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Al-Ahram Weekly On-line 16 - 22 November 2000 Issue No.508 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly On-line 16 - 22 November 2000 Issue No.508
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Focus Travel Living Sports Profile People Time Out Chronicles Cartoons Letters Free trade trivia
By Faiza RadyThe North has always dictated the terms of international trade and the pace of globalisation. But Northern dictates have become sufficiently controversial to warrant a different kind of discourse. Signals to this effect surfaced this week at the Asia Pacific Economic Cooperation (APEC) summit in Brunei, a tiny -- but oil-rich -- enclave on the island of Borneo in Southeast Asia.
The brainchild of the United States, APEC was first established in 1989 as a loose 12-member forum to promote open markets and globalisation. Largely functioning as a catalyst to remove trade barriers in the region, membership to the organisation has now expanded to 21 nations. Besides including developing nations like Mexico, Indonesia, Malaysia, the Philippines, Thailand, Vietnam and South Korea, the organisation also includes economic heavyweights of the calibre of the US, Canada, Japan, Australia, Russia and China. Hence, APEC now steers a considerable chunk of the global economy, accounting for about 60 per cent of total production and almost half of the world's trade.
In a concerted effort to shield APEC dignitaries from the vociferous international anti-globalisation movement, the Brunei police force was put on high alert. Since last December's Seattle debacle -- when tens of thousands of anti-globalisation demonstrators took to the streets and contributed to closing down the World Trade Organisation (WTO) ministerial meeting -- countries hosting international trade conferences have taken extraordinary security measures to prevent a replay.
Sultan Hassan Al-Bolkiah, the absolute ruler of Brunei, found a simpler and less expensive solution to the problem. Short of deploying the tiny sultanate's entire police force in order to secure a protest-free haven for the summit, the Brunei authorities announced that they would prevent anti-globalisation activists from entering the country. Nevertheless, the situation remained tense on the streets of Brunei. Tensions were also palpable in the convention halls, where developed countries faced considerable resistance from a number of developing countries when they tried to schedule the next round of WTO negotiations for the year 2001.
Meanwhile, as Northern delegates continued to reiterate their familiar litany of across-the-board trade liberalisation and privatisation, they were careful to mitigate their approach. In an effort to avoid a Seattle-style backlash, rich APEC members attempted to sugarcoat the pill by revamping the organisation as socially-oriented and more interested in the poor than in big business. In a glossy and politically-correct summit publication, APEC publicised the launching of no less than 300 regional Ecotech projects benefiting the organisation's poorest member states. They include support for women's issues, education centres and cooperatives to help finance agricultural projects. "APEC is not really about committees, conventions or trade summits, it is about making a real difference to real people's lives," explained Thailand's Economic Affairs Department Director-General Kobsak Chutikul.
Glossing over the very problematic issues of unequal development between APEC-member countries as rich as Australia and as poor as Vietnam, Western delegates focused instead on the alleged common merits of free trade. "Our goals are very much the same, particularly in electronic commerce and digital development," said Jonathan Meyers of the US Commerce Department -- a not-too-subtle effort to skim over the divide between rich and poor nations. "It's something everyone in the region benefits from," explained Meyers, omitting to mention that in poor countries like the Philippines and Vietnam -- where 50 per cent of the people subsist on one dollar a day -- "everyone" is less likely to benefit from e-commerce and digital development.
APEC media, like the delegates, stressed the good news. In effect, analysts forecast increased regional growth of 4.3 per cent in 2000. However, critics contend that growth statistics tend to mask regional inequalities and unevenness within countries. A case in point is Vietnam. Considered one of the fastest growing economies until the Asian financial crisis took its toll in 1998, the country's economy still grows at an annual rate of four per cent. But macro-economic indicators are, as always, deceptive. Growth in Vietnam is, at best, uneven, and mostly limited to thriving urban centres like Hanoi and Ho Chi Minh City. Vast tracts of rural land that were heavily bombarded by the US with deadly defoliants are still virtual wastelands and half of the population lives below the poverty line.
Another example that comes to mind is the much-touted South Korean recovery story. Although inflation is low, and growth figures reached 12.8 per cent in the first quarter of 2000, a crisis is evidently in the making. The country's giant conglomerate, the Hyundai chaebol, is being liquidated. It owes a staggering $46 billion worth of debts. Daewoo, another manufacturing giant, collapsed last year. Still reeling from the 1998 crisis and from slumping world demand in the high-tech market, the manufacturing sector remains heavily indebted. The combined debt of the country's four biggest chaebols is estimated at $122.8 billion, down by only 15 per cent since 1998. Following financial insolvency and investor jitters in the wake of the Daewoo bankruptcy -- the largest bankruptcy case in corporate history -- the stock market has fallen by 30 per cent this year.
While it is true that unemployment has decreased in absolute terms, the figures are deceptive. A great proportion of jobs are part-time casual and day labour. There is evidence of a growing informalisation of labour, which means that the quality of employment has deteriorated. And labour "flexibility" legislation has destroyed millions of jobs in a country that has long prided itself on providing job security to its work force.
In the Philippines, the situation is also highly volatile. Impeachment proceedings have started against Filipino President Joseph Estrada, who is charged with taking pay-offs to the tune of $12 million from an illegal numbers racket. The political turmoil has shaken the country's economy and the stock market took a freefall, hitting its lowest point in two years. The peso collapsed against the US dollar, raising fears of another bout of devaluation fracturing the fragile post-crisis economies.
Given this context, it is not surprising that a number of Asian nations strongly opposed the spectre of a new dosage of deregulation to be negotiated at the next WTO round of talks. Although US trade representative Charlene Barshefsky was confident that opposition to an early round of WTO talks is lessening, a rejectionist front -- headed by Malaysia and South Korea -- denounced the US proposal in no uncertain terms. "There is no sign of a credible [WTO] agenda taking concerns of developing countries into account," said Malaysian trade and industry minister, Rafidah Aziz. "I seriously doubt a new round will be mooted after Brunei."
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