There is a growing feeling on the left that globalisation is the new pariah: the 21st century equivalent of colonialism, but with anonymous businessmen and financiers taking the place of monarchs and the East India Company. Globalisation has become a byword for exploitation and inequality, and the focal issue for the radical left in Britain.
There is disagreement between the current government and the wider left about the pros and cons of globalisation. War on Want, like other development charities, campaigns for an end to global poverty, and as such recognises that while globalisation can bring development and growth, it can also exacerbate inequality.
The left and non-governmental organisations play an essential role in monitoring the effects of globalisation and challenging its negative manifestations. For War on Want, which sees its 50th year of anti-poverty campaigning this year, this role has included exposing sweatshop labour and poor conditions in export processing zones, campaigning for development funding to replace military spending in areas of conflict such as Israel and Colombia, and funding literacy and employment projects run by local people.
We do not presume to know what is best for people, but instead fund sustainable projects with long-term aims that will continue to grow and flourish long after our involvement has ceased.
We have worked with textile workers in Bangladesh, arranging for British trade unionists to visit factories in Dhaka and talk to their Bangladeshi counterparts about work conditions and the way globalisation is affecting the garments sector in the developing and developed worlds. We have also accompanied trade unionists to Haiti, where Grand Marnier plantation workers have won concessions on pay and conditions from the drinks giant, while fellow workers continue to lobby Cointreau.
War on Want has been at the forefront of campaigning for the radical and innovative Tobin Tax on currency speculation, named after the Nobel Prize-winning economist James Tobin. Our demand for a tiny tax on currency speculation, to stabilise erratic markets and raise funds for development, has proved popular among the public. This initiative could raise billions for debt relief, while helping curb the kind of speculation excesses that led to the South East Asia crisis in 1997-98.
The tax won the support of 147 MPs during the last parliament, and has been discussed by the G7 finance ministers and the leaders of the European Union this year.
The Belgians, current holders of the European Union presidency, will place the tax firmly on the European agenda later this year. As part of his published programme for the coming six months, the Belgian Prime Minister, Guy Verhofstadt, has promised to raise the issue at the informal meeting of European finance ministers in Liege in September ‘since this represents the will of the Belgian government majority’.
Global support for the tax is growing all the time. Indian Prime Minister Atal Behari Vajpayee has backed a Tobin-style tax on transfers between developed countries, suggesting that the money raised could be credited to a Global Poverty Alleviation Fund. The Swedish deputy Prime Minister, Lena Hjelm-Wallen, has also declared her strong support.
Finland and Canada are also enthusiastic, as are billionaire financier George Soros and International Development Secretary Clare Short. Mr Soros stated in March that it ‘could be a very good source of funds for providing global [public] goods’, while Ms Short told a Commons committee earlier this year that the tax was ‘a very attractive idea’. But she has also questioned the likelihood of generating the necessary international political will.
However, the United Nations appears to have lost its initial enthusiasm for the idea. Last year 147 countries agreed to commission a report into the feasibility of the tax, on the basis that it could potentially be one of a number of ‘new and innovative sources of funding for social development and poverty eradication programmes’.
A report from a high-level UN panel preparing the groundwork for a major international conference on Financing for Development is distinctly cool towards the Tobin Tax. While acknowledging that a tax of as little as 0.1 per cent on currency speculation would raise $400 billion annually for investment in development, the report is sceptical that global agreement could be reached, and suggests that speculators would simply find a way to avoid the tax.
But, unlike the World Trade Organisation and many world leaders, the report does admit that globalisation is exacerbating poverty in the developing world: ‘Even where poverty is declining, globalisation is making the poverty that remains – and the illiteracy, and ill health – increasingly oppressive.’
The Financing for Development Conference is due to take place in March 2002 and War on Want, alongside other NGOs, is preparing to intervene to lobby for the Tobin Tax, more radical action on debt cancellation, and more innovative ways of raising funds for aid and development.
The UN has also established a set of ‘international development goals’ that must be met by 2015. They include halving the proportion of people living in extreme poverty, who are hungry and who lack access to safe drinking water; achieving universal primary education and gender equality in education; and accomplishing a 75 percent decline in maternal mortality and a two-thirds decline in mortality among children under five.
However, it could be that these targets are too ambitious. No matter what efforts governments make to reduce debt repayments – and the G8 leaders have reduced debts by up to 100 per cent for the most heavily indebted countries – unless the World Bank and International Monetary Fund are prepared to play their part, many countries will continue to spend more on debt repayment than they do on health care.
The World Bank and IMF refuse to cancel more than half of debts outstanding to them. Fifty eight cents of every dollar that Zambia pays out in debt service in the next five years will go into the coffers of the World Bank and IMF, while 40 cents or more per dollar will flow in the same direction from Uganda, Mali, Malawi, Burkina Faso and Benin.
In all, because of the refusal of the two institutions to match the pledges of the G8 nations, the top 22 most heavily indebted nations will be denied more than half a billion dollars every year for the next five years – and the payments will continue long after that.
And yet the truth is that rich countries can afford to write off these debts. In a study commissioned by Drop the Debt, City accountants Chantrey Vellacott DFK gave an independent verdict that there are substantial resources available to the World Bank and IMF with which to clear the entire outstanding debt of the highly indebted countries. In the accountants’ opinion, this exercise would not affect the two institutions’ ability to carry out the rest of their work effectively. The World Bank and the IMF have not challenged these findings.
It is good that the Labour government has already played a key part in debt cancellation, and has professed a desire to eradicate child poverty in Britain, but in developing nations debt reduction and measures to alleviate poverty are being undermined by the scourge of AIDS.
In Zambia alone one in five people are HIV positive. The country spends more on repaying the debts of rich creditor countries than on health. Specific government funding for HIV programmes will amount to $8 million this year, while overall health spending will be around $70 million. But when it comes to debt, the government will hand over a massive $176 million.
The escalating HIV/AIDS crisis is perhaps the greatest threat to efforts to tackle poverty. Twenty five million Africans are HIV positive. There is a more than 50 percent chance that an African child born today will die of an AIDS-related disease. The United Nations warns that by 2010 40 million children could be AIDS orphans. Those with AIDS-related diseases cannot work, leaving whole families with no means of income. Millions of children have been orphaned, driving older siblings to prostitution, and potential HIV infection, in a desperate effort to earn money.
War on Want went to the G8 summit in Genoa in July to lobby for radical action on debt alleviation and tackling the AIDS crisis. We were disappointed that the leaders of the most industrialised nations could only find £1.2 billion for a special fund to tackle AIDS. The week after the summit the United States Congress rejected calls to boost their $100 million contribution by $60 million, instead boosting military assistance to Israel by $60 million – to $2.04 billion.
Unless world leaders like the US and Britain prioritise debt alleviation and health promotion above military spending, we can expect poverty in the developing world to increase – cancelling out the admirable efforts of Gordon Brown and Clare Short. As the government tells us: a lot done, but a lot still to do.