Walden Bello*
The
last year will probably go down as one of those defining moments in the
history of the world economy, like 1929. Of course, the structures of
global capitalism appear to be solid, with many in the global elite in
Washington, Europe, and Asia congratulating themselves for containing the
Asian financial crisis and trying to exude confidence about launching a
new round of trade negotiations under the World Trade Organization (WTO).
What we witnessed, nevertheless, was a dramatic series of events that
might, in fact, lead to that time when, as the poet says, "all that
is solid melts into thin air."
For
global capitalism, the year began a month early, on Nov. 30-Dec. 1, 1999,
when the Third Ministerial of the WTO collapsed in Seattle. It ended
earlier this month with an equally momentous event: the unraveling of the
Climate Change Conference in the Hague.
Seattle:
the Turning Point
The
definitive history of the Seattle events still needs to be written, but
they cannot be understood without the explosive interaction between the
militant and unrelenting protests of some 50,000 people in the streets and
the rebellion of developing country delegates inside the Seattle Convention
Center. Much has been made about the different motivations of the street
protesters and the Third World delegates and the differences within the
ranks of the demonstrators themselves. True, some of their stands on key
issues, such as the incorporation of labor standards into the WTO, were
sometimes contradictory. But most of them were united by one thing: their
opposition to the expansion of a system that promoted corporate-led
globalization at the expense of social goals like justice, community,
national sovereignty, cultural diversity, and ecological sustainability.
Still,
the Seattle debacle would not have occurred without another development:
the inability of the European Union and the United States to bridge their
differences on key issues, like what rules should govern their
monopolistic competition for global agricultural markets. And the fallout
from Seattle might have been less massive were it not for the brutal
behavior of the Seattle police. The assaults on largely peaceful demonstrators
by police in their Darth Vader-like uniforms in full view of television
cameras made Seattle’s mean streets the grand symbol of the crisis of
globalization.
When
it was established in 1995, the WTO was regarded as the crown jewel of
capitalism in the era of globalization. With the Seattle collapse,
however, realities that had been ignored or belittled were acknowledged
even by the powers-that-be whose brazen confidence in their own creation
had been shaken. For instance, that the supreme institution of
globalization was, in fact, fundamentally undemocratic and its processes
non-transparent was recognized even by representatives of some of its
stoutest defenders pre-Seattle. The global elite’s crisis of confidence
was evident, for instance, in the words of Stephen Byers, the UK Secretary
for Trade and Industry: "The WTO will not be able to continue in its
present form. There has to be fundamental and radical change in order for
it to meet the needs and aspirations of all 134 of its members."
Seattle
was no one-off event. Bitter criticism of the WTO and the Bretton Woods
institutions was the not-so-subtle undercurrent of the Tenth Assembly of
the United Nations Conference on Trade and Development (UNCTAD X) held in
Bangkok in February. Indeed, what brought an otherwise uneventful
international meeting to the front pages of the world press was the
pie-splattered face of outgoing IMF Managing Director Michel Camdessus,
who was on the receiving end of a perfect pitch from anti-IMF activist
Robert Naiman.
From
Washington to Melbourne
Naiman’s
act helped set the stage for the first really big post-Seattle confrontation
between pro-globalization and anti-globalization forces: the spring
meeting of the IMF and the World Bank in Washington, DC. Some 30,000
protesters descended on America’s capital in the middle of April and found
a large section of the northwest part of the city walled off by some
10,000 policemen. For four rain-swept days, the protestors tried, unsuccessfully,
to breach the police phalanx to reach the IMF-World Bank complex at 19th
and H Sts., NW, resulting in hundreds of arrests.
The
police claimed victory. But it was a case of the protestors losing the battle
but winning the war. Just the mere fact that 30,000 people had come to
protest the Bretton Woods twins was already a massive victory according to
organizers who said that the most one could mobilize in previous protests
were a few hundred people. Moreover, the focus of the media was on
Washington, and the first acquaintance of hundreds of millions of viewers
throughout the world with the World Bank and IMF were as controversial
institutions under siege from people accusing them of inflicting poverty
and misery on the developing world.
From
Washington, the struggle shifted to Chiang Mai in the highlands of
Northern Thailand, where the Asian Development Bank (ADB), a multilateral
body notorious for funding gargantuan projects that disrupted communities
and destabilized the environment, held its 33rd Annual Meeting in early
May. So shaken was the ADB leadership by the sight of some 2000 people
asking it to leave town that soon after the conference, ADB President
Tadao Chino established an vice presidential level "NGO Task
Force" to deal with civil society. Fearful of even more massive protests
in 2001, the ADB also shifted the site of its next annual meeting from
Seattle to Honolulu in the belief that the latter would be a secure site.
Chiang
Mai had significance beyond the ADB, however. With a majority of the
protesters being poor Thai farmers, the Chiang Mai demonstrations showed
that the anti-globalization mass base went beyond middle class youth and
organized labor in the advanced countries. Equally important, key
organizers of the Chiang Mai actions, like Bamrung Kayotha, one of the
leaders of the Forum of the Poor, had participated in the Seattle protest,
and they saw Chiang Mai not as a discrete event but as a link in the chain
of international protests against globalization.
The
battle lines were next drawn Down Under, in Melbourne, Australia, in early
September. The glittering Crown Casino by Melbourne’s upscale waterfront
had been chosen as the site of the Asia- Pacific Summit of the World Economic
Forum (Davos Forum) which had become a leading force in the effort to put
a more liberal face to globalization. The casino, many activists felt, was
a fitting symbol of finance-driven globalization. In nearly three days of
street battles, some 5,000 protesters were at times able to seal off key
entrances to the Casino, forcing the organizers to bring some delegates in
and out by helicopter, again in full view of television. And again, as in
Seattle, rough handling of demonstrators by the police, many of them
mounted, magnified the global controversy over the event.
The
Battle of Prague
Later
that month came Europe’s turn to serve as a battleground. Some 10,000
people came from all over the continent to Prague, prepared to engage in
an apocalyptic confrontation with the Bretton Woods institutions during
the latter’s annual meeting in that beautiful Eastern European city in the
most beautiful of seasons. Prague lived up to its billing. With
demonstrations and street battles trapping delegates at the Congress
Center or swirling around them as they tried to make their way back to
their quarters in Prague’s famed Old Town, the agenda of the meeting was,
as one World Bank official put it, "effectively seized" by the
anti-globalization protesters. When a large number of delegates refused to
go to the Congress Center in the next two days, the convention had to be
abruptly concluded, a day before its scheduled ending.
As
important as the protests in Prague was the debate held on Sept. 23 at the
famous Prague Castle between representatives of civil society and the
leadership of the World Bank and the IMF, an event orchestrated by Czech
President Vaclav Havel. Instead of bridging the gap between the two sides,
the debate widened it, since, in response to concrete demands, World Bank
President James Wolfensohn and IMF Managing Director Horst Koehler were
not prepared to go beyond platitudes and generalities, as if worried that
they might overstep the bounds set by their G-7 masters. George Soros, who
defended the Bank and Fund at the debate, said it all when he admitted
that Wolfensohn and Koehler had "performed terribly" and had
blown their most important encounter with civil society.
After
Seattle, much talk about reforming the global economic system to bring on
board those "being left behind" by globalization was emitted by
establishment personalities like Bill Gates, Bill Clinton, Tony Blair, Kofi
Annan, and Nike CEO Phil Knight. The Davos Forum, in fact, placed the
question of reform at the top of the agenda of the meetings it held for the
global elite.
A
year after Seattle, however, there has been precious little in the way of
concrete action.
The
most prominent reform initiative, the Group of Seven’s plan to lessen the
servicing of the external debt of the 41 Highly Indebted Poor Countries (HIPC)
has actually delivered a debt reduction of only $US 1 billion since it
began in 1996 – or a reduction of their debt servicing by only 3 per cent
in the past four and a half years!
One
year after the Seattle collapse, talk about reforming the decision-making
process at the WTO has vanished, with Director General Mike Moore, in
fact, saying that that the non-transparent, undemocratic
"Consensus/Green Room" system that triggered the developing
country revolt in Seattle is "non-negotiable."
When
it comes to the question of the international financial architecture,
serious discussion of controls on speculative capital like Tobin taxes has
been avoided. An unreformed IMF continues to be at the center of the
system’s "firefighting system." A preemptive, pre-crisis credit
line at the Fund (which no country wants to avail of) and a toothless
Financial Stability Forum – where there is little developing country
participation – appear to be the only "innovations" to emerge from
the Asian, Russian, and Brazilian financial crises of the last three years.
At
the IMF and the World Bank, similarly, there is no longer any talk about
diluting the voting shares of the US and European Union in favor of
greater voting power for the Third World countries, much less of doing away
with the feudal practices of always having a European head the Fund and an
American to lead the Bank. The much-vaunted consultative process in the
preparation of "Poverty Reduction Strategy Papers" (PRSP) by
governments applying for loans is turning out to be nothing more than an
effort to add a veneer of public participation to the same technocratic
process that is churning out development strategies with the same old
emphasis on growth via deregulation and liberalization of trade, with
maybe a safety net here and there. At the Bank, strong resistance to
innovations that would put the priority on social reforms led to the
resignation of two reformers: Joseph Stiglitz, the chief economist, and
Ravi Kanbur, the head of the World Development Report task force.
Debacle
in The Hague
The
protests throughout the year had a strong anti-TNC strain, with the World
Bank, IMF, and WTO regarded as servitors of the corporations. A strong
distrust of TNCs had, in fact, developed, even in the United States, where
over 70 per cent of people surveyed felt corporations had too much power
over their lives. Distrust and opposition to TNCs could only be deepened
by the collapse in early December of the Hague Conference on Climate
Change, owing to US’s industry’s unwillingness to significantly cut back
on its emission of greenhouse gases. At a time that most indicators are
showing an acceleration of global warming trends, Washington’s move has
reinforced the conviction of the anti-globalization movement that the US
economic elite is determined to grab all the benefits of globalization
while sticking the costs on the rest of the world.
Assessing
the post-Seattle situation, C. Fred Bergsten, a prominent advocate of
globalization, told a Trilateral Commission meeting in Tokyo last April
that "the anti-globalization forces are now in the ascendancy." That
description is even more accurate now. With the global elite itself having
lost confidence in them, a classic crisis of legitimacy has overtaken the
key institutions of global economic governance. If legitimacy is not
regained, it is only a matter of time before structures collapse, no
matter how seemingly solid they are, since legitimacy is the foundation of
power structures. The process of delegitimation is difficult to reverse
once it takes hold. Indeed, what we might call, following Gramsci, as the
"withdrawal of consent" is likely to spread to the core institutions
and practices of global capitalism, including the transnational corporation.
2001
promises to be an equally trying time for the globalist project.
*
Executive director of Focus on the Global South in Bangkok and professor
at the University of the Philippines.
