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Al-Ahram Weekly 18 - 24 February 1999 Issue No. 417 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 18 - 24 February 1999 Issue No. 417
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Features Special Travel Living Sports People Time Out Chronicles Cartoons Letters The will of the South
By Dina EzzatIn the nine years since it was established, the G-15 has done little towards establishing inter-South economic cooperation and stability. It has achieved even less in terms of North-South dialogue, let alone equality. Today, aware that their credibility credit may be running out, member states say that they need to develop their own style of managing their relations with the North, as well as amongst themselves.
Rosario Green, foreign minister of Mexico, described this new approach as "searching for the mystique of the G-15". She added that it is absolutely essential if the group is to survive the coming challenges and have a say in the making of the world's future economic system.
It was against a backdrop of trans-Southern economic stagnation and political disturbances that the G-15 concluded its ninth summit in Jamaica last week. The final statements marked the intention to match their existing commitment to the free-market economy with an equal, if not stronger, commitment to seeking a more equitable share of the gains that are to be made from the ongoing process of "globalisation" (aka, liberalisation) -- a process that has so far been made to serve the interests of the North, almost exclusively. Moreover, the group, which has hitherto generally steered clear of politics per se, decided that it would henceforth give more time to the most persistent political issues affecting its member states.
"The G-15 is primarily a political forum. It should not be reduced to a mere technical body. We need to discuss the root and branch of the political issues that affect the countries of the group," argued Foreign Minister Amr Moussa, who headed Egypt's delegation to the summit on behalf of President Hosni Mubarak. For Moussa, it is not very realistic to attempt to deal with the economic problems of the Democratic Republic of the Congo, for example, without looking at the political problems which are currently slashing the rate of development, as well as creating enormous refugee problems.
The G-15 now boasts a total of 17 members -- Algeria, Argentina, Brazil, Chile, Egypt, India, Indonesia, Jamaica, Kenya, Malaysia, Mexico, Nigeria, Peru, Senegal, Sir Lanka and Zimbabwe. This year, they were apparently bound together by a broad consensus that they had been unjustly forced to bear the brunt of the world financial crisis -- a crisis which is still taking a serious toll on many member states, while threatening to move on and hit the others at any time. High levels of structural unemployment and widening income gaps within, and between, the developing countries, as well as the threat of protectionism emerging from the industrialised world, have all led to slower economic growth in many of the G-15 countries.
That said, nobody was talking about defecting from globalisation. "Globalisation is a fact and not a choice," admitted Foreign Minister Moussa. He added, however, that so far the world has chosen to deal with one side of the globalisation coin only, namely, the issues of open markets and cross-border investments. Scant attention has been paid to the other side of the coin -- that is, to "poverty, illiteracy, illness, underdevelopment, and suchlike problems -- problems which many of the countries of the South have to live with."
As Senegal's President Abdou Diouf pointed out, what matters most to Africa is the impact of economic liberalisation on the life of the peasants -- how it affects their ability to find enough money to manage their plantations and to sell their produce through small local markets. For Diouf, if globalisation is unable to address the needs of these people, then it has a long way to go before it even begins to cater for the interests of the South.
What the G-15 countries are looking for is an international economic and trade system under which they can fare better. They agree that this aim should be pursued without any unwarranted confrontation with the rich countries. "I don't think that any of us [who participated in these G-15 meetings] -- despite the bitterness felt by some with regards to the [recent unfortunate financial] developments -- is calling for a South-North collision. Rather, we are talking about a serious dialogue," Foreign Minister Moussa told the summit. And there is a lot of work for such a dialogue to do.
To begin with, the roles and performance of the international financial and trade organisations are in serious need of reconsideration. The G-15 would like to talk to the G-8 about the role of the International Monetary Fund (IMF) and the World Bank in responding to the liquidity needs of the developing countries that were hit by the Asian-Latin financial crisis. It is important to ensure that these organisations discharge their mandates adequately when it comes to providing much-needed support with redressing current account imbalances and financing long-term development. The World Trade Organisation (WTO) also needs to be reshaped, so as to allow the full integration of the Third World into the international trade system. "The WTO has a bad name in the developing countries, and the organisation needs to work on improving its image there," commented Foreign Minister Moussa.
Another item that might well figure on the agenda for South-North dialogue is the current coincidence of a deep slump in commodity prices, on which the Southern economies rely, and the protectionist measures taken by the industrialised countries to close their markets to exported goods from the South by insisting on certain specifications, quality criteria and environmental and labour standards.
The industrialised countries are currently exerting pressure on the developing countries to get them to give up their rights to the transitional periods stipulated under the WTO. The pretext they cite is that this is the best way to encourage a stronger inflow of foreign capital into the economies of the Third World countries.
Having just taken over as chair of the group, in advance of the Cairo summit to be held in the year 2000, Egypt will be conducting contacts with the members of the G-8 to arrange a meeting between representatives of the two groups.
But why should the North care to listen to the South? One answer to this question was given by Jamaican Prime Minister James Patterson: "It is the poor that still catches pneumonia, but the rich is subject to infection. This, as such, is a good reason."
Another answer to the same question came from Farid Khamis, secretary-general of the G-15 Federation of Chambers of Commerce and Industry. Khamis said that, despite the ongoing absence of any formula for North-South equality within the globalisation process, there is increasing international awareness that the developed countries should not be allowed to have everything. Not only that but, according to Khamis, the developed countries "have begun to understand that unless there is equality, they will not find anyone to buy their merchandise."
Still, what counts most for the developing world is its own togetherness. When all is said and done, the reform of institutions such as the IMF is still a very long shot. For many years to come, the Third World will have to play by the existing rules. "If we don't take the IMF prescription, it will try to frustrate our efforts," commented a delegate from one East Asian country. That is why, in the view of some summit participants, the South needs to create its own financial institutions to provide support in the case of economic collapse without imposing the high political prices stipulated by the IMF.
This kind of close cooperation, however, will depend to a great extent on the political will of the countries of the developing world, in general, and the member states of the G-15, in particular. So far, the arguments in favour have been advanced. One good test of how far these arguments are likely to carry the Third World will be a meeting scheduled to take place in India later this year. Then, the countries of the South will meet again to examine the worsening global financial crisis and coordinate a unified stance in advance of the Third Ministerial Meeting of the WTO scheduled to take place in November in the US. If their leaders fail in that mission, then the poor can kiss all their other grand plans to protect them good bye.
Additional reporting in Cairo by Niveen Wahish
