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Al-Ahram Weekly 4 -10 February 1999 Issue No. 415 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 4 -10 February 1999 Issue No. 415
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Book Fair Economy Opinion Culture Features Living Travel Sports People Time Out Chronicles Cartoons Letters Putting out the fire
By Gamil IbrahimAs the world readied to usher in a new millennium, 1,000 business tycoons and 250 political leaders gathered at the exclusive Swiss ski resort of Davos. They agreed that the process of globalisation needs to be "humanised" so that its benefits may be more equitably distributed. Although participants in the World Economic Forum (WEF) from both the North and South felt that globalisation is a process riddled with pitfalls, suggestions on how to improve the world economic order showed that participants are still worlds apart.
Delegates, however, did agree to relaunch the WEF-sponsored Middle East/North Africa (MENA) conferences for regional economic cooperation, and to hold the next one in Bethlehem in 2000. WEF President Klaus Schwab made the announcement on Tuesday following a speech by Palestinian President Yasser Arafat.
Last April, the WEF suspended the annual conferences, designed to build up economic ties between Arabs and Israelis. The regional conferences were scrapped because of the Israeli government's hard-line policies; several Arab states boycotted the 1997 Doha meeting in protest.
In Davos, politicians, chief executives of leading corporations, experts and intellectuals held brainstorming sessions marked by heated debates in which a riot of contradictory and controversial opinions were expressed. While acknowledging the advantages of an open global system, Southern leaders resisted attempts by the North to force emerging markets to pick up the tab for economic globalisation.
IMF deputy managing director Stanley Fischer lashed out against critics of his organisation's record on social issues, describing criticism as "nonsense -- an outrage and an offense".
The need for a "new global financial architecture" was also a buzzword at Davos, where participants sought to understand the financial meltdown which began in Asia in 1997 and spread to Latin America and Russia in 1998. Delegates agreed that measures should be taken to prevent a repetition of this financial crisis, but little progress was made on what should be done.
A report on the Asian financial crisis noted that the crisis "reflects the rapid arrival of global capitalism, in a world economy not yet used to the integration of advanced and developing countries".
In an address last Sunday, President Hosni Mubarak said that the industrial world must take action to ensure that the world's poorest countries are no longer the principal victims of a globalised economy. "Our global village has caught fire," said Mubarak, and the poorest have paid the highest price for the economic crisis. "We have put out most of it, but there are still pockets that can threaten us all again," he added, referring to the recent Brazilian debacle.
Mubarak argued that, although crisis-hit emerging markets were blamed for not having sound economic systems and taking in too much short-term capital, the industrialised countries were also to blame for lending them the money. "Inappropriate policies in industrial countries can lead and have led to major distortions in the allocation of resources... it takes both a creditor and a debtor to make an unsound loan," he added.
Indian Finance Minister Yashwant Sinha agreed: "Unless globalisation is also influenced by the concepts of equity, equality and compassion, globalisation will... remain for many a 13-letter dirty word," he said.
Asian leaders, whose countries have borne the heaviest financial blows, made the case for their attempts to remedy the crisis, but maintained that the road to recovery will not restore pre-crisis growth levels.
Hong Kong Chief Executive Tung Chee Hwa cautioned, however, that world leaders should not fail to support Asia's recoveryx. "If the lights go out in Asia, the impact on the global economy will be really unimaginable," Tung said.
Latin American leaders, who last year assured participants in Davos that the 1997 Asian currency devaluations would not have a domino effect on their countries, adopted a different strategy this year. Against the backdrop of Brazil's currency crisis, they spent their time talking about how different their countries are from each other.
Russia, too, defended its poor performance. Premier Yevgeny Primakov said it would probably take "more than a year" to overcome the difficulties his country is facing, but insisted that "these dire economic straits are a temporary phenomenon."
UN Secretary-General Kofi Annan said key UN agencies would assist businesses in ensuring respect for labour standards, human rights and environmentally sound practices. Annan proposed "a global compact of shared values and principles which will give a human face to the global market".
The forum opened on a somewhat turbulent note, with sub-zero temperatures compounded by massive snow storms, but bad weather was not the only force working against the Davos gathering. Demonstrators protesting the "globalisation" of big business picketed the site. "The WTO (World Trade Organisation) kills people, kill the WTO," read one of the banners.
Inside the forum, voices of dissent were also raised. Most prominently, South African President Nelson Mandela blasted a world economic system which amplifies inequalities. "Is globalisation only to benefit the powerful and the financiers, speculators, investors and traders?" he asked. "Does it offer nothing to men, women and children who are ravaged by the violence of poverty?"
