GLOBAL ECONOMIC VIEWPOINT
G-8 SHOULD NOT FORGET THE ROW (REST OF THE WORLD)
By Jose Ramos-Horta
DILI, East Timor -- As the G-8 countries gather in Italy to assess the state of globalization, there are several vital issues to put into perspective and ponder.
The world's economy is many times larger than it was only 50 years ago. Particularly in the Northern countries, which have the greatest concentration of personal wealth, the quality of life has improved dramatically. Mind-boggling advances have occurred in vast fields of human endeavor, from genetics to computers. Human beings have walked on the moon, Mars is being studied at ever closer range.
Yet the same human intelligence that has produced such advances seems so far unable to eliminate extreme poverty or tropical diseases such as malaria and cannot provide clean water to hundreds of millions in Africa, Asia and Latin America.
And the gap between rich and poor has grown, not diminished. Hundreds of millions survive on less than $1 a day, children walk miles to go to school, if at all, or to fetch firewood and water for the household. Child labor, prostitution and sex slavery are rampant in the impoverished but aspiring societies.
In their pursuit of even greater prosperity, weapons-producing countries aggressively push arms in developing countries that cannot even afford to provide clean water to most of their people, fueling local, often ethnic, conflicts.
Do we have some answers to these challenge from the dark side of the human condition?
There is no dispute that abject poverty, child labor and prostitution are indictments of all humanity. However, poverty should not only touch our conscience: It is also a matter of peace and security because it destabilizes entire countries and regions. That in turn threatens the integration of the global economy that is vital if the rich are to stay rich or if the poor are to move up, if only an inch.
One need not be original to propose some key elements of a solution to these problems, as those more enlightened than I have.
Drawing on the ideas already in circulation, here is the agenda I propose:
-- Debt cancellation.
The G-8, European Union and World Bank should lead the initiative in writing off the entire public-sector debt of all non-oil-producing countries whose per capita income is less than $1,000.
In addition, a special fund should be developed by the World Bank and the U.N. Development Agency (UNDP) to assist these countries in improving governance and generating employment for the poorest.
Other highly indebted countries (for instance, Indonesia, Nigeria, Brazil and Mexico) should also benefit from a special debt relief package of up to half of their public-sector debt if the proceeds are aimed at poverty reduction and education.
For all cases there must be strict conditions involving reduction in defense expenditures, democratic reforms (including of the security forces), good governance and accountability, and allocation of saved resources to eradicating poverty.
Debt cancellation or relief can be phased in in tandem with the reform policies being adopted and implemented by the targeted country.
-- Increase overseas development assistance.
All rich countries should increase the percentage of their overseas development assistance within the next 10 years to the U.N.-recommended 0.8 percent of GDP. Perhaps on a dollar-for-dollar basis where applicable, such aid could match reduction in military expenditures associated with debt relief.
-- Improve market access.
Following the example set by the European Union, the United States, Canada and Japan should open up their markets for goods from the HIC (highly indebted countries) and ease some of the stringent quality-control and quarantine rules that make it impossible for the poorest countries to export their goods and commodities.
-- Build an anti-poverty coalition.
The violent demonstrations that greet every gathering of world leaders from Seattle to Prague and Davos to Gothenberg reflect the justified frustration of those who are genuinely concerned about the effects of globalization on the poorest of the world.
However, one can also see the opportunistic manipulation of these people by Communist-era hard liners who, seeing their world revolution agenda discredited with the collapse of the Soviet Union, now try to hijack what is otherwise a genuine anti-poverty movement.
This past year I attended the World Economic Forum in Davos, Switzerland, during the last week of January. Looking around me, I saw the richest and the most powerful people in the world and realized that I was the poorest among that lot. Yet I did not see, hear or read any complicated plot by the rich to rule the world.
From that modern-day Robin Hood, George Soros, to Bill Gates and James Wolfensohn, the World Bank president, I heard genuine concern and motivation to help the poor.
An ocean away in Porto Allegre, Brazil, thousands were meeting in defiance of the rich running the world from Davos. From that snowy perch in the Alps, as one of the poorest among the richest, I concluded there was enough good will on both sides of the divide to meet halfway.
The poor will not see their lot improved if we opt for the arrogant and discredited Marxist dogma still trotted out by far too many as a solution to the world's ills. The rich will not able to continue to reap the profits of their investment in globalization if they do not seriously address the issues of poverty on a world scale.
To the end of establishing this middle position, I propose a world summit bringing together representatives from the G-8, World Bank, Group of 77 (developing nations' group in the United Nations), development and human rights NGOs (non-governmental organizations) as well as the corporate world to debate and fashion a global strategy. The ultimate aim should be to boost the poorest with a sort of global Marshall Plan that involves debt cancellation or relief as well as proactive programs to reduce poverty.
Globalization has tied the G-8 to the ROW (rest of the world). To sink or to swim is the choice they now have to make together.
(c) 2001, Nobel Laureates. Distributed by Los Angeles Times Syndicate International, a division of Tribune Media Services.
For immediate release (Distributed 7/9/01)