Address by COSATU General Secretary, Zwelinzima Vavi, To Fix it or Nix it at Nasrec 30 August, 2002

 

To Fix it or Nix it: Engaging the Global Institutions from the Perspective of Labour:
Input by Zwelinzima Vavi - COSATU General Secretary at the ANC Workshop, Global People's Forum, NASREC, 30 August 2002

1. The conditions giving rise to this polarised debate are not mysterious but reflect growing dissatisfaction with the current world order and its institutions. Across the divide of the 'fix and nix' there is a common disaffection with the current world order.

2. The salesmen of globalisation want all of us to believe that it has opened a vista of unending prosperity and the new world order, proclaimed after the collapse of the Soviet bloc heralded an era of cooperation among states and the end of geo-political contestation that characterized the cold war. Reality is far much more complex that the simple picture painted by the salesmen of globalisation.

3. To a growing number of the world citizens, in particular from the developing nations, globalisation has become synonymous with the most negative issues rather than the positives.

4. The survey conducted by UNICEF and the UNDP on social spending in Africa reveals that only three countries in Africa are allocating more that 20% of budget funds for use on basic health care, education, and nutrition - a target set by the 1995 UN Social Summit in Copenhagen. According to Kofi Annan, the Secretary General of the UN, 44% of Africans - and 51% of these in Sub-Saharan Africa live in absolute poverty.

5. At the same time Africa's debt stock has increased from $344 billion to $350 billion in 1998, and is equivalent to more than 300% of exports of goods and services from Africa. Again to quote Kofi Annan African household today consumes 20% less than it did 25 years ago. Economic growth rates in the African continent continue to decline, as well as development assistance, which has dropped from $23 billion in 1992 to $18,7 billion in 1997.

6. On the other hand, according to the UNDP report, Americans spend more than $8 billion a year on cosmetics - $2 billion more that the estimated annual total needed to provide basic education for everyone in the world. In 1996 alone Ethiopia had a total foreign debt of $10 billion, whilst in the same year Europe spent $11 billion on ice cream alone! The three richest people in the world have assets that exceed the combined gross domestic product of the 48 least developed countries.

7. At the end of 1997 nearly 31 million people were living with HIV, up from 22,3 million the year before. With 16 000 new infections a day - 90% in developing countries - it is now estimated that 40 million people will be living with HIV in 2000.

8. Closer to home, unemployment in South Africa is now almost 30%. According to the ILO, that is more than twice as high as most other middle-income countries. This, in turn means we face worse poverty than other middle-income countries.

9. Thus, amongst the 93 developing countries that the UNDP reports on, South Africa ranks 9th in terms of GDP - but only around 25th in terms of access to clean water, it is the 40th worst for malnutrition, and third from the bottom in terms of income distribution. In the language of the day, this degree of inequality and hardship is entirely unsustainable in economic as well as human terms.

10. No wonder some citizens of the world are shouting slogans such as "down with globalisation!" There is no doubt that globalisation has not worked for the working class and the poor! For the developing nations, it is the globalisation of poverty and curable diseases that comes first in their minds when the word globalisation is mentioned.

11. The rich have reaped a disproportionate share of the fruits of globalisation. Human society has developed the technology, capabilities and production system that make it possible to resolve the basic problems of poverty, homelessness, hunger and disease, yet by virtue of the unequal ownership of economic resources, we are no nearer to resolve these questions.

12. Undoubtedly, globalisation is a reality that we must all engage - the key question is on whose terms and what is the basis of such integration into the world economy. From the recent past it has become apparent that the fruits of globalisation are unevenly distributed and that poverty and inequality have worsened between and within states.

13. Global institutions such as the IMF, World Bank and the WTO act consistently in the interest of capital at the expense of developing countries and the poor. They have also proven incapable of managing the global society. One of the tragic ironies of our times is that a global society has emerged, but there is no global governance to match the evolution of that global society. Under these conditions, transnational capital, especially finance capital, is poorly regulated and acts with impunity to wreak havoc on the economies of developing countries.

14. The IMF and the World Bank only act after the fact, again in favour of the agenda of capital. They now have a narrow mandate: force developing countries to service their external debt by imposing stringent conditionalities that further worsen the debt facing poor nations. Even more they serve as the ideological instruments of the agenda of capital by imposing a one-size-fits all economic trajectory, typically in favour of the markets and cutting back the role of the state in the economy. Others may argue that there has been a change of heart - that however, boils down to fine-tuning old conditionalities.

15. Emergence of a rules-based trading system had created the hope that for the first time developing countries will have a fair deal. As it turned out, developed countries have used their might to use the WTO to force developing countries to open their markets, as they progressively insulate their own markets from goods from developing countries by raising tariffs, especially for manufactured products; subsiding agricultural products; and using non-trade barriers to further bar goods from developing countries.

16. Developing countries are having a raw deal! Not only are they facing unfair terms of trade but also having to compete with commodities from developing countries. Prices for their commodities have declined substantially and foreign exchange thus earned is diverted towards servicing the external debt. Unless something radical happens, developing countries are consigned to be suppliers of raw materials. As such they face this conundrum: export what you do not consume and consume what you do not produce. This pernicious cycle of dependence will not end until and unless the rules of the 'new world order' are changed.

17. Uneven development, lack of a just international system, the dominance of capital's agenda in geo-politics and economy, all combine to feed into the disillusion about global institutions and the global economy. It is within this context that we should focus on the fix-it-or nix-it debate. The social mobilisation against globalisation is an expression of people's dissatisfaction with the current world order.

18. As the labour movement we believe that although capital is dominant, its power over society is however not complete. Put in another form, the balance of power may be in favour of capital but there are new openings that the democratic movement has to exploit. This includes:

• · The world economic crisis and the legitimacy crisis of neo-liberalism. Whereas the beginning of the 90s was characterized by complete arrogance and triumphalism within the capitalist camp, that confidence has given way to uncertainty and a paradigm crisis for the capitalist camp. The 1997 economic crisis and subsequent events led to the all-round questioning of the neo-liberal discourse.
• · The capitalist camp or the unipolar world is not as homogenous as it appears. While the US is the dominant super-power it lacks a clear vision on how to unite the entire camp and acts consistently in its own interest. As such there is a leadership vacuum and the remaining superpower is clueless on how to run the global society and economy. The EU and Japan are also challenging US dominance. China's potential to tilt the scale of power should not be underestimated.
• · Developing nations, evidenced in the WTO Doha meeting are beginning to assert themselves, albeit with internal contradictions. In the long run, developing nations may be a potential ally in the struggle to transform the current world order.
• · Resurgence of the social movement provides a new platform to forge broader alliances for international justice and involve the masses of our people in the struggle for social and economic justice.

11. Underlying the argument that is being advanced here is that we are not powerless victims of globalisation. Through our actions and struggles we can tilt the balance of forces in favour of a more just world over. Of necessity this will be a protracted, difficult but necessary struggle to engage. As the democratic movement our power lies in our people and democratic states where we have managed to attain elements of power.

12. Basically, the objective should be to open spaces for diverse approaches to economic and social development against the tyranny of market fundamentalism. In other words, we need to defend the sovereignty of the nation-state to fashion their own developmental agenda dictated by the needs of their people. Further, this means defending the state by defending and transforming the public sector. Our struggles as the labour movement against privatisation and conservative macroeconomic policies are essentially about empowering the state to play its developmental role.

13. In the long run, humanity's problem can be resolved only by a system that is rational, just and not based by exploitation of man-by man, namely socialism. As long as private ownership of the means of production exists, poverty and inequality will persist - only few will benefit from the revolutionisation of the productive forces

14. But does that mean we should do nothing until a more just world order emerges? The answer is an emphatic no, fatalism is acceptance of defeat. Within the current system we can argue for more progressive economic policies that redistribute resources to the poor; discipline capital and harness the energies of the people for a people-centered-people-driven development discourse.

15. It is within this context that the labour movement believes that in the short run we need a struggle to fundamentally transform the global institutions and to mitigate the negative effects of globalisation. As such we require a minimum platform that builds consensus on the required reforms in the global and national system as a basis to move beyond the dichotomy: fix it or nix it. Consensus among the democratic forces can be built around:

• · Measures to control financial speculation, which may include a tax on transactions and capital controls to discourage capital flight;
• · Environment and labour standards to ensure global minimum basic conditions as a means to curb the race to the bottom by developing countries. In this, regard, ensure decent jobs as the main solution to poverty.
• · Changing the international trade rule around, for example, intellectual property, and measures to ensure wider market access for goods from developing countries to the developed markets. In that context, argue for asymmetrical application of trade liberalisation in favour of developing countries for strategic industrial policy. This means that developing countries should not be forced to liberalise their trade and be given scope to nurture domestic industries.
• · Defending the sovereignty of the state to determine economic policy and in that regard defend the public sector as a key lever to foster development and provide basic services.
• · Measures to improve social protection including basic services, social security, and access to income generating assets.
• · Measures to improve the accountability of international financial institutions such as the World Bank and the IMF.
• · Ensuring democratic political institutions that allow for popular participation decision-making and accountability of public institutions.

16. The above measures constitute the basic agenda driven by the labour movement in its engagement with international institutions and national governments. The International Confederation of Free Trade Unions (ICFTU) drives this agenda in its engagement with international institutions. In this regard the ICFTU itself is a site of struggle.

17. The questions arises on how do we build a progressive bloc to advance these struggles? In South Africa we have inconsistently used the advantage of a popular government and revolutionary alliance to drive through a progressive international platform.

18. The growth both in militancy and in numbers of social movements lacks international leadership that will knit it together into a coherent international force to tilt the balance in favour of the progressive forces. The progressive political parties and the progressive social movement have so far dismally failed to coordinate their struggles.

19. The current situation where there is a degree of competition amongst this forces only helps to sustain the dominance of the world affairs by capital and its cronies. Our challenge is to use this conference to begin a debate about how the power of the people can be harnessed and mobilised.

Home |  Policy |  Affiliates | Publications |  Site Utilities |  Structures |  News |  Labour Links  
© COSATU