Constructive Dialogue on Globalisation Issues
2001: Butchers' Hall, London
World trade and citizenship with a global dimension
This conference was specifically designed to allow Year 12 students to explore a range of development issues and deepen their understanding of how the private sector can make a substantial contribution to improving the long-term prosperity of developing countries. The key themes were identified as follows:
- Free trade, fair trade, open trade;
- Generation of wealth and eradication of poverty;
- Expansion of trade and development of the economic, social and physical environment;
- Health, education and community investment;
- Sustainable development.
It provided a unique opportunity for students to hear first hand from a range of companies operating in the developing world and to share views and experience with other delegates representing, government, the media and NGOs.
Sir Roger Cork opened the conference with a welcome to the Butchers' Hall and some kind words about the background to the world trade project initiated by Worldaware and supported by the Worshipful Company of World Traders. He introduced Andrew Fraser, independent adviser Mitsubishi Corporation. Andrew emphasised interdependence and the need for further dialogue between the sectors.
The cancellation of the summer 2001 World Bank conference in Barcelona, and the media spotlight on proceedings of this year's AGMs of the insurance company CGNU and of the energy company BP. What do these events have in common? Add to this the names of four well-known cities: Seattle, Washington DC, Prague, Quebec City. The common feature is the fear, rather than the celebration, of the potential impact of globalisation.
Globalisation - what is it? The term is bandied around in different ways, and it is not always clear what people mean. There is no single agreed definition. Most commentators suggest it has something to do with integration, interdependence, 'connectedness', the communications revolution, and the rapid evolution of the private sector into global players. The key concept is 'interdependence' in so many ways - politically (the growth in supranational governments and institutions), economically (the impact of rise and fall of national economies across the globe), socially (greater mixing of cultures), environmentally (global warming).
If this is what is happening, is it a good thing or a bad thing? Can its development be shaped so that the majority of people benefit? Does it matter? Everybody has a different take on this. What is the evidence? Statistics as ever can be misleading - what are people's senses telling them? But some statistics can provide a context for the debate. Here are a few:
The World. If the world comprised just 100 people, there would be:
- 57 Asians
- 21 Europeans
- 8 Africans
- 52 females
- 48 males
- 70 non-white
- 70 non-Christian
- 11 homosexuals
- 6 people possessing 59% of the entire wealth (almost all from the US)
- 23 living on less than 60 pence a day
- 80 living in sub-standard housing
- 70 unable to read
- 1 having any form of higher education
- 1 owning a computer
The private sector. DaimlerChrysler, General Motors, the Ford Motor Company and Wal-Mart each have an 'economy' (total sales) in excess of the total GNP of South Africa or Thailand or Saudi Arabia. There are now about 63,000 trans-national companies which own around 690,000 foreign affiliates - the top 100 TNCs have assets in the order of $2trillion. What does this mean for the role of the private sector in future? And for the role of governments?
Trade. There is 12 times more world trade in goods and money than there was in 1945.
Health. Around 22 million people have died of AIDS since the 1980s, with 16,000 new HIV infections each day: over 90% are in the developing world. Average life expectancy has fallen by 20 year in many sub-Saharan African countries. The economic costs in health and lost productiveness are massive.
Investment. Foreign direct investment to developing countries increased by over four times between 1992 and 1999, and now accounts for three times as much as aid money provided by governments. But the risks of investment mean that most of this investment goes to the larger and more industrialised countries.
Global governance. Barriers to world trade have reduced in the last 50 years, through complex multi-lateral negotiations, which have led to the setting up of the WTO. The best evidence suggests that on average this has benefited poor people and poor countries as much as the richer.
Environment. Energy: consumption of energy is rising inexorably, and is unequal, with high income countries using over ten times as much energy per capita as in South Asia and sub-Saharan Africa. Water: over the last 300 years, the world's population has increased seven times, but water use has increased 35 times. By 2020, demand for water may increase by another 40%.
'The rules are changing.' However all this is interpreted, it means that the role of the private sector, and as importantly, people's perceptions of what that role should be, is under close scrutiny. Profit is no longer the only motive, although it remains the vital one. Reputation matters, community benefits matter. Examples abound to attest to the shift in corporate strategies and roles:
- Drugs in sub-Saharan Africa
- Slave labour in cocoa smallholdings
- Sweat-shops in the T-shirt and trainer supply chain
But how far should the role of the private sector evolve? The cry from some quarters is 'people before profits'. But there is a danger of misunderstanding. It is only by seeking opportunities for profit that business can contribute to social and economic development.
Who is responsible anyway? Who are the stakeholders in the globalised world?
- International institutions (World Bank, UN, WTO, etc)
- Regional institutions (EU, Free Trade Areas, etc)
- G7, G8, G20, G77 etc
- National governments
What role should each play? How should they relate?
What are the global challenges? Some are:
- The International Development Targets (the main one being to halve the proportion of people in the world who are living in abject poverty by 2015)
- The need to agree on how world trade should be governed in future
- Improving world health
- Counteracting Global warming
- Ensuring fair governance and political stability
- Improving human rights
- Reducing conflict
The conference is not about saying who is right and who is wrong; nor about listing all the problems in the world; but about seeing how the interests of all stakeholders can be married in a way that brings benefits to the largest numbers. You will have a range of issues to debate and tasks to undertake: all will demand you reach a conclusion on what are the key issues and where responsibility for achieving results lies. These are real and important matters if we (and that means you) are going to protect and develop what is important for the world.
Remember: everyone here has a legitimate point of view, whatever sector you are most familiar with. We hope you will both contribute those points of view and listen carefully to others.