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Al-Ahram Weekly 22 - 28 June 2000 Issue No. 487 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 22 - 28 June 2000 Issue No. 487
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Focus Opinion Culture Features Travel Living Sports Profile People Time Out Chronicles Cartoons Letters A resilient spirit
By Ibrahim Nafie
The G-15 summit in Cairo came at a particularly crucial time in the development of the international economic environment. The countries of east and southeast Asia are still recuperating from the crisis that rocked their economies starting mid-1997. More generally, there is a growing tide of pressure to revamp world economic relations, placing them on a more equitable and democratic footing.
The G-15, whose membership recently rose from 17 to 19 with the addition of Iran and Columbia, represents some significant economic leverage. According to World Bank figures, the real GNP of the member nations combined stood at $2,700 billion in 1998, or 9.4 per cent of the global product for that year. Also that year, the export trade of G-15 countries totaled approximately $448.1 billion, or 8.2 per cent of world export trade, and their import trade totaled approximately $447.2 billion, or 8.5 per cent of world import trade.
This group's emergence in the climate of détente following the end of the Cold War has shaped its performance and outlook. From its inception, the G-15 has worked toward integration into the global economy, continually stressing the need for fair terms and the principle of interdependency in this process. Since the signing of GATT in 1994, which generated the formation of the WTO and subsequent agreements on the deregulation of financial and communications services, the G-15 finds itself faced with a complex and onerous task. The group recognises that integrating into the global economy is vital for development and progress, but it is equally dismayed at the hurdles that must be overcome on the road to building economies capable of competing in the world market.
Little wonder, therefore, that although the tenor of the final communiqué of the G-15 summit was generally positive, there was a clear note of frustration at the continued asymmetry. While summit participants recognise the importance of globalisation, they have come to realise that major changes must be introduced into the regulatory frameworks of the process so as to create fairer conditions for developing nations.
Yet it is not sufficient for us merely to voice our grievances. Rather, the task ahead of us requires a more practical and business-like attitude in our dealings with the WTO. If developing nations are to secure more advantageous terms for trade, easier access to international markets and better opportunities for the transfer of technology, we must work much more closely to formulate clear and specific positions and proposals on the issues we must negotiate with the advanced industrial nations.
Topping our agenda in this regard are the protectionist measures adopted by those nations to stymie developing nations' export trade. Non-tariff mechanisms, such as arbitrary recourse to anti-dumping regulations, deliberate procrastination in the deregulation of the textile and garment trades, general opposition to the deregulation of agricultural trade, not to mention such issues as environmental and labour standards that should not be subject to multi-party negotiations, are all used by the advanced industrial nations to hamper the competitivity of developing nations' exports on international markets.
Still, as we review the recommendations adopted by the G-15, we will see that, while we have much to expect from the advanced industrial nations, there is much that we ourselves must do.
The first principle stressed in the final communiqué of the G-15 summit was that globalisation must be conducive to the alleviation of poverty in developing nations. Toward this end, developing nations must work to reduce disparities in per capita income, enabling their citizens to integrate into the global economy on an equitable basis. The communiqué also reaffirmed the need for member nations to promote democratisation, the respect for human rights and environmental protection. Clearly, here, developing nations must take responsibility, but the advanced industrial nations certainly can help them in that respect.
A second major point in the final communiqué was that wealthy nations should increase their levels of official development aid to developing nations to 0.7 per cent of their GDP. This is an old demand, but one only very few nations have lived up to. These nations, moreover, are relatively small and their contributions, therefore, have been relatively minor. Although the wealthiest nations in the world were colonial nations, and therefore are historically and morally responsible for a significant portion of the economic, social and political problems suffered by developing nations, they have done little to redress past injustices.
The G-15 communiqué also appealed for a more just and democratic international economic order that would address the needs of developing nations. The statement called upon the advanced industrial countries to adopt measures that will alleviate the enormous debt burden encumbering developing nations and to promote more actively private capital investment in developing countries. Such measures are essential in order to reduce the marginalisation of developing nations during the process of trade deregulation, on the one hand, and to foster sustainable development, on the other. Direct investment from the advanced industrial nations to the developing world is a crucial factor in increased productivity, technology transfer and more effective integration into the world economy.
While these demands are perfectly just, the developing nations must work in concert to press for a more democratic world economic order. Together, we have the power to link provisions for the deregulation of international trade to our developmental concerns.
Third World nations, however, can also improve the performance of their economies to render them more attractive to foreign investment. In this regard, the final communiqué emphasised the need for governments to enhance the role of the private sector in economic development, but also to give greater support and encouragement to small enterprises.
It further urged G-15 members to promote technical and scientific collective self-reliance, a demand that, if it is to amount to more than an expression of good intentions, requires a range of specific measures to create effective and dynamic cooperation for the advancement of research and development and the exchange of technology and expertise. Not only will such cooperation help avoid the duplication of expenses, it should greatly improve our chances of closing the technological gap.
In sum, the G-15 summit demonstrated a spirit that was at once realistic, flexible and constructive. It remains for the G-15 members to follow through on their resolve through close coordination of their negotiating positions on the frameworks for the deregulation of trade and through the formulation of practical, carefully designed mechanisms for collective self-reliance.
