|
| Book
review
Rethinking
globalisation by Martin KhorPublished
by Zed Books Ltd, 2001. http://www.zedbooks.demon.co.uk
October, 2001.
In a clear and concise style Martin Khor provides
a critique of economic globalisation. He underlines the heterogeneous nature of
globalisation which has failed to deliver peace and prosperity to the world, and
in particular trade, finance and investment liberalisation. He also offers some
proposals on how poor countries can start benefiting from the global economy.
He shows the impotence of poor countries in changing economic policies determined
by powerful international economic agencies dominated by the rich countries.
In a simple and schematic style Khor lists the obstacles faced by poor countries
under globalisation. Trade is one of these. He shows that poor countries lost
52% in terms of trade between 1980 and 1992. He writes "the income losses from
falling terms of trade probably constitute the largest single mechanism by which
real economic resources are transferred from South to North". Despite these losses,
Mr Khor says, "western governments keep enforcing upon poor countries policies
to liberalise their economies which are at odds with [western] national protective
economic policies made up of high tariffs and subsidies." He notes that forced
capital liberalisation has not increased the inflows of capital to poor countries,
therefore increasing the list of faults of IMF-led structural adjustment programmes.
Another
weakness the South faces from globalisation is due to the "globalisation of policy-making",
according to Mr. Khor. He unpacks this concept by showing that developed countries
" control the processes and policies of international economic agencies", and
therefore are better at minimising the conflict between global and national policies.
Poor countries' influence in the international organisations is almost irrelevant,
and considering that "many domestic economic policies of developing countries
are … being made in the WTO negotiations, rather than at the national level,"
it is easy to deduce the lack of ownership of those policies. Mr Khor also analyses
the link between loan conditionalities and the promotion of capital liberalisation.
In fact "being heavily indebted and dependent on bilateral aid donors and multilateral
loan organisations, developing countries have been drained of their capacity to
negotiate even on the terms of loan conditionalities"
This international
financial system skewed in favour of rich countries is an obstacle to the development
of poor countries, which are in perpetual debt crises. Moreover, the lack of "
an international mechanism for the fair sharing of burden between creditor countries
and debtor countries" exacerbates the crisis transferring the cost of the debt
burden on malnourished populations. Mr Khor proposes the application of US Chapter
11 insolvency procedure, so that "a country facing the imminent prospect of default
can declare a debt standstill, get court clearance for protection from creditors,
obtain fresh working capital, restructure its debts and plan for economic recovery,
which in turn can eventually service the debts adequately."
What is clear
from Khor's book is that the redesign of the international economic order has
now become imperative.
Reviewed by Michela Telatin |
