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Globalization#5: the turn away

More from John Ralston Saul:

"Observant national leaders couldn't help but notice that the theories of Globalisation were failing them. The most public of these failures was the breakdown of international lending and debt mechanisms. For a short period it looked as if the IMF's punishing approach might actually work. For a dozen years most Latin American governments tried to follow instructions laid down by the IMF, Western governments and the private banks. They endured crucifixion economics, and in many cases this eventually produced apparently solid growth, even if the parallel result was a greater rich/poor gap. But in each case the recovery was followed, a few years later, by even greater collapse. It turned out that such prolonged austerity had weakened, not strengthened, the social-economic fabric. So after all of the liberalisations, privatisations and inflation-stabilisation programs, growth in Latin America in the late 1990s was a little over half what it had been before the reforms."

He goes on to say:

"In other words, Latin America no longer believes in Globalisation. Neither does Africa. Nor does a good part of Asia. Globalisation is no longer global. Indeed, most Western finance ministers have been quietly working for some time on partial reregulation of the markets. Why quietly? To avoid the ferocity of the true believers.

In 1998 the governor of the Reserve Bank of Australia, Ian Macfarlane, began calling for reregulation. "More people are asking whether the international financial system as it has operated for most of the nineties is basically unstable. By now, I think the majority of observers have come to the conclusion that it is, and that some changes have to be made."

In the same year a combination of street demonstrators and distrustful ministers of finance from around the developed world killed the Multilateral Agreement on Investment negotiations, which had been aimed at a further Globalisation of finance and investment. They rejected the idea of yet more business-oriented binding treaties, with no binding political or social counterweights."

That is what needs to be emphasised. What is rejected is a particular model of globalization. The corporate one. It was rejected because it was indifferent to the old fashioned politics and social life of nation-states.

previous Posted by Gary Sauer-Thompson at February 29, 2004 09:36 AM | TrackBack