Economic Imperative: Part 1

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Economic Imperative

 

 

Date: Mon, 24 Mar 1997
From: David T. Brown
Subject: Echoes and resources

 

Down One

    Greetings, all.

    As a conspicuously quiet passive participant in Ann's dialogue, I'm abit reluctant to jump in at this point and offer nothing more substantivethan an endorsement of the views of my colleague, John Middleton. But Iwill do so anyway, and promise to make a valiant effort at a more meaningfulcontribution in the (hopefully near) future.

    I share John's concerns about the profound gap between SD perspectivesand the direction of current international trade agreements. I have spentthe last several weeks in the closest thing to a tirade that I have everembarked upon in the classroom, venting about the absurdities, threats,and inconsistencies in the agenda of economic globalization. I will sendyou all two documents that provide some background info: one is the transcriptof a talk by David Korten, author of "When Corporations Rule the World",and the other is a paper given by Tony Clark at a conference on participatorydevelopment in Calgary. These documents, while hardly news to most who havebeen monitoring these developments, are nonetheless good populist synopsesof the major concerns (dangers of stereotyping notwithstanding). I willsend them for your consideration, as plain-text e-mail messages. Tony Clarkgave me verbal permission to share his paper amongst students and colleagues,and Korten's talk is available freely on the internet as a RealAudio presentation,so I don't feel particularly abusive of intellectual property rights inthis context.

    However, I'm less concerned than John about dangers of reinventing thewheel... I think that most of the ongoing discussion in the dialogue hasbeen useful and illuminating. Perhaps, though, we might all make a pointof sharing pertinent reference citations if the discussion strays into anarea that has already had an authoritative literature treatment, so as tonot spend inordinate amounts of time re-plowing already cultivated fields.

    Ann, the daffodils are sprouting outside my office window, and the red-wingedblackbirds are making suggestive comments to one another all over the place.Could the late-winter depression finally be evaporating? It's only a matterof a few weeks difference between spring in Niagara and spring in the OttawaValley, so please take heart! I predict that once a dose of spring sunshinehits our pineal glands and the academic term winds to a close, we'll allbe leaping in to the fray with fresh perspectives...

    More later, I hope.

    Cheers,

    Dave


     

    Date: Mon, 24 Mar 1997
    From: David T. Brown
    Subject: Korten address

       

      Up One

      Down One

      THE FAILED PARADIGM OF GLOBALIZATION

      Transcript of an address by David Korten, at a public teach-inon The Social, Ecological, and Political Costs of Economic Globalization,New York City, November 10th-12th, 1995

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      Presented by Virtual Radio Network, PeaceNet, and the InternationalForum on Globalization

      http://www.peacenet.org/Teach-In/

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      World Bank economist John Page recently told a meeting of middle easternofficials that the global economy is like the bullet train from Osaka toTokyo - if you miss it , it's gone, and there is no way to catch up, sohe urged them to get aboard quickly by restructuring their economies.

      Harvard Business School professor Rosabeth Kanter, in a recent book "WorldClass", tells us that the future belongs to those who are willing togive up our loyalty to community and nation, and to seek personal financialsuccess in a global economy. She warns that those who remain loyal to peopleand places will be left behind.

      Business Week tells us of East Asia, where the number of non-Japanesemulti-millionaires is expected to double from 400,000 in 1993 to 800,000in 1996, is the leading example of what a global free market economy hasmade possible. Quote: "There are new markets for everything, from MercedesBenz cars to Motorola mobile phones, to Fidelity mutual funds. To find thenearest precedent, you need to rewind U.S. history 100 years, to the daysbefore strong unions, securities watchdogs, and anti-trust laws" -unquote. Scant mention is made of the fact that free market economies havealso left 675 million Asians living in absolute deprivation. We have organizedthis teach-in because we believe that there is something fundamentally wrongwith an economic model that calls on us to give up all loyalty to placeand community, and says we must give free rein to securities fraud and corporatemonopolies, and deny workers the right to organize, and tells the poor torun faster and faster after a train they have no chance of catching, sothat a few hundred thousand people can become multi-millionaires by destroyingnature and depriving others of a decent means of livelihood.

      Millions of people around the world are no longer buying this monumentalfraud against humanity, and their numbers are growing. We are here to celebratetheir awakening - our awakening - from the myths and illusions of an industrialera that is now in its death throes. These myths are so imbedded in westernindustrial culture that most of us grew up accepting them as self-evidenttruths.

      The myth that growth and GNP is a valid measure of human well-being and progress.

      The myth that free unregulated markets efficiently allocate a society's resources.

      The myth that growth in trade benefits ordinary people.

      The myth that economic globalization is inevitable.

      The myth that global corporations are benevolent institutions, that if freed from governmental interference, will provide us with clean environment and good jobs for the poor.

      The myth that inflows of foreign money are a path to local prosperity.

      Take growth for an example. To begin with, our measures of growth aredeeply flawed. They are purely measures of activity in the monetized economy.

      If I were to divorce my dearly beloved wife of 33 years, it would begood for the national economy. It would generate lawyers' fees. I wouldhave to buy a new house, which would generate realtors' fees. And I'd haveto outfit it - go out and buy a whole pile of things.

      If a young parent stays home and takes care of his or her child, it contributesnothing to the economy. But if that same parent hires a baby sitter so thathe or she can take a job caring for other peoples' children, that countsas an economic contribution.

      The growth myth has another serious flaw. Since 1950, the world's economicoutput has increased five to seven times. That growth has already increasedthe human burden on the planet's regenerative systems - its soils, the air,the water, the fisheries, and the forestry systems - beyond what the planetcan sustain.

      Continuing to press for economic growth beyond the planet's sustainablelimits does two things. It accelerates the rate of breakdown of the earth'sregenerative systems, as we see so dramatically demonstrated in the caseof many of our ocean fisheries, and it intensifies the competition betweenrich and poor for the resource base that remains. The disparities in thiscompetition have become truly obscene. Just consider that those 358 billionairesmentioned by John and Maude could easily sit in a corner of this church,and yet they control assets roughly equal to those of the poorest half ofthe world's population. And the proponents of globalization have the nerveto tell us they simply want to create a level competitive playing field.

      In case after case, we find that development projects, many funded byloans from the World Bank and other multilateral development banks, aredisplacing the poor, so that the lands and the waters on which they dependfor their livelihoods, can be converted to uses which generate higher economicreturns. What does that mean? It means converting them to use by peoplewho can pay more than those who are displaced. Many of us are beginningto realize that what growth and GNP really measures is the rate at whichthe economically powerful are expropriating the resources of the economicallyweak in order to convert them into the garbage of the rich.

      Take the myth of free unregulated markets. It is almost inherent in thenature of markets that their efficient function depends upon the presenceof a strong government, to set a framework of rules for their operation.We know, for example, that free markets create monopolies, which governmentsmust break up in order to maintain the conditions of competition under whichmarket function depends. We also know that markets only allocate efficientlywhen prices reflect the true and full costs of production.

      Yet in the absence of governmental regulation, market incentives persistentlypush firms to cut corners on safety, to pay workers less than a living wage,and to dump untreated toxic discharges into a convenient river.

      Take the example of the Benguet Mining Company in the Philippines, ina case documented by Robin Broad and John Cavanagh (1993). In their questfor gold, the company cut deep gashes into the mountains, stripped awaytrees and topsoil, and dumped enormous piles of rock and soil into localrivers. With their soils and water sources depleted, the indigenous peopleof the area can no longer grow rice and bananas, and they have to go tothe other side of the mountain for drinking water and to bathe. The cyanideused by the Benguet corporation to separate the gold from the rock poisonsthe local streams, kills the cattle that drink from the streams , and reducesrice yields of the people in the lowlands below who use the water for irrigation.When the tailings and the cyanide empty into the oceans, they kill the coralreefs and destroy the fishing, up[on which thousands of other coastal peopledepend. The company reaps handsome prfits. The local people bear the costs.Economists applaud the company's contribution to national output and exportearnings, and the winners in the global economy are able to buy their goldtrinkets at a more attractive price.

      The one thing at which a free unregulated economy is truly efficientis in transferring wealth from the many to the few. Take the myth of freetrade. Many so-called free trade agreements such as NAFTA and GATT are notreally trade agreements at all - they are economic integration agreements,intended to guarantee the rights of global corporations to move both goodsand investments wherever they wish, free from public interference and accountability.GATT is best described as a bill of rights for global corporations.

      Take the myth that economic globalization is inevitable. Many of thepeople who claim globalization is a consequence of inevitable historicalforces are themselves on the payrolls of the global corporations that arespending millions of dollars advancing the globalization policy agenda bybuying our politicians.

      Economic globalization is inevitable only so long as we allow the world'slargest corporations to buy our politicians and write our laws. It is timeto end corporate rule.

      Take the myth that corporations are benevolent institutions. The corporationis an institutional invention specifically and intentionally created toconcentrate control over economic resources while shielding those who holdthe resulting power from liability for the consequences for the use of thatpower. The more national economies become integrated into a seamless globaleconomy, the further corporate power extends beyond the reach of any state,and the less accountable it becomes to any human interest or institutionsother than a global financial system that is now best described as a giganticglobal gambling casino.

      Take the myth that foreign investment creates local prosperity. Foreigninvestment is attracted by the perceived opportunities to turn a quick profit,not to benefit some needy community. Though they do have real-world consequences,most of what we call international capital flows are little more than movementsof electronic money from one computer account to another in a high-stakespoker game.

      From 1990 to 1994, Mexico became touted as an economic miracle, attractingsome 70 billion dollars in foreign investment with high interest bonds anda superheated stock market which of course just keeps pyramiding as themoney flows in. Financial experts estimate that as little as 10 per centof this foreign money went into anything that might resemble a real investmentin the production of goods and services. Most of it financed consumer importsand debt service payments, or ended up in the private foreign bank accountsof wealthy Mexicans, including the accounts of the 24 Mexican billionairesthat these financial inflows helped to create.

      The bubble burst in December of 1994. The hot money flowed out even fasterthan it flowed in. The Mexican stock market and the value of the peso plummeted.Mexican austerity measures and a sharp drop in US exports to Mexico resultedin massive job losses in both countries.

      Most foreign investment seeks to extract local wealth, not create it.Economic globalization extends the opportunities for corporations to goabout their business of concentrating wealth, and from the corporate perspectiveit has been a brilliant success. The Fortune 500 companies shed 4.4 millionjobs between 1980 and 1993. During that same period they increased theirsales by 1.4 times, their assets by 2.3 times, and CEO compensation by 6.1times. The average CEO of a large corporation of more than 3.5 million dollarsa year. These same corporations now employ 1/20th of one percent of theworld's population, but they control some 25% of economic output and 70%of world trade. And the consolidation continues. Worldwide, the value ofcorporate mergers and acquisitions which we anticipate will be completedin 1995 is expected to exceed the total of any previous year by 25%.

      Our development models and their underlying myths are artifacts of ideas,values, and institutions of the industrial era. Modern corporations havebeen the cornerstones of that era, concentrating the massive economic resourcesin a small number of centrally controlled institutions. They have broughtthe full power of capital intensive technologies to bear in exploiting theworld's natural and human resources, so that a small minority of the world'speople could consume far more than their rightful share of the world's realwealth.

      Now as we push the exploitation of the earth's social and environmentalsystems beyond their limits of tolerance, we face the reality that the industrialera is exhausting itself, because it is exhausting the human and naturalresource base on which our very lives depend. We must hasten its passing,while assisting in the birth of a new civilization based upon life-affirming,rather than money-affirming values.

      Countless citizen initiatives all over the world are creating the buildingblocks of the new civilization. Powerful formative ideas are emerging fromthese efforts. For example: the idea that economies should be local, rootingpower in the people of the communities who realize that their well-beingdepends upon the health and vitality of their local ecosystems. It is ourconsciousness, our ways of thinking, and our sense of membership in a largercommunity that should be global. Perhaps the most important discovery ofall is that life is about living, not consuming.

      A life of material sufficiency can be filled with social, cultural, spiritual,and intellectual abundance which place no burden on the planet .

      It is time to assume responsibility for creating a new human future ofjust and sustainable societies, freed from the myths that greed, competition,and mindless consumption are the paths to individual and collective fulfillment.We are here to embrace that responsibility, and to build citizen agendasfor change.

       

      David Korten
      People-Centered Development Forum
      14 E. 17th Street, Suite 5, New York, NY 10003
      (T) 212.620.7137 (F) 212.242.1901

       


       

      Date: Mon, 24 Mar 1997
      From: David T. Brown
      Subject: Tony Clark paper

         

        Up One

        Down One

        GLOBAL NORTH - GLOBAL SOUTH

        Rebuilding Sustainable Communities in Response to the DeepeningCrisis of Poverty, Social Disintegration and Environmental Deteriorationin a new age of Global Corporate Rule.

        (Keynote Address to 1996 International Summer Institute,

        University of Calgary, by Tony Clarke, Polaris Institute,Ottawa, Canada).

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        I want to begin by thanking Dr Mathew Zachariah and the organizers ofthe International Summer Institute here at the University of Calgary forinviting me to be this year's opening speaker. I gather that this is thesecond year of the Summer Institute. One of the things that I find intriguingabout this event is the mix of people. Not only do we have partners fromdiverse countries --- the Philippines, Bangladesh, Bhutan, Egypt, India,Nepal, Nicaragua, Peru, South Africa and the Gaza --- but also diverse experiencesand skills --- policy makers, practitioners in participatory developmentand academics.

        As you know, our theme for this year's Institute is "ParticipatoryApproaches in the Struggle to Build or Re-Build Sustainable Communities".I hope you will agree with me when I say that we cannot explore this themein a vacuum. We cannot talk about "participatory development"or "building sustainable communities" without addressing, at thesame time, the new realities of economic globalization which are radicallyshaping and re-shaping the world we live in today. Whether we like it ornot, we must come to grips with the fact that we are now living in a newworld order in the twilight years of the 20th century.

        In this New World Order, for example, it is no longer possible to makefacile distinctions between North and South as geographical regions. Wecannot, in other words, simply talk about 'the rich North' and 'the poorSouth.' The processes of economic globalization have begun to homogenizethese realities. Today, it is more accurate to talk about a "GlobalNorth" and a Global South". From the sweatshops in New York Cityto the homeless on the streets of Toronto, it is clear that the 'rich North'has its own 'poor South. " By the same token, he new class of billionairesin Mexico and the finance capital that is tunnelled on a daily basis intothe New Industrialized Countries of Southeast Asia signify that the 'poorSouth' also has its own 'rich North'.

        In the midst of these emerging contradictions, it is intriguing to watchthe responses of the architects and managers of the globalization process.At the World Economic Forum in Davos, Switzerland earlier this year ---where over 1000 chief executive officers (CEO's) of the top transnationalcorporations met with over 250 political leaders and senior government bureaucratsfor a week of discussions on the progress being made towards economic globalization--- ominous warning signs were issued about some of the built in flaws ofglobalization, its rapid pace of expansion and the mounting prospects ofa popular backlash that need to be taken seriously. In effect, even theeconomic and political elites who are designing and managing this New WorldOrder are showing signs of worry about the future.

        This is the context in which I would like to speak about the challengesof participatory development. For, as I see it, the task of building orre-building sustainable communities today requires some strategic analysisabout what is going on in the process of economic globalization. Here, Iwould like to focus our attention on three interrelated factors of globalization:(1) The Crisis --- the global realities of increasing economic poverty,social disintegration and environmental deterioration; (2) The Forces ---the expanding power and rule of transnational corporations over that ofnation states and democratically elected governments; and (3) The Response--- the gradual resurgence of countervailing popular movements demandingdemocratic control over their economic, social and ecological future.

         

        The Crisis

        For the most part, we all know something about the economic, social andecological crisis that continues to unfold around the world. In each ofour own countries, we constantly see signs of increasing poverty, socialdisintegration and environmental deterioration. From the standpoint of participatorydevelopment, we realize that these trends must be challenged and overcomeif we are going to pursue our task of building sustainable communities.To do so, however, we need to come to grips with the realities of this crisisin the context of globalization.

        First, let's look at the crisis of economic poverty. Whichever way youcut it, the income gap between rich and poor, North and South, is accelerating.As Robin Broad and John Cavanagh outline in a recent article in ForeignPolicy, thirty years ago, the income of the richest fifth of the world'spopulation combined was 30 times greater than that of the poorest fifth.Today, the income gap is more than 60 times greater.

        During the same period, the income of the richest 20 per cent grew from70 to 85% of total world income, while the share held by the poorest 20per cent dropped from 2.3 to 1.4%. Between 1987 and 1994, the number ofbillionaires in the world more than doubled, from 145 to 358. Collectively,these 358 billionaires are reported to be worth a total of 762 billion dollarswhich, in turn, represents the combined income of the world's poorest 2.5billion people or, in other words, 45% of the world's population.

        At the same time, this global crisis of income inequalities is furtherintensified by jobless economic growth. Worldwide, well over 800 millionpeople are either unemployed or seriously underemployed, with tens of millionsmore entering the job market each year. Driven by pressures to adopt newjob saving technologies and adapt to cost cutting competitiveness, corporationsand governments have been slashing jobs all over the world. The so-calledFortune 500 corporations, for example, have cut approximately 400,000 jobsa year for the past 15 years. In the North, millions of workers have sufferedjob losses as manufacturing companies, utilizing new communications andtransportation technologies, shift their production offshore to low wagecountries. In the South, millions of peasants are displaced by corporatefarming and bio-tech agriculture. And, everywhere, global corporations areplaying workers off against each other in order to bargain down both wagesand benefits.

        To be sure, a select group of countries in the South have been targetedfor increased investment and job creation. These are the so-called emergingmarkets of Mexico, China, Malaysia, Argentina, Thailand, Brazil, Indonesia,Venezuela, South Korea, and Turkey. In 1991-92, more than 70% of investmentflows from North to South went to these ten countries alone. For the 140poorest countries of the South, this has meant decreasing access to globalinvestment. Moreover, roughly half of the new foreign direct investmentin the 10 emerging market economies quickly left those countries in 1992in the form of profits to the parent corporations. And, to make mattersworse, the continuing debt crisis has accelerated the drain of financialresources from South to North. Between 1985 and 1992, Southern countriespaid some 280 billion dollars more in debt service to Northern creditorsthan they received through new private loans and government aid.

        Second, let's look at the corresponding problem of social disintegration.For the South, the so called structural adjustment programs (SAPS) imposedby Northern creditors in response to the debt crisis has resulted in a greatdeal of social disintegration. Over the past 15 years or so, the World Bankand the International Monetary Fund has demanded that governments in Southerncountries reduce their debt burdens by implementing massive cutbacks insocial spending (as a major part of their structural adjustment programs).This meant deep cuts in social programs for health, education and housingas well as the elimination of food and agricultural subsidies and massivelayoffs in the public service. In effect, the social safety net in thesecountries, however limited, has been shredded under these measures. Thisis the medicine, Bank and IMF officials argue, that the countries of theSouth must take in order to become free market economies and be in a positionto compete for foreign investment in the new global economy.

        In the North, social disintegration and structural adjustment analogueshas come in a slightly different form. Comprehensive free trade agreements(like the FTA and NAFTA) combined with deficit slashing campaigns have beenthe main vehicles for structural adjustment through reductions and changesin social programs. As we have experienced here in Canada under both theFTA and NAFTA, there are now built-in pressures to harmonize our socialprograms (eg. unemployment insurance, social assistance, health care andpublic education) with those of our free trade partners in the U.S. andMexico (which generally means moving from higher to lower social standards).At the same time, massive cuts in social spending have been adopted as themain recipe for eliminating government deficits. A prime example is therecent Canada Health and Social Transfer Act which is designed to slasha whopping 38% in federal transfer payments to the provinces over the nextthree years for health care, social assistance and post-secondary education.

        In both the South and the North, the hardest hit by these SAPs are, ofcourse, the poor. They are the segment of the population called to makethe real sacrifices here in terms of social disintegration. In particular,it is women and children who are made to suffer most from reduction andre-orientation of social programs. After all, it is women who are most oftenrelegated to part-time, insecure forms of employment and voluntary workin most societies and therefore rely a great deal on government programsfor social assistance and health care. And, when these social programs arecut back or eliminated altogether, the burden of responsibility for careof the elderly, the sick and the young tends to fall on women.

        Third, let's take a look at the related problems of environmental deterioration.Whether we are from the North or the South, the environment is increasinglyunder assault. Take the issue of depleting fish stocks. Large fishing corporationsnow make use of five times the technology to plumb the depths of the world'soceans than would be necessary to fish and maintain peoples' food needson a sustainable basis. As a result, the collapse of fish stocks from Newfoundlandand British Columbia to Namibia and the South Pacific, threatening the livelihoodof millions in the process. The same could said about the technologies beingused by giant timber corporations and the threat to the future of the world'sforest reserves.

        The fact is, in a deregulated global economy, governments in both theSouth and the North are required to lower environmental standards and toincrease exports of natural resources. In order to attract foreign investment,governments are more and more compelled to either lower their environmentalstandards or relax their environmental enforcement measures. In diverseways, this is happening in Northern countries like Canada and the U.S. aswell as in Chile and Mexico. Moreover, the World Bank and the IMF have putenormous pressure on certain countries in the South, through their structuraladjustment programs, to accelerate the export of their vast reservoirs ofminerals, timber, fish and other natural resources to the North. This constantpressure to export more and more natural resources not only threatens theecological balance in the South but destroys the livelihood of millionsand diminishes the long term wealth of these countries.

        Yet, as Southern activists correctly remind us, the vast majority ofthe world's consumption, greenhouse gas emissions, ozone depleting chemicalemissions and pollution are caused by the industrial North. While the burdenof global environmental responsibility clearly rests with the North, thereare also emerging signs that ecological disasters in the South. China, forexample, is presently consuming more than a billion tons of coal annually,thereby producing 11 per cent of the world's carbon dioxide emissions. Ifthis trend continues to increase, the impacts on global warming could bedisastrous. At the same time, Indonesia is rapidly becoming the world'slargest exporter of wood products by tearing down the world's second largesttropical rain forest. And, given current rates of production, Chile's vastforest reserves will be wiped out in 20 years.

        In short, these are some of the main elements of the continuing economic,social and ecological crisis generated by the processes of globalization.Now, what does this have to say about strategizing for participatory development?Well, for one thing, it is clear that the model of globalization is seriouslyflawed. Instead of solving the world's major economic, social and ecologicalproblems, it is intensifying them. What's more, this model of globalizationis creating a great deal of insecurity among peoples, both North and South,about their future. 1, for one, believe that this predominant feeling ofinsecurity about the future is an important strategic starting point forparticipatory development. This, we will recall, was one of the troublesometrends on the minds of the global elites and managers who met earlier thisyear at the World Economic Forum. But, if we are going to assist peoplein building (or re-building) sustainable communities in an age of globalization,then we need to enable them to overcome this sense of insecurity in orderto take control over their economic, social and ecological future.

         

        The Forces

        To move in this direction, we need to take a closer look at the majorforces of globalization that are shaping this new world order. All to often,there is a tendency to blame our governments for playing the game of globalizationor blame the United States for being the dominant power and force that isdriving the process of globalization. While there is certainly a great dealof truth to these charges, we still run the risk of misplacing our blame.For, in many cases, it is no longer governments per se nor even powerfulnation states that are calling the shots. The real forces that are drivingthe process of globalization are transnational corporations. It is the transnationalcorporation that embodies the twin engines of globalization --- namely,the international movement of capital and the computerization of technology.It is the modem corporation, more so than any other institution, that iscontrolling our economic, social and ecological future.

        This is the central message which David Korten conveys in his recentbook, When Corporations Rule the World. Over the past decade alone, thenumber of transnational corporations has mushroomed from 7,000 to over 40,000.Of the 100 top economies in the entire world today, 50 are individual transnationalenterprises. Ford Motor's economy is larger than either Norway's or SaudiArabia's, while Philip Morris' annual sales are greater than New Zealand'sGDP. The 500 largest corporations employ only 1/20th of I per cent of theworld's workers, yet they control 25% of global output and 70% of worldtrade. And, 5 of these transnationals alone control 50% of the global marketin 7 industries (consumer durables, automotive, airline, aerospace, electroniccomponents, electrical & electronic, and steel).

        The economic power wielded by transnational corporations today also hasprofound political consequences. In most of the industrialized regions ofthe North, the CEO's of the largest corporations have formed business coalitionsfor the expressed purpose of realigning the national policies of their governmentswith the directives of the new global economy. In the United States, forexample, the Business Round Table which includes the heads of 42 of the50 top corporations in the world (including 7 of the 8 top commercial banks,7 of the 10 largest insurance companies, 5 of the 7 largest retail chains,7 of the 8 largest transportation companies, and 9 of the 11 top utilitycompanies) has been the driving force behind a wave of new public policydirections ranging from NAFTA to the Contract with America.

        In Europe, the mainline coalition of big business is the European RoundTable of Industrialists while in Japan it is called the Keidanren. Here,in Canada, we have the Business Council on National Issues which, comprisingthe CEO's of the 160 largest corporations in this country, virtually operatesas a shadow cabinet in Ottawa. Over the past 15 years or so, these big businesscoalitions have waged relentless campaigns around deregulation, privatization,free trade and debt elimination along with a variety of more specific economicand social policy changes. Armed with a network of policy research institutesand public relations firms, they are able to marshal expert analysis, developpolicy platforms, conduct opinion polls and organize citizen front groupsto change the direction of government policies. Needless to say, their successrate has been nothing short of phenomenal.

        As a result, nation states have surrendered most of the powers and toolsthey once possessed to regulate the operations of transnational corporationsto serve the economic, social and environmental needs of their own peoples.Around the world, governments have been deregulating their economies ata furious pace. Between 1991 and 1994, as many as 3 69 out of a total of374 major pieces of legislation introduced by national governments regardinginvestment by corporations, were designed to eliminate regulations on corporatepractices. Under the new free trade regimes like NAFTA, foreign investorsnot only have the same rights and freedoms as domestic firms, but nationalgovernments are also compelled to remove foreign investment requirements,export quotas, local procurement, job content and technology specifications.

        In effect, these and related measures have led to a radical re-inventionof the roles and responsibilities of governments in a democratic society.(I realize here that we have all had varying experiences with the role ofthe state in our respective countries, including corrupt and militaristicversions, but I am primarily speaking here about what is happening to socalled democratic governments). Intervention by governments in the market,where necessary, to regulate the operations of corporations on behalf ofthe public interest or the common good, has become a thing of the past.Indeed, governments are getting out of the business (insofar as they wereever committed) of ensuring that the basic life needs of their peoples ---food, clothing, shelter, education, employment, health care, clean environmentetc. --- are met through the provision of social programs and public services.Instead, the prime role and responsibility of governments now is to servethe interests of transnational corporations by securing a favourable climatefor profitable transnational investment and competition. In other words,'democratic governance' (imperfect though it has been) is now being supplantedby a form of corporate governance.'

        These trends, in turn, are further re-enforced by new forms of governanceat a global level. The recently established World Trade Organization (WTO)is designed, for all intents and purposes, to act as a global governingbody for transnational corporate interests. The WTO is equipped with legislativeas well as judicial powers. It has a mandate to eliminate all barriers tointernational investment and trade. Under the WTO, a group of unelectedtrade representatives will, in effect, act like a global parliament withthe power to override the economic and social and environmental policy decisionsof national states and democratic legislatures around the world which failto comply with the new rules for international investment and competition.Given their established linkages with the trade representatives of membercountries and the role played by big business coalitions, the world's majorcorporations are ensured of a pivotal and powerful presence in the new WTO.

        In short, what we are experiencing here in the twilight years of the20th century is a massive shift in power --- out of the hands of nationstates and democratically elected legislatures and into the hands of transnationalcorporations. Indeed, we are rapidly moving into a new political era inwhich the destiny of peoples on this planet, North as well as South, isincreasingly determined by transnational corporations who have little orno public accountability. This is what some of us are calling the new ageof corporate rule. It is a period in which the political rights of citizensare superseded by the political rights of transnational corporations ---to property and investment, to mobility of capital and technology, to controlover life forms (patents). In this new world order, the security of investorstakes precedence over the security of citizens. For countries like India,this means that foreign security forces are now training local police toprotect "the life and property of foreign investors."

        To say the least, these are disturbing trends for those of us who aredeeply committed to participatory development. For the ways in which corporatepower has come to dominate public policy making constitutes a fundamentalviolation of democracy. Corporations, after all, are designed to maximizeprofits and growth, not serve the basic development needs of people andcommunities. Nor are they, for the most part, publicly accountable for theiroperations. As long as these systems of corporate rule are in place, ourchances of making real progress in the field of participatory developmentare seriously jeopardized.

        The Response

        The architects of globalization have also been waging a relentless campaignto ensure that nations and peoples throughout the world are fully incorporatedinto the global market. A variety of methods have been used by economicand political elites to persuade and coerce people to adjust, adapt, andaccommodate to the market oriented vision, values, and principles of thenew global economy. While the forces of history seem to be puffing the majorityof nation states in this direction, the accommodation is by no means uniform.Around the world today, people are beginning to see that the neo-liberalmodel of globalization is no panacea for the problems facing the futureof humanity and the earth itself. There is a growing feeling that this modelthreatens rather than ensures economic, social and environmental securityin the future. Indeed, this is why the global managers assembled at theWorld Economic Forum earlier this year expressed their worries about a socialbacklash against their globalization agenda.

        Yet, one of the most effective weapons (if I may use this term) in thearsenal of the global managers is TINA --- There Is No Alternative. Whilemany people in our own countries may well question and even resist globalizationand corporate domination, they also tend to accommodate in the end becausethey have been made to believe that there really is no alternative. Butwhat the TINA syndrome signifies is nothing less than totalitarianism. Afterall, public discussion and debate about alternative points of view, is oneof the hallmarks of a democratic society. To insist that there is no alternativeto the corporate model of globalization is sheer intellectual terrorism.As advocates of participatory development, we know that there are viablealternatives. Indeed, one of the most hopeful options for the future isthe building (or rebuilding) of sustainable communities. The task of developingcommunities that are equitable, sustainable and participatory poses a directalternative challenge to the corporate model of development that dominatesour way of life today. During the course of this week, you will be presentingand discussing case studies of community based projects for sustainabledevelopment, including waste management, community housing, renewable energy,community health care, land banks and ecotourism. In each case, we are boundto see an emphasis on such principles as local self-reliance, communitycontrol and bio-diversity. Given the fact that these initiatives are comingfrom all over the world, is also indicative of an alternative model, namely,globalization from below. This is what feminist-economist Vandanna Shivaof India calls the "emerging politics of social movements."

        Yet, if developing sustainable communities is going to become a viableoption for the future, then serious attention must be given to the taskof movement building. By movement building, we are not simply talking hereabout the mushrooming of sustainable community projects around the world.NWIE this is certainly an important ingredient of building a movement. Italone is not enough to pose a serious challenge to the global managers andtheir corporate model of development. What is needed is for people involvedin participatory development and sustainable community networks to cultivatealliances with other social movements that are beginning to mount a challengeto the neo-liberal model of globalization. Today, there are increasing signsof this kind of social movement activity emerging on several other fronts.For example:

        1. Mobilizing Popular Resistance : In India, where minions have takento the streets to oppose the take-over operations of global corporationslike Kentucky Fried Chicken and Cargill- or in France, where workers mounteda successful strike against government efforts to cut social programs andpublic services in the name of global competitiveness; or in Mexico, whereMayan Indians rebelled against the mplementation of NAFTA for violatingtheir rights to communal ownership and control of their agricultural landsand forests; or in Norway where citizens mounted a public campaign to defeatthe adoption of the Mastricht Treaty which would was seen as having seriousnegative effects on communities, farmers and culture.

        2. Challenging Corporate Power: The steps being taken by citizen groupsin the U.S. to get State legislatures to revoke the charters of corporationswhose operations are violating their mandates; or the efforts being madehere in Canada and several other countries to develop strategies aimed atcountering the campaigns of big business coalitions and dismantling thestructures of corporate government; or the actions initiated by labour unionsand citizen groups to get corporations to adopt codes of conduct with adequatemonitoring and enforcement mechanisms (e.g. the Gap and Nike campaigns),as well as other actions utilizing litigation and boycotts as economic leverageto curb corporate power.

        3. Democratizing National Economies: The strategies being developed bycitizen movements in several countries to assert democratic control overtheir national economies by introducing: --- rigorous anti-trust legislationto break up monopolies; tighter restrictions on political advertising andelection financing; elimination of wasteful forms of corporate subsidies;measures for progressive tax reform; promotion of new protectionist measures(e.g. 'site-here, sell here' and 'invest-here, prosper-here' policies);investment criteria to stimulate the building of sustainable communitiesas well as regionally elected bodies to review investment proposals in thelight (E.g. the alternative budget in Canada) of this criteria.

        4. Regulating International Capital: The campaigns organized to promotethe adoption of the proposed Tobin tax designed to control speculation onfinancial markets and to increase public revenues of national governmentsfor social development purposes by taxing all capital transfers betweennation states (now estimated to be 1.4 trillion dollars a day 90% in formof currency speculation, not real trade) ; or the steps being taken to developplatforms calling for the re-regulation of investment by establishing newinvestment requirements (e.g. job content specifications, restrictions onplant closures, food safety criteria, environmental standards and ruleson life form patents); or the efforts being mounted to promote the establishmentof national social investment banks as well as strategies to leverage poolsof capital for social purposes (e.g. workers pension funds).

        5. Transforming Global Institutions: The recent " 50 years is Enough"campaign aimed at overhauling the operations of both the World Bank andthe INT to make them more directly accountable to the United Nations; or the initiatives being taken by social movements in Mexico, the US and Canada(and more recently, Chile) to establish a social agenda for the renegotiationof NAFTA and the promotion of an alternative development and trade pactthat ensures the building of sustainable communities to meet the economic,social and environmental needs of people in all participating countries;or proposals being promoted by citizen movements in both the North and theSouth for the replacement of the WTO with a new U.N. agency which has thepower and mandate to facilitate the renegotiation of trade agreements, there-regulation of transnational corporations and the coordination of governmentalaction to enforce these measures.

        In short, citizen movements composed of labour unions, environmentalorganizations, womens' networks, farmers associations, human rights groups,religious organizations, consumers groups, co-ops and credit unions, professionalassociations, international agencies and a host of other sectors are activelyengaged in struggles on all five of these fronts. In each case, there aresome basic objectives and alternative proposals to be found which coincidewith the priorities and principles advocated by people in sustainable communitynetworks around the world. The strategic challenge here is for key activistsin sustainable community networks to develop working alliances with citizenmovements who are on the leading edge of these and related frontline struggles.

        In so doing, we will be in a position to both broaden and deepen movementbuilding which is essential if we are going to be effective in putting thebreaks on economic globalization and set the stage for developing on a widespreadbasis communities that are equitable, sustainable and participatory. Whateverworking alliances we might seek to develop on these fronts, it is imperativethat we keep in mind the importance of cultivating international solidarity.In this period of globalization, dominated as it is by transnational enterprises,there is little chance that citizen movements can wage successful campaignswithout developing solidarity links with social movements in other countries.This is one place where the Internet can be useful in sustaining communicationlinks between peoples and movements.

        Finally, let me say that whatever we do, we must find ways to overcomethe 'politics of fear' that prevails in most of our countries today. Theonly way I know how to combat the politics of fear' is by promoting the'politics of hope.' In essence, that's what we have been talking about here.Despite the prospects of a grim future for the majority of people, not onlyin the South but increasingly in the North as well, the community-basedresistance and alternatives to the neo-liberal model of globalization beingmounted today by citizen movements in all the major regions of the globeis a sign of hope. The challenge, as Jesse Jackson often reminds us, isto Keep Hope Alive! Building a broader and de per movement for sustainablecommunities around the world certainly help all of us to Keep Hope Alive.


         

         

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