name centuries ago by the Iranians because it was the land of five rivers. Similarly, the Arabs gave Sindh its name because of the river that flows across its territory.

As regards Balochistan, although its history is somewhat obscure, it is generally believed that notwithstanding the fact that its inhabitants belonged to different tribes and clans and spoke different languages, at different times, it has been carrying this name from time immemorial. The Britishers used to call it British Balochistan.

It is thus clear that the names of the existing provinces in Pakistan, including the NWFP, have had no relationship with their linguistic or other affiliations that continued to change from time to time as part of the historical process. It may also be pertinent to mention that in the subcontinent almost all the provinces were given their names indicating their geographical location.

The founding fathers of Pakistan also followed this policy and deliberately avoided the identification of the provinces with the languages spoken by their inhabitants in order to inculcate in them a deeper sense of national unity. They were fully conscious of the fact that Pakistan was one of the most ethnically and linguistically complex states in the world, and they were therefore keen to forge a spirit of unity and cohesion among its people regardless of their place of origin, language, racial and ethnic affiliations.

The people of the NWFP have every right to demand a new name for their province if there are indeed cogent reasons to do so and if there is a general acceptability of a proposed name by its inhabitants, including those living in areas like Hazara, Chitral, D.I Khan, Bannu, Kohat and Peshawar where Pashtu is not the dominant language. However, the proposed name ‘Pakhtunkhwa’, if seen in the historical perspective, has negative connotations.

In 1947, when the terms of the referendum gave the usual two choices to voters in the NWFP — either join the existing Indian Constituent Assembly or opt for a new assembly — Khan Abdul Ghaffar Khan, the Red Shirt leader, urged that the electorate of the NWFP should also be given the opportunity of voting for an independent ‘Pakhtoonistan’. The Congress leaders, especially Gandhi and Nehru, supported this move but the viceroy overruled it.

In the referendum when the people of the NWFP overwhelmingly voted in favour of Pakistan, it was believed that Pakhtoonistan was a closed chapter. After the partition of India, Khan Abdul Ghaffar Khan also declared that the demand for Pakhtoonistan did not mean the creation of a separate state but was aimed at seeking full autonomy for the NWFP within Pakistan.

It was, however, only a tactical move on his part. The cry for Pakhtoonistan that was taken up by Khan Abdul Ghaffar Khan, at the instance of the Congress leaders, was now pursued by the rulers of Afghanistan through malcontents such as Faqir of Ipi and some others. The Afghan government has also been trying to subvert the loyalty of the tribes on Pakistan’s side of the Durand Line for this purpose.

The exponents of ‘Pakhtoonistan’ refuse to accept the internationally recognised Pak-Afghan border on the plea that the 1893 agreement establishing this border was signed by the then ruler in Kabul under duress. This is, however, a deliberate distortion of the truth. In order to avoid any dispute regarding the sovereignty of Afghanistan, its ruler, Amir Abdur Rahman, was himself very keen to define his country’s border with British India. He requested the viceroy, Lord Dufferin, to send a team of officials to Kabul to negotiate and settle the question of a border between the two countries.

Accordingly, after protracted negotiations between the British and Afghan officials, an agreement was signed between the two countries in a friendly spirit. This agreement was also confirmed by further treaties in 1905, 1921 and 1930. Those who question the validity of the existing international border between Pakistan and Afghanistan actually call into question Pakistan’s territorial integrity and violate the principles of the UN Charter of peaceful co-existence and of the Non-Aligned Movement. Needless to say, neither the Durand Line agreement nor any subsequent treaties relating to the Pak-Afghan frontier was open to question.

The Afghan government is fully aware that the national destiny of the Pashtun and Baloch people of Pakistan as of the rest of the people was determined by them freely and jointly when they decided to establish the sovereign sate of Pakistan in 1947. It is, therefore, extremely regrettable that it has deemed it fit to interfere in the internal affairs of Pakistan on illogical grounds, as a result of which relations between the two countries have deteriorated.

Some people believe that this could be part of some international conspiracy to destabilise or even fragment Pakistan and destroy the reality of its being a strong nuclear Muslim state. However, there is no room for complacency and the policymakers in the country should, therefore, find a politically viable means of dealing with the widespread unrest in Balochistan and elsewhere before the situation gets worse.

The writer is a former ambassador.

Bush’s irrational policies

WHY is there so much surprise over the “surge” of US troops to Iraq? Sure, the decision seems so foolish that only a third of the American citzenry can stomach it. Indeed, another third of the American people suspects that George W. Bush and Dick Cheney were complicit in 9/11 — if only by ignoring the Al Qaeda threat — insofar as their corporate cronies are the only ones to prosper from cynical policy responses.

Also, the midterm November elections — that saw a Democrat majority in Congress — can hardly be read as anything other than a long overdue public repudiation of Bush and all his miserable works. Surveys among the troops themselves show a waning enthusiasm for a deeper engagement in Iraq. The rest of the world has largely come to view the Bush administration with the same wary contempt in which it has treated them. How can you take anyone seriously who praises freedom but practises torture, preaches frugality but spends madly, lauds the truth but tells lies without limit?

So is this latest escalation just another senseless act by a typically clueless White House? Perhaps Bush’s stubborn behaviour stems from some psychological defect? Well, if one considers greed a psychological defect the answer is yes.

In foreign affairs the cause usually lies in material interests, in grabs for resources and power, even if the policies favour a tiny minority at the expense of the vast majority. The whole point of propaganda, after all, is to pretend that the “common good” is all that leaders care about As we approach the fourth anniversary of the Iraq invasion, the last question anyone in mainstream media will ponder is whether the dominant motive all along has been the control of energy resources under Iraqi soil — and beyond, if possible.

It sounds a bit crude but every move the Bush administration makes hinges on this obvious goal. So another 21,500 troops alighting in Iraq is no shock. Even the recent Baker-Hamilton Study Group Report, though urging a troop wind-down and advocating talks with Syria and Iran, wants some 70,000 troops stationed in Iraq bases for the foreseeable future. Bolstering Israeli interests in the region is a concern as well but only insofar as they are deemed compatible with US interests — as narrow or misconceived as these interests may be. Why is this simple point so difficult to comprehend?

In London in February 2003, a month before this concocted war, one of us participated in a televised “Question Time” audience, of which a sub-group was asked to consider whether oil was the key motive for invasion. Of three dozen in the group — numbering economists, business people, media figures and university lecturers — every one endorsed the supposedly “sophisticated” proposition that oil had nothing to do with Bush and Blair’s eagerness to snuff out Saddam Hussein. The real reason had to be those weapons of mass destruction that the US and UK governments insisted were parked behind every Iraqi public washroom and garden shed. Governments wouldn’t lie, would they?

The professional classes everywhere are admirably well-trained, with precious little critical thinking consequently in evidence — at any rate, a good deal less of it than among average citizens. The privileged classes prize their nuances, and wear them like blinders. Of course, it is risky for such ambitious folks to go against the grain, even if mainstream opinion is shaped, in the short run anyway, by canny state policymakers and an acquiescent media. The Iraq situation, of course, has changed and so have memories. It’s amazing how many prominent people who applauded the 2003 invasion no longer recall having done so.

For Bush’s cronies the dividends of waging an ill-defined endless war on terror have been delightful. Since Bush gained power in 2000 the Pentagon budget swelled by half, from $300 billion to $455 billion. The post-9/11 period is a gaudy spectacle of a non-stop feast by war profiteers at the public trough in return for often shoddy products and services.

Naomi Klein, among others, uncovered how the so-called “reconstruction budget” was divided among influential insiders long before the unjustifiable invasion. She points out that many tens of thousands of western contractors prowl around Iraq (though mostly within the Green Zone), avidly fleecing both it and the American treasury. One result is entirely predictable. As the Iraq Study Group admits, 61 per cent (a low estimate) of Iraqis approve of attacks on US soldiers. It was never on the cards no matter how many troops pounded the ground that Iraqis would embrace an occupation designed to siphon off their natural resources.

Bush’s free trade radicalism (and that of many a Democrat too) has nothing in common with conservative tenets about small government, fiscal rectitude and community values. Unregulated markets are usually the policy of strong elites preying upon the weak. UN development reports only confirm that trade liberalisation fuels jobless growth. The Asian export boom has been accompanied by greater inequality and higher unemployment. China grows at 10 per cent per annum but jobs at one per cent. Elsewhere, a majority of Russians even lament the end of the Soviet Union, for economic shock therapy has brought them chaos and poverty. The Bush coterie is not too shy to inflict the same treatment at home if it can get away with it.

The Bush administration, packed with former Likud advisors, aims to reshape the US to resemble Israel. The “permanent war” on terror is, as in Israel, a handy all-purpose excuse for elites to operate without legal restraint. The lawless mistreatment of targeted minorities and dissidents is frightfully similar. (One crucial difference, ironically enough, is that Israeli media are more diverse, candid and oppositional than is the case in the timid US.)

Invoke security and authorities get a carte blanche. So, for the militant right in America as well as Israeli counterparts, nothing is more dreaded than peace. An aggressive foreign policy is a self-fulfilling prophecy in that it creates its own enemies. So, for example, a prospective Iranian nuke, which even former Reagan henchman John Negroponte says is many years away, is just what Israeli policies make inevitable. Israel wants to carry out air strikes on Iranian nuclear enrichment facilities anyway, hopefully isolating Syria and preventing Hezbollah from getting Iranian supplies.

Only American qualms about a vengeful Iran shutting down the Straits of Hormuz — where 20 per cent of the world’s oil transits — keep Israel in check. Meanwhile, Israeli forces are, in the words of an Israeli journalist, “rampaging through Gaza,” with some 500 Palestinians killed there since the “withdrawal”, which most Americans were led to imagine by their skewed media was total and sincere.

The vitriol pouring on former President Jimmy Carter’s book Palestine: Peace Not Apartheid shows both the power of the Israeli lobby as well as their weakening grip on the public sphere. Carter only affirms what anyone outside the US can glean from news reports, that, despite rhetoric, Israeli policies intend that “the Palestinians will be left with no territory in which to establish a viable state, but be completely enclosed within the barrier and the occupied Jordan River valley.”

Likewise, Carter recognises, the roadmap is only “a delaying tactic with an endless series of preconditions that can never be met while proceeding with plans to implement its unilateral goals.” The holocaust for a basically Machiavellian leadership is wielded almost as a license to kill. The suffering inflicted by European fascists on Jews somehow ordains some Israelis to inflict any misery short of mass extermination on Arabs in the occupied areas. Carter’s book is a brave way to get the truth of the occupation out so that a sane resolution might be achieved. But, make no mistake, the US would ditch Israel if national interests ever dictated it.

Everything is rational, psychologists say, if you truly try to understand the point of view of the person who seems to you to be acting crazily. So the Bush administration, despite a disastrous Middle East intervention and its comeuppance in the 2006 election, presses ahead with its hoary old agenda anyway. What else can they do? The profound depths of this kind of rationality stand to be explored as Democratic Congressional investigative committees get under way looking into the vast waste, fraud, and multitude of abuses marking Bush’s idea of reasonable rule.

Assessing the risk

THE balance between risk and uncertainty is not easy to judge in a situation where known dangers can be transformed by biological change. There is no certain ground on which the government can pin its response to the outbreak of the H5N1 strain of avian flu on an industrial poultry farm last week. It must manage fears with one eye on the generally good record of past outbreaks and one eye on the much greater threat which may follow.

At worst, this threat is very great. The NHS contingency plan for an influenza pandemic warns that “around a quarter of the population could be affected with over 50,000 deaths in the UK alone”. Little is certain about how the disease will evolve. What is clear is that as things stand the risk to humans is low. There have been tens of millions of cases of avian flu (worldwide) but fewer than 200 laboratory-confirmed deaths among humans.

Will this relatively secure situation last? If it does, avian flu poses little more risk than the outbreak of foot and mouth, which swept through British livestock in 2001. But as the World Health Organisation warns, “the virus has met all the prerequisites for the start of a pandemic save one: an ability to spread efficiently and sustainably among humans”.

Britain’s industrialised poultry sector, once infected, aims to stamp out infection through rapid mass slaughter of flocks. Awful though that sounds, it should contain the present outbreak. But if, somewhere in the world, the virus mutates to transfer between humans, this might not be enough to prevent a global pandemic.

—The Guardian