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< go back Northern Domination of the Global Economy and its Consequences for the Human Rights of Humanity: Human Rights Implications By Martin Khor, Malaysia 1. ECONOMIC TRANSNATIONALIZATION AND GLOBALIZATION Transnationalization In the half century since the end of the Second World War, the process of global economic domination by a few entities has accelerated. These entities are the transnational companies, the Northern governments that generally act in their interests, and multilateral agencies that are in turn dominated by these governments. As Frederick Clairmonte has shown, where a multinational company used to dominate the market of a single product, a big transnational company now typically produces or trades in an increasing multitude of products, services and sectors. Through mergers and acquisitions, fewer and fewer of these TNCs now control a larger and larger share of the global market, whether in commodities, manufactures, or services. In most Third World countries, transnational companies have come to play an important and an increasing role. Some governments have imposed various forms of control and regulation over these companies, but in recent years many of these governments have been competing with one another to attract these foreign firms to invest in their countries. Some of the local business elite, and many small local firms, compete with the TNCs and their products; whilst others work in collaboration with and have themselves profited from these big companies. But irrespective of an individual government's or people's attitude and desired policies towards these companies, there are now limited options for Third Word governments in determining national policies affecting different aspects of TNC behavior. This is due to recent developments such as the structural adjustment programmes as well as the recently completed Uruguay Round. In order to oil the wheels of their business machine and to get a competitive edge over rivals, TNCs routinely bribe governments. Many Southern governments are thus seen, correctly, as corrupt, and some political leaders have been known to amass up to several billion of dollars in overseas bank accounts. But the phenomenon of politicians receiving bribes is by no means restricted to the South. Recent scandals in Italy, Japan, France and Britain reveal that Northern government leaders and politicians have also been heavily corrupted by their corporations. Corporation influence over state policies seems therefore to be a universal phenomenon. Globalization This process of "transnationalization" is accompanied by another trend, the globalization of national economies. Firstly, Third World countries are more and more subject to the pulls of the world market. Secondly, crucial areas of economic policy-making once were under the domain of national governments in the South have increasingly come under the control of foreign (Northern) governments or of international financial, trade, and economic organizations controlled by Northern governments and acting in favor of transnational companies and banks. This globalization of national economic decision-making has been boosted by structural adjustment programs (SAPs) imposed by the World Bank and IMF on indebted Third World countries as a condition for debt rescheduling since the 1980s; and by the Uruguay Round agreement (under GATT auspices) that was signed in April 1994. The implementation of these agreements in future years will greatly extend and accelerate the globalization process. As this process is dominated and dictated by major industrial countries, they are able to make use of it to further subject the functions of the Southern economies to the interests of the North. 2. SOUTHERN DEPENDENCE AND SOUTH-NORHT RESOURCE OUTFLOWS In the colonial period, the colonized territories had their economies distorted to serve the requirements of the colonial master countries. The former became economically dependent on the latter and on the international market. This dependence supplanted the previous basic self-sufficiency of many of the colonized territories, and took many forms, including dependence on investment, trade, finance, and technology. In the post-colonial period, despite political independence, most Third World countries are still economically dependent (and even more so) on Northern countries, their TNCs, and institutions. Each form of dependence is associated with specific mechanisms whereby the Southern countries have substantial fund and economic resources transferred abroad. The South-to-North outflow of resources far outweigh the North-to-South "aid" (a large part of which consists of loans that have to be repaid anyway). Recent South-North outflows are very large, in fact constituting financial hemorrhage, and at present probably exceeds US$500 billion annually. These outflows arise from the South's adverse position in international structures of trade, finance, technology, and distribution. The following summarizes the mechanisms and magnitude of dependence and resource outflows: (a) International Trade and Terms of Trade Many Southern countries sill mainly export raw materials and import manufactures. Their terms of trade have declined on a continuous trend for decades. The latest years have been disastrous. Between 1980 and 1992, the index of non-fuel commodity prices fell from 171 to 115, whilst that of manufactures rose from 116 to 164. The terms of trade of commodities vis-à-vis manufactures fell from 147 to 71, or by an incredible 52%. The effects on lost export earnings and incomes are devastating. For Sub-Sahara Africa, already the poorest region, the terms of trade (using 1980 as base year) dropped by 28% between 1980 to 1989. This caused an income loss of US$16 billion in 1989 alone, or equivalent to 901% of the region's combined GDP. In the four years 1986-89, the region suffered a total $55.9 billion income losses due to terms-of-trade decline, or 15-16 percent of GDP. For another category, 15 middle-income highly indebted countries, the terms of trade also fell by 28% between 1980 and 1989, causing an income loss of $45 billion in 1989 alone, equivalent to 5.6% of combined GDP. In 1981-89 the total income loss from terms-of-trade decline was $247.3 billion. There were also other kinds of net financial transfers from these 15 countries arising from investments, debt repayment, and aid flows, amounting to $35 billion in 1989. Thus, combined with the $45 billion lost the same year due to terms of trade decline, the 15 countries lost $80 billion that year, or 10% of the GDP. The terms-of-trade income losses from Sub-Africa Africa and the 15 indebted middle-income countries were together $61 billion in 1989. For the South as a whole, the losses would be much greater, if account is taken of the other countries, as well as if a base year earlier than 1980 were to be taken (since real commodity prices have been falling since the 1950s). According to Augustin Papic, a member of the South Commission, transfers from the South due to terms of trade losses total $200 billion a year. (b) External Debt and Debt Servicing External debt has been another major source of financial drain from the South. The inability of many Southern countries to meet their debt obligations is due to many factors. Undoubtedly, domestic factors played an important role, including the proliferation of economically unfeasible and socially inappropriate projects, financial mismanagement, and corruption of political leaders. The problem was however also largely induced by international factors beyond the control of the indebted countries, including the deterioration of commodity prices and terms of trade (with such devastating effects as we have seen), the increase in interest rates in the 1980s, and changes in relative currency rates. Thus, most Southern indebted countries were victims of an "unfavorable external economic environment" which in many cases turned what would have been a problem into a crisis. Debt servicing of capital-importing, developing countries, rose form $90 billion in 1980 to $158 billion in 1992. In 1980-92, total debt servicing was $1,662 billion (comprising $771 billion in interest payment and $891 billion in principal repayment). Despite these astronomical repayment amounts, the South has not cleared its debts. Instead, the countries concerned ended up with still more debt. Their total external debt rose from $567 billion in 1980 to $1,066 billion in 1986 to $1,419 billion in 1992. The tragic scenario can be gauged from the following. In 1980 the capital-importing developing countries had $567 billion in debt. Over the next 12 years they borrowed another $1,743 billion, but much of this was used to meet debt service obligations (as debt service flows totalled $1,662 billion). As a result, the countries had an even much larger debt stock of $1,419 billion, which will require even larger debt servicing outflows in the future. It would appear that the more you borrow the more you have to repay, and in order to repay you have to borrow more. Caught in this vicious cycle, the South has already paid for its yet still has heavier debts to clear. The effects have been devastating, as countries have to divert such a large part of their government budgets and national incomes to debt serving, and are thus deprived of the means to fulfill their basic needs. Moreover, the need for debt rescheduling (to avoid default) puts the indebted countries in a vulnerable position of having to accept conditions (particularly structural adjustment policies) attached to the World Bank's new loans. (c) Payment for trade, transport and distribution TNCs dominate international transport and distribution of goods and derive an overwhelming share of the final price of the products. Since freight charges are high, Southern countries forgo a substantial part of their export earnings. Southern producers receive only 10-15 per cent of the final retail price of their commodities when sold to Northern consumers. The South has weak capacity in shipping, insurance, and marketing, and thus payment abroad for these services is a big drain on foreign exchange and income. (d) Outflows of foreign profits The inflow of foreign investment is usually considered a source of capital to the South. However it can also be a major source of outflows through the repatriation of foreign firms' profits and dividends. Profit outflow may eventually be more (an even much more) than new investment inflows. In 1980-92, the net outflow of profits and dividends by foreign firms totaled $122 billion and averaged $9-11 billion annually. In 1980-86 profit outflow exceeded new investments by $15.5 billion. However, due to an increase in foreign investment to a relatively few developing countries, in 1987-92 investments exceeded profits by $48 billion. The increased foreign investment inflow (especially since 1991) will however eventually lead to a corresponding rise in the annual stream of profit outflow. There are also "hidden" forms of profit outflow that are not captured in these statistics. Many foreign firms practice "transfer pricing" to escape tax of (in the case of joint ventures with local firms) to reduce the profit share accruing to the local partner. Through determination of prices, the foreign firm "overinvoices" the inputs it imports from its branches in other countries. And "underinvoices" for outputs its exports to them, thus artificially underreporting its real profits. A large part of these real profits are thus transferred to its head office or other branches. The volume of such profits is very high. An UNCTAD study estimated that drug TNCs charged their Latin American subsidiaries 33 to 314 percent above world prices for the inputs they provided. An earlier study showed Colombia subsidiaries of drug TNCs were overcharged by 155%, and the average profit rate of foreign drug firms was actually 79% and not the 6% reported. In 1986, foreign-based multinational firms reported combined net losses of $1.5 billion to the US tax authorities. However the tax authorities estimated tax losses from foreign-based multinationals to be $20-30 billion on account of transfer pricing, with another $5 billion lost from US multinationals. (e) Royalties and technical payments Dependence on foreign technology, coupled with intellectual property rights laws suited to the North, is another major source of resource outflows from the South in the form of royalties, license fees for technology used, and "technical fees" paid by a foreign firm to its overseas headquarters. Again, these forms of outflow can exceed the narrowly defined foreign profit. An UNCTAD study in 1981 estimated that payments by developing countries for using patents, licenses, trade marks, and process know-how, was $9-10 billion a year. Including other indirect costs, such as transfer pricing, the total cost of technological dependence may be $30-50 billion annually, according to the report. Since the study in the early 1980s, the outflows from the South due to technical payments and transfer pricing must have increased far above $30-50 billion annually. These payments can be expected to rise when the Uruguay Round accord on TRIPS (trade related intellectual property rights) is implemented, as Southern countries would then have to introduce or upgrade their intellectual property rights laws to the higher standards of the US. (f) Brain drain and capital flight Many Southern elites prefer to migrate to the North, or to park their wealth in the form of money or fixed assets in foreign (usually Northern) countries. These, of course, are a drain on Southern human and capital resources. A 1982 UNCTAD study found that industrial countries gained $51 billion of human capital from 1961 to 1972 due to migration of professionals from the Third World. The US, Britain, and Canada, transferred $46 billion in development aid in that period but received $51 billion of human capital due to the brain drain. Capital flight is also a massive problem. IMF data show the annual capital flight from 13 highly indebted countries was $180 billion in 1988, much higher than the $47 billion in 1981. (g) Losses from foreign exchange changes Many Third World countries have suffered massive losses due to changes in the exchange rates of major currencies. Sometimes these changes are induced by decisions of major countries acting individually or collectively. Yet developing countries are not consulted, although these decisions may have such devastating impact. A Third World country may hold its reserves (or part of it) in a certain currency. The fall in value of that currency can cause major losses to Third World countries, as when sterling fell sharply in 1993. When major currencies appreciate countries holding debt stock in these currencies will find the level of their debts (in terms of local currency) would have risen, and it would take more in terms of local currency to service the debt. This has happened recently when the sharp appreciation of the yen led to a significant increase in debt in Southeast Asian countries. Japan would not agree to renegotiate debt repayment terms despite the fact that the increase in debt stock was due solely to factors beyond the control of the developing countries. Earlier in 1994, many poor countries in Africa suffered great losses when the French franc, to which their currencies are tied, devalued. 3. THE WORLD BANK, IMF, STRUCTURAL ADJUSTMENT, AND HUMAN RIGHTS The World Bank and IMF have been used by Northern governments as instruments to maintain control of the world financial and economic system. The debt crisis was an opportunity for these institutions to impose structural adjustment programmes (SAPs) on indebted developing countries that needed debt rescheduling. Analysts like Susan George and Walden Bello have argued that the Bank and Fund used debt repayment problems as a leverage to "discipline" the South. The debt crisis weakened the South's ability to press ahead with the New International Economic Order movement, and the Northern banks, backed up by their governments and the Bretton Woods institutions, mercilessly devised ways to extract as much debt repayment (with interest) as possible, instead of equitably sharing the loan losses between the creditors and borrowers. Structural adjustment thus had two roles: to restructure the economies of developing countries so that they can better save foreign exchange to service their debts, and to alter the fundamental macroeconomic and eventually social policies of countries of the South into a single "monocultural" laissez-faire economic model that would be compatible with the long-term requirements of the Northern-dominated world economy. The advent of the SAP approach coincided with the economic reforms of Reagan and Thatcher in the US and the UK, that included deregulation, privatization, cutting welfare and social expenditures, tax reductions for the rich and businesses, a rolling back of the principle of state responsibility in providing for the needs and welfare of citizens. Financial stability (and minimizing inflation) took precedence over providing employment in macroeconomic priority setting. Structural adjustment was the mechanism for transferring the Reagan-Thatcher economic model (which has had such damaging effect on the poorer and middle-class sections of the US and UK populations) to the South. SAPs forced Southern governments to reduce the role of the state in the economy and in social services, to cut public spending (especially in the so-called "non-productive" social sectors such as health and education and for food subsidies), to retrench public-sector staff, impose a freeze on wages and free prices from controls, to deregulate, and to liberalize externally (emphasize exports rather than productive for the local market, reduce import tariffs, and liberalize the terms of foreign investment). Many countries undergoing SAPs have suffered a drastic decline in incomes, on average by 15% in most of Latin America, and 30% in sub-Sahara Africa during the 1980s. Investment per capita fell 75% in Africa and 40% in Latin America during the 1980s, whilst in the 42 poorest countries, health spending fell by over 50%, and education spending by 25%. Infant and child mortality rates rose in many countries. During the 1980s, the number of the absolute poor increased in developing countries as a whole and in Africa they also increased relative to the total population. A brilliant analysis of the effects of SAPs has been made by the Canadian economist Michel Chossudovsky, who has conducted case studies on the impact of SAPs in many countries and who is one of the world's leading economic experts on SAPs. He concluded: Structural adjustment is conducive to a form of 'economic genocide' which is carried out through the deliberate manipulation of market forces. When compared to genocide in various periods of colonial history, its impact is devastating. Structural adjustment programmes directly affect the livelihood of more than four billion people.The implications of SAPs for human rights has been studied in detail in another outstanding report prepared for the UN by the Commission on Human Rights Special Rapporteur, Danilo Turk. He notes that all states posses varying degrees of legal obligations to fulfil economic, social, and cultural rights. These rights are interdependent with and are as legal in nature as civil and political rights. He adds: "The increasing integration and internationalization of the global economy, as well as political and social structures and processes, increase the importance of international cooperation and responsibility. Never before have the actions of State X had as much real or potential impact upon State Y than at present. This obvious yet underemphasized fact, and in particular the relevance thereof to the realization of economic, social, and cultural rights within the human rights framework, must be consistently addressed." Turk's report provides details on how SAPs have led to the denial of development, and on the negative impact of adjustment on the realization and enjoyment of selected economic, social and cultural rights. In particular, the report records how harm is done to the realization of:
4. THE URUGUAY ROUND AND GATT/WTO The conclusion of the Uruguay Round (UR) was heralded in the mainstream global media as a major triumph of the international economy and a boon for all countries. It is clear however that results are at best mixed for some developing countries and for many others (especially the poorer countries) the UR is likely to have an overall negative effect that will further drain their economic resources. For all Southern countries, the round will also foreclose a wide range of development options. In a sense, the UR complements what SAPs are achieving. The round will lead to a very significant external liberalization of many sectors and facets of the domestic economy of all the developing country members of GATT and its successor, the World Trade Organization (WTO). SAPs affect about 80 indebted developing countries facing repayment problems. Should some of these countries get out of debt crisis and no longer require SAP loans, or should there be a change of government or government policies, the SAP policies can be changed or reversed. However, once a country's government signs the UR agreement and enters the WTO, that country is obliged to follow the WTO rules. These rules will severely restrict or constrain the possible policy options in many areas. Non-compliance of the rules can bring about heavy penalties and punishment, including retaliation through measures affecting trade and other activities. At the extreme, non-compliance can also lead to expulsion, and thus the threat of discrimination or trade boycott from other countries. It would be very difficult, if not impossible, for a Third World government to change the GATT/WTO rules, or to escape from compliance of obligations. The disciplines of GATT/WTO are legally binding on present and future governments. Once the WTO agreements come into force, it would thus be difficult for a present government to change its basic structural economic policies relating to foreign trade, investment, sectoral policies in services and agriculture, or technology policy (vis-à-vis intellectual property rights) and for a present opposition party with a different economic platform to implement such a programme (should it come to power) if this were to contradict the WTO rules. An alternative would of course be to opt out of the multilateral system, but few present governments or political leaders have the strength or courage to think along these lines. The round is expected to bring some benefits to those developing countries able to take advantage of certain changes. A lowering of Northern countries' industrial tariffs may benefit those Southern countries with a manufacturing export capacity. The planned phasing out of the multifibre arrangement will have positive effects on textile-exporting Southern countries. And the reduction of agricultural subsidies would improve the market access of those Southern countries that export agricultural products. These benefits will mainly accrue to the better-off developing countries that already have an export capacity. The weaker countries (and especially the least developed countries) would not be able to benefit, or to benefit much, from these. The benefits will also take a long time (10 to 20 years) to come on stream, and the rate of benefits fall significantly short of what had been requested by the developing countries. In exchange for these, the South as a whole has had to make major concessions, especially in agreeing to bring in the new issues of services, investment measures, and intellectual property rights, into the GATT/WTO system. For particular groups of Southern countries, the UR will also result in specific problems. For instance, the agriculture agreement could have severe negative effects on many Third World countries. Most of them (excepting the least developed countries) will also have to reduce domestic subsidies to farmers and reduce tariffs on imported food. Many farmers will have to compete with cheaper imports and may not survive. Agricultural liberalization will also raise world food prices, which may benefit food exporters, but about 100 Third World food importers will face a higher food import bill and are likely to be among the biggest UR losers. The UR also for the first time brought services into GATT, and liberalization of services will be an important part of the WTO's agenda. In many Third World countries, the services sector is relatively shielded and local enterprises in banking, insurance, trade, the media, and professional services have been able to develop. It is feared that with liberalization, the Northern TNCs involved in services will make further inroads and eventually dominate the sector. The South's collective loss was most acutely felt in the agreement on TRIPS (trade related intellectual property rights) through which countries are obliged to introduce IPR (intellectual property rights) legislation similar to Northern standards. This will hinder Southern countries' indigenous technological development (we should note that the present industrial countries did not have patent or IPR laws, or laws as strict as will now be imposed through TRIPs, during their industrializing period, and this enabled them to incorporate technology design originating from abroad in their local systems) and give rise to increasing technical payments such as royalties and license fees to TNCs owning most of the world's patents. Most Third World countries have exempted agriculture, medicines, and other essential products and processes from their national patent laws, but with the passage of TRIPs, everything is subject to IPRs unless explicitly exempted. The prices of medicines are expected to shoot up in many countries, and foreign drug sales will increase rapidly at the expense of local products. In the area of TRIMs (investment measures), the most important point is that national polices relating to foreign investments have also now begun to come under the ambit of the GATT/WTO system. Originally the Northern countries proposed that foreign companies be given an automatic "right to establishment" or "commercial presence". This would have given rights to foreign companies that were attained by the colonizers through war and bloodshed in the colonial era. Eventually the objections of some developing countries prevailed. However the principle of "national treatment" (to treat foreigners no less favorable than locals) will progressively be applied to foreign firms that are established in developing countries. "Investment measures" such as local content (obliging foreign firms to use at least a specified minimal amount of local inputs) or policies that discriminate positively in favor of local enterprises, will be phased out. This of course has serious enough implications in terms of a probable increase in foreign control of the national economy. And once the TRIMs are firmly set up within the WTO framework, the Northern countries will no doubt attempt to increase further the rights of TNCs, for instance by insisting again on the "right to establishment". And what was not attained in the UR may be sought to be attained through regional agreements, for example APEC and NAFTA (and its future extension in South America). The implications of GATT/WTO for human rights has been studied by Gurdial Singh Nijar in a recent paper. He argues that the GATT treaty impairs a crucial facet of human rights, i.e., the sovereign right of a Third World state and its people to decide upon and pursue policies consistent with its stage of development. "The Right to Development," adopted by the UN General Assembly in 1986, embraces the right of peoples to freely "develop their political status and to pursue their economic, social, and cultural developments and their right to 'full and complete sovereignty over all their wealth and natural resources.' Moreover, all efforts at the international level to promote and protect human rights and fundamental freedoms should be accompanied by efforts to establish a new international economic order." Nijar's paper also argues that the agriculture treaty threatens national food security (and thus impairs the right to food) and that the TRIPs agreement, by opening the door to patenting of life-form (including genetic materials of crops developed by Third World farmers and of medicinal plants used by Indigenous Peoples), violates the economic and cultural rights of Third World communities. If the UR has gloomy implications, the post-UR scenario will be even gloomier unless Third World peoples and policy-makers make an effort to fight back in the future WTO negotiations. Northern government plans to link trade (including trade measures and sanctions) to the environment and labor standards, in a manner that is likely to be inequitable, and thus harmful to the South, are already well advanced. There will also likely be attempts to link even more issues to trade measures, possibly including "trade-related women's rights," "trade-related judicial systems," etc.. The linking of issues to the possibility of sanctions under the clever device of attaching a "trade related" prefix to the chosen topics has been successfully used in injecting services, IPRs, and investments into GATT/WTO. This device is very likely to be used in future efforts either to further liberalize Third World economies or to reduce their competitiveness in the scramble for world market shares. The aim also is to use the GATT instrument to ship a great portion of the burden of future global economic adjustment (for instance, because of environmental imperatives) to the South, which presently has a weak voice in the GATT/WTO negotiating forum. Indeed it is precisely because the South is so weak in the GATT/WTO arena, coupled with the fact that GATT/WTO carries the power of "bite' in the form of trade retaliation mechanisms, that this institution has been chosen as a vehicle to institute reforms favorable to the North. It is imperative that people's organisations and political leaders in the South realize the dangers and seriously organise among themselves to match the negotiating capacities of the North. Otherwise, as in the Uruguay Round, our participation in the decisions of the WTO may be limited, as it was in the Uruguay Round, during which one Third World Ambassador likened the South to the chicken that was given this choice by the chef: "With which sauce would you like to be eaten?" 5. SOCIAL AND ECONOMIC RIGHTS AT THE NATIONAL LEVEL The international economic situation is a major source of most development problems faced by people in many countries of the South, and international factors have become and will become increasingly more important due to the processes of globalization and transnationalization. Insofar as the social and economic rights of people in the South are adversely affected by these international factors, and specifically by Northern-controlled institutions, there must be a clearer articulation of the role these institutions play in the violation of the human rights of Southern peoples, and more effective joint actions to fight against these violations. However, in the realm of social and economic rights, it is also crucial to examine and to fight against the domestic sources of rights violations. The right to development incorporates the right of all individuals to have their basic needs fulfilled, to participate in decisions which determine the development process and to enjoy a fair and equitable share of the fruits of development. A Working Group of the UN Commission on Human Rights in 1982 stressed that: "The realization of the right to development requires, at the national level, the full exercise of the fundamental rights and freedoms of individuals, as well as the granting of equality of opportunity for all in the access to basic resources and services. This requires in particular the participation of all in the process of taking decisions that concern them and in the implementation of these decisions. It is important to encourage local development initiatives and to permit equitable distribution of the resources and advantages resulting from development." It is true that international factors such as commodity price declines and structural adjustment-induced cuts in social spending and increased unemployment have given rise to a situation where national governments, even if they wanted to, are limited in their ability to realize the right of development for their people. However, it is equally if not even more true that many Third World governments and elites (including political, business, and professional elites) have themselves contributed to and compounded the problems arising form international factors. The distribution of wealth and incomes in most Third World countries are extremely unequal. Some governments have seriously tried to redress this by measures such as land reform, credit for the poor, provision of basic facilities, welfare aid, and social services. These efforts have of course been hampered by recession and structural adjustment. However many countries with a poor development record have been characterized by political dictatorship, the channeling of state funds to the private accounts of political leaders, gross financial mismanagement, and the introduction of ill - fated luxury projects that added fuel to the debt problem. In many countries, the political leaders and local business elites have been under the influence of the TNCs and foreign aid agencies and foreign governments (especially during the Cold War period), and have helped them in facilitating the dependence of the country, and the resulting heavy outflow of resources. Instead of development lifting up the poor, many development projects mainly benefit the business community and the better-off sections of society. The poor and ordinary people are asked and usually forced to make way for these projects. Farmers are evicted from the land, small fisherfolk's seas are invaded by trawlers and polluted by industries, forest peoples are suffering from the logging of their forests and pollution of their water supplies, and workers in plantations, mines, and some factories are paid miserable and exploitative wages and work under intolerable conditions. Consumers are asked to pay higher prices for their products because monopolies (often owned by powerful political figures, or businessmen who contribute to the private or party funds of influential politicians) are able to charge higher and higher rates. It is also clear that in such circumstances and in such countries, the right to development will not be bestowed by the elite on the rest of society, but the victims of this inequitable development process have to organise themselves and fight for the realization of their rights. Often, avenues are closed, as state laws are used by the elite to suppress legitimate dissent or expression of views. The suppression of civil and political rights (such as the right to free speech and association), through internal security laws (including torture, mass shootings, "disappearances") are used to support the suppression of social and economic rights, in order to maintain an economic model that benefits the elite. In countries suffering from political and military dictatorship, it is understandable that ordinary people focus on their democratic and civil rights, for these rights form a large part of the basis for their capacity to organize to defend their social and economic rights. On the other hand, it is also true that internationally-imposed economic policies (for example via structural adjustment) have forced many governments, some against their natural will, to impose stringent economic measures that give rise to political unrest and explosions. Despite these popular protests, the government may not have the choice (even if so desired) or the ability to change its policies, as these are imposed externally as condition for avoiding what may be an even worse situation (for example, a debt default, leading to the threat of trade boycott). Ultimately, the state may take measures that increase the suppression of civil and political rights. Thus, social-economic and civil-political rights are inextricably lined. The provision of civil rights alone, without appropriate socio-economic policies, would lead to a violation of the right to development and of the right to food, employment, and health. The ordinary citizen may then demand bread (or rice) with his democracy. On the other hand, a respect for the right to development (and for social and economic rights) would also imply the adherence to the right of disadvantaged groups to participate, and to organize for their interests, and this of course requires and adherence to the conditions for exercise of civil and political rights. 6. SOME IMPLICATIONS The large financial and economic outflows have greatly depleted much needed resources which could have been used by the countries of the South for domestic investment and development of basic facilities. Most of these outflows result from the preservation (even strengthening) of international economic structures that have consolidated the domination of transnational companies and banks. The efforts of the South to redress these structural imbalances have met with resistance from the Northern governments that are intent on preserving the control of their companies. Thus, the efforts to establish a "new international economic order" were beaten back. As long as these structural imbalances remain, or even worsen, there will exist a very major impediment to the capacity of the Southern countries to develop. Thus will also prevail a most unjust situation, where much needed resources are transferred from the poorer countries to the richer ones. In the environmental sphere, NGOs and policy makers are correctly paying attention to the "transboundary" or cross-boundary environmental effects of activities, such as when the air pollutants originating from one country affects neighboring countries. It is of course unfair when a country has to suffer environmental problems caused by another, and this injustice is now recognized, and conferences, laws and measures and being formulated to deal with these issues. In the economic sphere, there are even more cases of transboundary economic and development effects, of activities or decisions taken in one country affecting the economic and social welfare of other countries. For instance, changes in exchange rates engineered in one country or by a grouping such as the G7 major countries, may seriously result in losses in poor countries. Yet at present the Northern countries that hold the advantage have refused to consider reforms to the basic structures of the inequitable world economic order, and in fact have taken major initiatives to further dominate that order. Transboundary human rights violations are also evident through the practice of double standards by transnational companies, not only in the economic sphere (through transfer pricing, etc.), but also in the dumping of toxic wastes in the South, and in the sale and unethical sale promotion of sub-standard, dangerous or inappropriate consumer products (such as tobacco, medicines already banned or severely restricted in the North, and baby milk), producer inputs (such as toxic pesticides and other chemicals), and technologies and industries (as had caused the Bhopal tragedy). Insofar as the South's social and economic rights are affected by decisions emanating from the North (and from their TNCs), then the violation by powerful countries of the human rights of other countries should be a major area of focus. Yet the tables, indices, and comparisons of human rights records invariably portray the rich countries as superior upholders of human rights, whilst developing countries pale as violators. There is no denying that in many countries in the South, the human rights situation is atrocious, in terms of both civil and political rights as well as in social-economic rights. However it is also true that the wealth in the Northern countries is to a large extent built on the depletion and transfer of Southern resources (economic as well as physical). This wealth is also a major source of the relative political stability and civil freedoms, as long as they do not threaten the basic system built on privilege, inequities, and wealth. Insofar as wealth facilitates the enjoyment of greater economic and civil rights, and as this wealth is significantly generated (through the mediation of TNCs and the supporting international economic structures from the colonial to the present periods) by exploiting the South's resources, then it could be said that to some extent the better enjoyment of human rights in the North is premised on the exploitation of the human rights of the South. More focus should also be placed on the transboundary human rights effects of decisions taken in powerful countries but affecting the lives and livelihoods of people in other countries. It is thus imperative that peoples and governments of the South increase the fight for a fairer world economic order, and for the realization at international level for social and economic rights of Third World people. However, it is equally important that the need for international reform is not used as an excuse to curb the legitimate rights of citizens in the South in their efforts to improve their own well-being, and to defend their livelihood and economic interests from the forces of modernization, commerce, or greed. The need for national-level reforms to give the disadvantaged groups a socially just share of national wealth and resources must be recognised side by side with the need for reforming inequitable international economic structures, institutions, and processes. Indeed, when the house is in order domestically, there is a better basis and capacity to fight for reforms internationally. > Click here to go to the next page. |
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