CUTS CITEE COMMUNIQUÉ
| CUTS>CITEE>PUBLICATIONS>E-Newsletter>CUTS CITEE Communiqué> Issues No. 6 |
| Home About CUTS CITEE CART CHD C-SPAC CUTS-ARC Contact CUTS |
|
|
|
||||
|
CUTS CITEE COMMUNIQUÉ No.1 CUTS CITEE COMMUNIQUÉ No.2 CUTS CITEE COMMUNIQUÉ No.3 CUTS CITEE COMMUNIQUÉ No.4 CUTS CITEE COMMUNIQUÉ No.5 CUTS CITEE COMMUNIQUÉ No.6 |
||||
Table of Contents1. Editor’s Note: Huge Tragedy in India 2. Debate: World Development Report, 2000-01
|
||||
EDITOR’S NOTE:HUGE TRAGEDY IN INDIAWe bring this new year’s issue with both greetings to our readers, as well as some very very sad news from this part of the world. I am using this forum to speak about the huge tragedy in the shape of an earthquake, which has struck the north-western state of Gujarat in India, because several of our friends have written to us enquiring about it. It happened on 26th January, our 51st Republic Day. Therefore before addressing the intrinsic issues of this Communiqué, I write a short note on the tragedy. As things stand today over 30,000 people have perished in the disaster with a total loss estimated to exceed $5-10bn. Some estimate the deaths to cross 100,000, as the rubble is still being cleared in cities like Ahmedabad, Bhuj and Surat. Reports from villages are creeping, though the cities with their multistoried buildings suffered much damage. Gujarat is the second most prosperous state in India and adjoining Rajasthan, where we are situated. We also felt the tremors for few moments here and elsewhere in the country, while rumblings have been heard even as recently as yesterday. Already both these states are suffering from drought for the second term. In Jaipur itself, we are already having a water problem, which will get worse in the ensuing summers. Be that as it may, relief is pouring into Gujarat from all over, including rescue teams and equipment are coming in from UK, Netherlands, Switzerland, Turkey, Russia, USA, Germany et al. Even a poor country like Bangladesh, has rushed food and other emergency supplies. More countries are joining this massive relief operation. The World Bank has been approached to provide assistance to the tune of $1bn and the Asian Development Bank, $500mn. Some commitments have also been made. There is also a massive community effort to raise money and supplies for the affected by all and sundry. The Prime Minister and the Chief Ministers of all states in India have appealed to people to send donations to their relief funds. Newspapers, etc. have also launched their own relief funds and are collecting from people. All the staff at CUTS, like in many offices, have donated one day’s salary. In the overall, NGOs are much ahead of government agencies in reaching relief. Should any reader/friend wish to donate any money to the relief efforts are welcome to send it to CUTS, which will be transferred to the PM’s Relief Fund. Please ask for bank details. In this issue, we carry an interesting debate around the World Development Report (WDR) of the World Bank on the issue of poverty eradication, in which CUTS also has a contribution. One of the WDR’s recommendations linked to the Gujarat Earthquake tragedy is the rubric of Security, which seeks to reduce poor people’s vulnerability to natural disasters etc, and promoting ways for them to cope with misfortune when it occurs. Critics have felt that the Bank is getting into domestic areas, which are not within its domain or competence. Be that as it may, it would be interesting to see what the Bank can do in the field, what it advocates in its glossies. Readers may recall that this WDR was already surrounded in controversy, when its main architect Ravi Kanbur of Cornell University resigned before the report was concluded. The controversy was around the theory of growth vs. growth with equity, which could lead to poverty eradication. Washington consensus prevailed, though the other view was also brought in but with only a glimpse. We hope that you would enjoy the diverse nature of issues being covered by this issue of the Communiqué. Happy reading and comments are most welcome! Secretary General Debate: World Development Report 2000-01The World Bank has brought out its World Development Report 2000-01. It contends that meagre assets, inaccessible markets and scarce job opportunities lock people in material poverty. Major reductions in poverty are possible but this calls for a more comprehensible approach that directly addresses the needs of poor people in three crucial areas: opportunity, empowerment and security. The report says that at a time of unprecedented prosperity in many countries, 2.8bn people, almost half of the world’s population, live on less than $2 a day. Out of them, 1.2bn live on the very margins of life, i.e. on less than a dollar a day. According to the report, private consumption per capita rose by 2.6 percent a year for the 1990-97 period for low and middle income countries as a whole. But for sub-Saharan Africa, where the number of people living in poverty rose by more than 80mn between 1987 and 1998, consumption actually fell by 1.2 percent annually. Although the incidence of poverty as a percentage of households dropped from 28.3 percent in 1987to an estimated 24 percent in 1998, the rate of reduction in poverty has slowed. Sustainable Reduction in PovertyThe experience has been that sustainable reduction in poverty can be achieved only through rapid and sustained aggregate growth. And achieving such growth is possible only in an economy in which competition prevails, supported by free markets at home and integration with world markets. The report argues that each country must devise its own poverty reduction strategy, and that these strategies will generally need to address three sets of issues. · Opportunity: expanding economic opportunity for poor people by stimulating economic growth, making markets work better for them, and allowing them to acquire assets such as land and education. · Empowerment: strengthening the participation of poor people in local decision making affecting their lives, and removing social barriers that result from distinctions of gender, race, ethnicity and social status. · Security: reducing poor people’s vulnerability to sickness, economic shocks, crop failure, natural disasters and violence, and promoting ways for them to cope with misfortune when it occurs. International EffortsReferring to international actions for poverty reduction, the report proposes the following: · expanding market access in rich countries’ for developing countries’ goods and services, · reducing the risks of economic crises, · encouraging the production of international public goods that benefit poor people, and · ensuring voice for poor countries and poor people in global forums. Also vital is development cooperation–foreign aid and debt relief. The report urges donors to accord high priorities to securing sufficient funding for the highly indebted poor countries initiatives. Missing ElementsSince an overwhelming majority of the world’s poor live in China and India, one would have thought that a report on attacking poverty would analyse the experience of these two countries. Unfortunately, it fails to do so. The emphasis on empowerment, by which the report means actions to make state and social institutions pro-poor and to build political support for such actions, is troubling for several reasons. First, the use of the word ‘empowerment’ is unfortunate, since it has already been used by the political left and right to mean very different things. Second, enforcing such actions requires strong political will. Whatever one means by the cliché ‘political will’, generating it certainly involves operating through domestic political processes in each country. Even if one accepts the need for reforms of socio-political institutions, one can argue strongly against the World Bank’s involvement in promoting them. Simply put, the charter of the Bank explicitly precludes its involvement in the domestic political processes of any member country. A compelling reason to argue against the Bank’s entry into domestic politics is that it has no experience or competence in the area. Furthermore, even if the Bank wanted to mobilise political will for the implementation of its recommendations, it will not succeed unless the recommendations are tailored to the specific socio-economic-political processes operating in each country. The Bank should have come out with a report focussed on the few countries and regions of the world where an overwhelming majority of the world’s poor live, and with recommendations that were drawn from the success of some countries in poverty reduction. However, the Bank has wandered into areas for which it has neither a mandate nor competence. It is a pity that a valuable opportunity has been missed. (Sources: Business Line, 05.08.00, 13.09.00; Financial Express, 20.09.00 and The Economic Times, 28.09.00) In many ways the WDR 2000-01 may be compared to a fugue in which three tunes are played to create a framework for poverty reduction: opportunity, empowerment and security. These are logged on to a set of international actions. The report is not even handed. Dealing with the reforms in the 1980s and 1990s, it concedes that developing countries did not enjoy rapid growth as a result of reforms, while growth was disappointing and negligible. This failure is, however, attributed more to external shocks, rising interest rates and debt servicing burdens, slower growth in industrialized countries than to the inadequacies of policy prescriptions themselves. In separate sections, the WDR is highly critical, even cynical, about the ability of developing country governments to deliver public programmes and services. Broadly, the reports adopts the principle of allocative efficiency and dismisses all welfare and redistribution schemes as regressive. The problem with the WDR is that it has no over-arching political philosophy to guide its deliberations; nor does it show an understanding of how the democratic process works. It talks of the need for pro poor coalitions that link the interests of the poor and non-poor. In the final analysis, the latest WDR is an attempt to defend the policies pursued by the IMF and the World Bank for some years. (Source: Business Line, 23-11-2000) a. THE SOCIAL CLAUSE AND LINKAGE AT THE WTO: WHAT IS AT STAKE? This is a brief summary of the discussions kicked off by Jagdish Bhagwati, Arthur Lehman Professor of Economics and Professor of Political Science, Columbia University, New York, USA, at a Round Table held in New Delhi on 16th December, 2000. Vinod Vaish, Secretary, Ministry of Labour, Government of India, and Muchkund Dubey, former Foreign Secretary, Government of India commented on his discourse, while the discussion was moderated by Pradeep S Mehta. The debate on linkage between trade and non-trade issues is not new. However, it received a renewed thrust in the late 1980s and 1990s especially at the GATT-WTO forum. The situation has not changed much one-year after the collapse of the Seattle Ministerial Conference of the World Trade Organisation (WTO) of December 1999. The Roundtable was organised by CUTS-CITEE in this context. The objective was to discuss issues pertaining to the persistent demands of some leading western countries, labour unions, environmental and other NGOs to link market access rights of countries to labour standards through a social clause. Representatives of trade unions, non-governmental organisations, government, media, academic and research organisations and business chambers participated in this half-day discussion. Diplomats from the EU, UK and Australian delegations also participated. Prof Bhagwati started off the discussion by going into the basics of trade theory to point out that the debate on ‘social clause and linkage’ does not fit into the very organising principle of international trade. He argued that even intellectual property rights had nothing to do with trade in its strict sense of the term, and should not have belonged to the WTO. The basic objective of the GATT/WTO was to protect the interest of member countries in the global trading system. But this perception was changed at Seattle when rich countries, their NGOs and trade unions motivated by extraneous reasons tried to push for linkages neglecting the concern of poor countries. The WTO rests on three legs, the original GATT Agreement (GATT 1994), General Agreement on Trade in Services (GATS) and Trade Related Intellectual Property Rights (TRIPs), the third leg. The IPR does not belong to the trade category, but got into the global trade regime. For dealing with IPRs, the World Intellectual Property Organisation (WIPO) is the right platform and it has the mandate for it. Culture is an important element for determining policies and priorities in the present day world. NGOs in the West are not free from local political developments and intellectual concerns of the land. NGOs in the developing countries do borrow some of the ideas from the West without understanding the politics behind it. Misrepresentation of child labour issue in the south is a case in point. There are agreements aimed at protecting capital, labour and environment (domestic as against global). Environment should be delinked from the debate on linkages. Moreover, the WTO does not have the scientific back up to negotiate on issues such as Genetically Modified Organisms (GMOs) which was exemplified by the Beef-Hormone dispute. The two major changes that have taken place at the global level in the recent past viz. economic globalisation and civil society globalisation. The WTO is exclusively for economic globalisation, not for globalisation of other cultures and customs. Economic globalisation should not encompass areas such as social and gender issues. Those who argue for Social Clause at the WTO have a hidden agenda. Putting it through the WTO i.e. the sanctions-based platform would not provide any solutions. If we put in labour standards, it will wreck the WTO system. These are complex issues that the WTO cannot handle, it has to be handled by expert bodies such as International Labour Organisation (ILO).The most important aspect among core labour standards is the freedom of association, which is denied in the USA. For example sympathetic strikes are strongly resisted in the US. As a result millions of workers are denied the right to associate and exercise their basic labour rights. Similarly replacement labour is allowed during strikes, thus neutralising the labour’s powerful weapon of a strike. Bhagwati reminded the gathering that the world has changed a lot, same as the case with the WTO negotiations. Since this is not a battle that Government of India can fight alone, it should make use of its NGOs, especially creative ones, such as CUTS and CSE, for international negotiations. Further, on Linkages, Government of India, NGOs and labour unions should work together. Speaking against the linkages, labour secretary of the Government of India, Vinod Vaish said, trade is an important weapon in the hands of the rich countries to limit the export of developing countries. The concerns of Northern trade unions and NGOs towards the poor labour standards in the South are not because of altruistic reasons but to further their own commercial interests. The developed countries seem to have a certain strategy to use the ILO, after their failure to bring in the social clause in the WTO system. The whole process of selection of workers’ representatives to the ILO is a manifestation of this strategy. The labour unions are not united at the ILO. Furthermore, the voting pattern at the ILO does not reflect the concerns of the developing countries. Vaish then gave examples of multilateral environment agreements, having worked in that area for quite some time. In the sphere of environment, there are specific agreements to deal with specific issues such as ozone layer, hazardous wastes, etc. These agreements have nothing to do with the WTO. The same approach may be followed for labour standards also. ILO should facilitate technical cooperation on the issues of child labour. In India there may be a few aberrations on abiding labour standards but the labour laws are in line with the ILO policies. Muchkund Dubey opined that economic development and human rights are two different issues, which require separate consideration. Export production in developing countries comprise only 4.5% of the total production and the remaining 95.5% work in the domestic and informal sectors. Therefore, a miniscule portion of the problem is touched upon by the social clause debate. Labour standards are also related to total production structure of the developing countries. The UN Covenant on Social and Economic Rights and the Civil and Optional Clause allows the affected parties to approach the International Court of Justice (ICJ) for redressing their grievances. It is essential to accept implementation problems of the WTO Agreements as an issue, which requires a serious thought, unfortunately little attention is paid on it. For instance, some of the WTO Agreements were originally not intended to have the present objective, but it has turned out to be like that. The views put forth by the panellists led to a lively discussion on the floor of the house. One comment was that ‘there is ambivalence in the way India approaches the issue of protecting the organised and unorganised workers’. India is a signatory to a number of conventions, but there are some implementation problems at local level, which need to be addressed. Further, the protection of workers right at the organised sector should not be at the cost of workers in the unorganised sector. The EU representative: Joe Cunnane pointed out that the EU is also not in favour of a social clause with sanctions in the WTO, but that the issue has to be discussed on a joint forum of the ILO and WTO. The future of the debate on linkages, in the context of the entry of China into the WTO also came up for discussion. Some expressed the view that China’s entry into the WTO would weaken the demand for linkages. There was a general consensus in the meeting that the WTO is not the right body to deal with the issue of labour standards by inserting a social clause. On the issue of economic liberalisation and globalisation, the general view was that government at the national as well as sub national levels should devise proactive policies to create opportunities so that the poor can be benefited. Further, liberalisation policies should be evolved by taking into account social safety nets, so that adjustment process goes smoothly. It was also suggested that recognising the problem is the first step in solving any issue. But the trade sanctions approach cannot be a solution to the problem. It is not workers’ interest that would alone suffer in the linkage debate, but the real issue is how do we manage a change at the WTO. b. IS WTO A THREAT OR AN OPPORTUNITY FOR INDIA? The existing ambivalent attitude of developed countries particularly the US and European nations towards the multilateral trading system weaken the effectiveness of the WTO. These countries do give priority to the regional trading arrangements such as NAFTA, EU, etc. remarked Andrew Walter. A public meeting on this topic was held at Jaipur, India on September 7, 2000. The speakers were B.K Zutshi, and Andrew Walter. While Zutshi, the noted Indian trade negotiator, served as the ambassador to the GATT/WTO during and just after the Uruguay Round, Walter teaches at the London School of Economics and Political Science. Walter, in his presentation, emphasised the need for amendments to the WTO agreements, which have inherent biases against the developing countries. His views can be summarized in his own comment “WTO is a democratic organisation but it doesn’t act democratically”. There is also a paradoxical situation emerging out of the process of globalisation across the world. For instance, in the liberal economies of developed countries there is increasing demand for government intervention, whereas deregulation is going on in closed economies of developing nations. Therefore, what is important is that along with liberalisation, there has to be adequate changes in the macro-economic policies. Zutshi sounded optimistic about the WTO system in terms of protecting the rights of the developing countries. The reasons being, the WTO has a fairly well defined legislative, executive and judicial structure, which could provide the basis of the rule-based WTO system. The positive points with the WTO--which facilitates the multilateral trade system--are transparency and non-discrimination in the organisation and exchange of concessions, absence of bureaucracy. Since the secretariat only facilitates its working, it is democratic in nature and is wholly administered by its members and the unique dispute settlement system. Moreover, the WTO provides numerous opportunities for the member countries to grow and if there is any need for changes in the policy, negotiations are possible at every stage. In terms of threat or opportunity, there were some very pointed floor interventions. Some remarks came in particularly in the context of farmers of edible oilseeds suffering huge losses due to cheap imports of oils from outside. An industrialist, complained of competing against low-cost imports, which has lead to his factory closing down. Concluding the discussion, the moderator, Pradeep S Mehta observed that the role of the WTO should be assessed within the light of cost-benefit analysis, which is perhaps the best and the safest mode, any country could choose for regulating international trade negotiations. Furthermore, he pointed out that indeed the industry in India doesn’t enjoy a level playing field due to high transaction costs, but it doesn’t give them a reason to produce shoddy goods. c. CAN TRADE SANCTIONS OR BOYCOTTS ELIMINATE CHILD LABOURThe demand for linkages does not reflect the realities, which exist in the South such as child labour, labour standards and environmental protection, hence trade sanctions are not the right approach to deal with these issues. What is needed is to strengthen the existing non-sanction based institutions at both the national and international levels for effectively tackling these issues. These views emerged in a panel discussion organised by CUTS-CITEE, on 14th November, 2000 at Durban South Africa, to draw attention to the issue. The purpose of the discussion was to elicit views of consumer organisations on linkages issue. Moderated by Pradeep S. Mehta of CUTS, the panel had two speakers: Robin Simpson of National Consumer Council (NCC), UK and Zafar Mirza of The Network for Consumer Protection, Pakistan. Over 50 delegates to the 16th Congress of the Consumers International, mainly from various consumers organisations around the world attended the meeting. To start with, Mehta recalled that the major criticisms against developing countries are poor labour standards, which includes the prevalence of child labour. He identified some of the issues that need to be carefully thought about while examining the applicability of trade sanctions as a tool to achieve the objective of elimination of child labour. Robin Simpson argued that it is not fair on the part of the developed countries to push for linking child labour issues with international trade. This is because the developed countries themselves had experienced similar social evils during the process of development. Therefore, developing countries should be given sufficient time to get rid of social evils such as child labour rather than imposing trade sanctions. Moreover, the causes for prevalence of child labour are economic, and not political as the trade unions claim Further, the countries that are pushing for labour standards at the WTO are themselves not good at observing the basic ILO conventions. Adding to the discussion, Zafar Mirza spoke on the ineffectiveness of trade sanctions in eradicating child labour by citing examples from Pakistan. Pakistan has been in the limelight since the linkage debate came out. The football industry in Sialkot was one of the major targets for trade sanctions and boycott. Those who campaigned against child labour abuses in this sector, have misconceptions that child labour had been eliminated from this sector. The fact is that these children lost their jobs in the football industry, and entered into hazardous occupations, which paid far lower than the football industry. The third speaker: Wibo Koole of Consumentenbond, The Hague, who was to present an opposite view, did not show up. However, Rhoda Karpatkin, president of the powerful US-based Consumers Union participated actively, and came out convinced that poverty eradication and socio-economic development is the only cure for a curse like child labour. She agreed that sanctions can backfire. Participants opined that consumers have the right to boycott goods, which they find having objectionable elements, but this cannot be equated with trade sanctions. Trade sanction is a double-edged weapon and it does not discriminate between firms, observing good and poor labour standards. Therefore, sanctions would exacerbate the problem rather than reducing it. d. 7 Up PROJECT LAUNCH WORKSHOP The launch workshop of the 7 Up project was held on 20-21 December, 2000 at Jaipur, India. The project proposes to do a comparative study of competition regimes of seven developing countries in the Commonwealth. The project is undertaken by CUTS-CITEE with the support of Department for International Development (DFID), Government of UK. The seven project countries are India, Pakistan, Sri Lanka, Tanzania, Zambia, Kenya and South Africa. The project aims to: · evaluate the existing competition law and its implementation on the basis of indicators such as budgets, composition and structure of the competition regime and authority vested on it; · identify specific problems and their solutions, especially on the basis of good practices elsewhere; · suggest ways forward to strengthen existing legislation and institutions dealing with competition and consumer protection issues; · assess capacity building needs of the government, its agencies and the civil society; and · promoting competition culture by involving civil society and other influential entities during this exercise. The objectives of the meeting were to: orient and familiarize the project partners about the study, its methodology and also to provide a platform for interaction between various competition experts and the country researchers. The meeting was attended by competition policy practitioners, from Australia, Brazil, South Africa, Zambia and India, representatives of international organisations such as UNCTAD, WTO, World Bank, apart from the project partners in the seven countries. e. REGIONAL TRAINING SEMINAR ON WTOThe international trading system is undergoing rapid changes since the formation of the WTO, which has made it imperative for the business managers, government functionaries, civil society representatives to understand and comprehend the nuances of the new trade order. Realising this need CUTS-CITEE, in association with the London School of Economics and Political Science (LSE), U.K conducted a South Asian Regional Training Seminar at Jaipur in September 2000. This was the first time that a paid-for seminar was organised by CUTS. However the course was subsidised through a grant from DFID, UK. The purpose of the seminar was to build capacities of senior functionaries from the government, inter-governmental organisations, business firms and chambers, academic institutions and the civil society to face the changing world business environment. Experts from the LSE and organisations in India and other developing countries interacted with the participants. The training modules were such that it should enable participants to comprehend the various WTO instruments. Looking at the success of the programme, it was decided that the seminar will become and annual feature. The Functioning of Patent Monopoly Rights in Developing Economies: In whose interest? Author: Taimoon S. Stewart The report questions the persisting view that developing countries would gain by pursuing a strong intellectual property protection regime, in terms of flows of trade, investment and technology transfer. The report analyses the functioning of patents regimes in developing economies in the past and present.(ISBN 81087222-36-0, Rs.100/$25) a) Globalisation: Enhancing Competition or Creating Monopolies? The paper sheds light on some of the development dimensions of competition law and policy. It also analyses how competition policy and law can be used in the multilateral framework in order to make it an equitable system. (No.8/2000) b) Process and Production Methods (PPMs)–Implications for Developing Countries The theme of the paper is that most environmental problems are intrinsically local and their effects do not get transferred to importing countries through products. Hence using PPM measures, as trade barriers could never become an effective or appropriate instrument in dealing with environmental problems. (No.7/2000) MONOGRAPHS a) Trade, Competition & Multilateral Competition Policy As the title suggests, this monograph spells out the areas of interaction between trade and competition through case studies, and shows that such interactions are on the rise. The novelty of this monograph is that it highlights the concerns and perspective of the south vis-à-vis multilateral competition policy and competition regime. (36p#0005, Rs.20/$5) b) All about Competition Policy & Law for the advanced learner This monograph provides a vivid description of the various elements of competition law & policy and how that can be used for curbing different kinds of restrictive business practices (RBPs) in a comprehensive manner. This can be a good guide to anybody who wants to learn more about the subject. (70pp#0006,Rs.Rs.20/$5). NEWSLETTER ReguLetter A quarterly newsletter covering developments relating to competition policy and economic regulations around the world. Its main purpose is to provide a media, in particular to the civil society, to understand the issues clearly and promote a healthy competition culture in the world. (16 pp, subscription: $15/Rs.50 p.a.) Seminar on the WTO Agreements Affecting Market Access, April/May, 2001, Geneva The WTO rules in the present multilateral trading system as an instrument to gain or block market access. The issues are more relevant to developing countries as they are the ones who often face barriers while accessing markets. Therefore, it has become indispensable for them to understand the intrinsic issues involved with several Rules. The objective of the seminar is to analyse the problems faced by developing countries while dealing with the WTO Agreements viz. Sanitary and Phytosanitary Measures, Technical Barriers to Trade, Antidumping and Rules of Origin. For more information please contact Mr. K.S. Sajeev/ Ms. Purnima Purohit at the following address.
|
||||
|
E-newsletter by the CUTS Centre for International Trade, Economics and Environment D-217, Bhaskar Marg, Bani Park, Jaipur 302 016 India Ph: 91.141.2282821, Fax: +91-141-2282485/ Email: cuts@cuts.org Web: http://www.cuts-international.org Materials from this communiqué may be freely cited, subject to proper attribution |
||||
|
If by chance you are receiving this electronic newsletter inadvertently, we apologise for the same. Please do let us know to make the necessary amendments. |
||||
| CONTACT US | ||||
CUTS
Centre For International Trade, Economics
& Environment (CITEE)
D–217, Bhaskar Marg, Bani Park, Jaipur 302 016, India, Ph:
+91(0)141-228 2821-3 Fx: +91(0)141-228 2485 Email: cuts@cuts.org |
D-217, Bhaskar Marg, Bani Park, Jaipur 302 016, India Ph: 91.141.2282821, Fax: 91.141.2282485
Hosted by: www.fullestop.com |
