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POL540 EXAM NOTES Week 7: The Global Debt Crisis, Neo-Liberal Reforms and their Consequences The Debt Crisis  At the end of 2004, the foreign debt of all developing and emerging market economies was more than $2.7 trillion.  That represented almost 40 percent of their aggregate GDP and exceeded the total value of their exports.  Much of the ballooning LDC debt burden can be attributed to borrowing by commodity exporters.  The so-called Third World debt crisis of the 1980s accompanied a sharp fall in world commodity prices.  Loans were required to compensate for losses resulting from a deterioration in the terms of trade, a problem that did not affect LDC exporters of manufactured goods. Origins of Debt  The roots run back to 1973-1974 when oil prices soared triggering an unprecedented expansion in international lending mainly commercial lending or recycled Petro Dollars.  The 1973 and 1979 oil crises saw sharp increases in oil prices. Oil importing countries ran up huge import bills, and, in turn, oil-exporting countries had a huge build-up of deposits in international banking systems.  The debt crisis of the late 1970s and early 1980s sparked the widespread use of neo-liberal policies promoted by the International Monetary Fund (IMF) and the World Bank  The situation is especially bad in Latin America, where debt payments have accounted for 40 to 50 percent of the region’s exports.  In August 1982 the international debt crisis was sparked when Mexico failed to pay its debt. A larger debtor suspended payments.  The immediate causes were widespread economic slowdown, and sharp increase in international interest rates, resulting from contraction in many countries belonging to organization for Economic Cooperation and development (OECD).  In August 1982, the debt crisis was recognized, when Mexico announced a moratorium on its foreign loan repayments, followed shortly by similar announcements by Brazil and other countries unable to meet servicing deadlines. — Interest rates shot up; — Global demand for exports from developing countries fell; — The Deep recession of 1980-81 made it impossible for developing countries to generate sufficient income to pay back their loans on schedule. From Hope to Despair  Since independence, the developing countries have seen foreign borrowing, and the consequent debt evolve from 1. The decade of opportunity, hope and promise development in the 1960s 2. The decade of o the mounting burden in the 1970s, 3. The decade of debt crisis in the early 1980s, 4. The continuing problems requiring debt management in the 1990s and in the new millennium  Defaulting on loan payments was thought to be the fault of the debtor countries, resulting from corrupt and overly bureaucratic governments rather than an uncontrollable economic climate Structural Adjustment Programs (SAPs)  Most indebted countries, sought to reschedule their loans in consultation with the World Bank and the IMF.  The policy response of these International Financial Institutions (IFIs)was in the form of structural adjustment programs (SAPs) and Structural Adjustment Loans (SALs)  SAPs aimed to maximize the prospects for, and amounts of repayments by debtor countries, with little thought for the national repercussions of these repayments for heavily indebted nations  The essence of SAPs is to reshape the economies of developing countries in favor of the free-market, reducing overall 1 government intervention in the economy. Page  Structural adjustment in practice means that loans are granted, but with conditions of structural economic reforms attached.  The overall aim of adjustment programs is to reduce the balance-of-payments deficit by increasing exports and reducing imports in conjunction with economic restructuring to allow new growth  It is based firmly on free-market principles – deflation, devaluation, decontrol and privatization. Two main types of measures were implemented. Two Phases of the Reforms (SAPs) 1) Short-term stabilization measures are implemented usually associated with the IMF.  These are designed to stop economic conditions from deteriorating further, such as public sector wage freezes, reduced government subsidies and currency devaluation.  These acts as short, sharp shocks to the economy; they often result in recession but they are aimed at curing most important economic problems. 2) Stabilization is followed by long-term adjustment measures aimed at improving economic efficiency by changing the structures within which transactions take place; they are associated mainly with the World Bank.  Such measures include export, downsizing the civil service, economic liberalization, privatization and reductions in taxes.  The SAPs were refined to take into account social development, as well as economic needs, and, after three-four years, were followed by economic recovery programmers (ERPs) in later periods  Removing restrictions on foreign investment in industry and financial services to make the local production of goods and delivery of services more efficient, owing to the presence of foreign competition;  Devaluating the local currency relative to hard currencies like the dollar in order to make exports more competitive, and  Privatizing state enterprises and embarking on radical deregulation in order to promote allocation of resources by the market instead of by the government. State Intervention  Basically, the arguments in fervor of extensive state interventions have centered around the fundamental economic structures of developing societies, their undeveloped markets and the absence of a sufficiently strong entrepreneurial class.  There are main arguments in support of different types of state intervention. At least five types of state interventions may be identified:  Procurement of general judicial and institutional preconditions for production and exchanging of commodities and services, including a legal framework for enforcing property rights, contracts, including a legal framework for enforcing property rights, contracts, etc.  Macro-economic policies such as fiscal, income and exchanging rate policies.  Procurement of material infrastructure including roads and railways, and provision of public services in areas like education and health.  Operational controls over private-sector companies.  The state’s direct participation in the production of goods and services. — Today, the collapse of Soviet bloc’s centrally controlled “command economy” and the poor economic performance of the remaining communist nations (expect China and Vietnam, which have largely abandoned Marxist economics) have discredited the advocates of state-dominated economies — At the same time, however, no government embraces full laissez faire (i.e., allowing market forces a totally free reign, with no government intervention). — All countries, for example, no matter how capitalistic, have laws regulating banking, domestic commerce, and international trade. Neo-liberalism and SAPs 2  Neo-liberalism draws on the Neo-classical economics of Adam Smith and modernization theory of 1950s Page  It is anti-Keynes and “Development Economics”  Overriding importance of free market and free trade  Failure of development due to state intervention  Strongly pro-capitalist (foreign investment encouraged)  Encompassed in structural adjustment programs Neo-liberalism and the South  Neo-liberals argue that the lack of development in the South is due to the incorrect development policies of governments and an overconcentration on domestic market rather the global market place.  The central proposal of neo-liberalism: 1. To permit free market to flourish 2. To privatize state-owned enterprises 3. To promote free trade and expansion 4. To welcome foreign investors from the North 5. To eliminate government regulations and protections Criticisms of Neo-liberal Reforms  Many people challenge the IMF and World Bank’s claim that SAPs will reduce poverty.  Neo-liberal policies spearheaded by these and other institutions known as the “Washington Consensus” have been imposed to ensure debt repayment and economic restructuring.  The Reagan and Thatcher Administration, embraced the Right wing policies and implemented both at home and in the developing countries by imposing through SAPs  The debt crisis provided an opportunity to integrate the economies of the Global South into a US dominated global economy  The essence of SAPs is to reshape the economies of developing countries in favor of the free-market, reducing overall government intervention in the economy  For poorer countries these impacts can be devastating: — They prescribe cut backs, “liberalization” of the economy and resource extraction/export-oriented open markets as part of their structural adjustment. — The role of the state is minimized. — Privatization is encouraged as well as reduced the protection of domestic industries. — Other adjustment policies also include currency devaluation, increased interest rates, “flexibility” of the labor market, and the elimination of subsidies such as food subsidies. — To be attractive to foreign investors various regulations and standards were reduced or removed.  Poor countries must export more in order to raise enough money to pay off their debts in a timely manner.  The high social costs for the people of the South were: — increased unemployment and political violence including civil wars — decline in real wages — reduced public and social spending - widespread deterioration in the welfare of populations — increased prices of basic commodities and foodstuffs (related to the lifting of subsidies). The impact of SAPs on Women  SAPs increased pressures on women and on all their roles – both productive and reproductive  Women increasingly have to work to supplement declining incomes, while the pressure on their domestic roles increases  They try to make ends meet by reducing household expenditures by changing diets, buying different foodstuffs and so on.  In turn, they also have to spend more time looking after the sick because of increased illness and disease The impact of SAPs on Environment 3  The final area of costs relates to the environment; Page  The main problem arises from the creation of incentives to increase the exploitation of the natural environment to generate export revenues.  As structural adjustment aims to increase agricultural crops for export, this usually involves increased use and exhaustion of mineral resources and land degradation  The agricultural sector has also been made vulnerable as a result of export-led reforms. Those who benefited from SAPs generally have been large traders and import-export merchants The impact of SAPs  These processes combined to produce widespread increases in poverty  People in urban areas have suffered more than those in rural areas  Especially, the urban poor and urban civil servants who lost their jobs or whose salaries were eroded while they had to pay more for goods and services.  The declining role of the state due the reduced income and the consequent provision of welfare to its populations Alternatives to SAPs  Given the extensive criticism of the impact of SAPs, the World Bank, and other development banks, have changed their policies to make them more socially aware and oriented towards poverty reduction  SAPs are replaced by poverty reduction strategies as part of the highly indebted poor country (HIPCs) initiative, 1996  This policy encourages individual countries to design their own strategies for poverty reduction in return for debt relief.  Some say HIPCs initiative is little different from the SAPs, with only the terminology having being changed.  If a government wants debt relief (linked with previous adjustment loans that they have problems repaying), they are now expected to draft poverty reduction strategy papers (PRSPs).  The drafts will be produced in consultation with civil society and must cover poverty issues and policies over a three year  Time frame, together with how the strategy will be budgeted.  Moreover, these PRSPs are encouraged to use participatory assessment techniques in order to discover how the poor really experience poverty  Although still in its early days, this new poverty-focused approach has already provoked criticisms – mainly on the grounds that the HIPC initiative is little different to the SAPs,  Moreover, these PRSPs are encouraged to use participatory assessment techniques in order to discover how the poor really experience poverty  Although still in its early days, this new poverty-focused approach has already provoked criticisms – mainly on the grounds that the HIPC initiative is little different from the SAPs, with only the terminology having changed. Week 8: Globalization and the Third World The concept of Globalization • Globalization is a multifaceted and multidisciplinary topic in its broadest reaches. It includes not only economic topics, but also political, social, cultural, and ideological ones • The word globalization is employed to explain the profound transformations the contemporary world and human society are undergoing in all its aspects (political, economic, cultural and technical). • The dynamics of globalization involve several of the core forces of modern social life: rationalist knowledge, capitalist production, automated technology, and bureaucratic governance. • Worldwide interconnectedness is growing in: Extensity, Intensity, Velocity and Impact. • Globalization denotes: — A shift in the scale of social organization — The emergence of the world as shared social space — Relative de-territorialization of social, economic and political activity — Relative de-nationalization of power • Globalization is marked by the emergence of global economic systems: in crease in world trade, the development of a 4 sophisticated world financial structure, the importance of TNCs and the linked internationalization of production and services Page Causal Dynamics of Globalization • Rationalist structure of Knowledge • The capitalist mode of production • Technological Innovation • Regulation The features of New Globalization include;  New market  New tools  New actors  New Rules Definition of Globalization • Definition: – An economic phenomenon? – A social phenomenon? – A cultural phenomenon?  Globalization is the movement towards the expansion of economic and social ties between countries through the spread of corporate institutions and the capitalist philosophy that leads to the shrinking of the world in economic terms. The following are among numerous definitions of globalization: • It is "a label that is presently in vogue to account for peoples, activities, norms, ideas, goods, services, and currencies that are decreasingly confined to a particular geographic space and its local and established practices" (James Rosenau, 1997) • “Globalization refers to all those processes by which the peoples of the world are incorporated into a single world society, global society” (Martin Albrow, 1990) • “The world is becoming a global shopping mall in which ideas and products are available everywhere at the same time” (R. Katner, 1995). • “Globalization is what we in the Third World have for several centuries called “colonization” (Martin Kohr, 1995). • Globalization is "time-space compression" (Harvey, 1989) • Globalization, "The integration of the world Economy" (Giplin 2001) • Globalization " De-territorialization - or ..... the growth of supra-territorial relations between people" (Scholte, 2000) • “Globalization can be defined as the intensification of worldwide social relations which link distant localities in such a way the local happenings are shaped by events occurring many miles away and vice versa (Anthony Giddens, 1990). Introducing Globalization A fundamental shift or transformation in the spatial scale of human social organization that links distant communities and expands the reach of power relations across regions and continents • Not the same as internationalization • Not the same as regionalization • Globalization is the opposite of localization, global is the opposite of local and even national. Definitions of Globalization • In general terms globalization is an economic, political, technological, and socio-cultural process where the importance of state boundaries decreases and the countries and their people live in an integrated global system. • The term has become particularly popular in IPE and in cultural studies. • For Americans globalization means trade although the two-ways trade in goods and service represents less than 30% of USA economy. 5 • Globalization is boundary broadening. The term global is used to show interconnectedness global governance, global environmental change, global gender relations, global political economy, and more Page • Globalization is the opposite of localization, global is the opposite of local and even national Dimensions of Globalization • Three main dimensions of globalization: i. Economic Dimensions of Globalization ii. Socio-cultural Dimensions of Globalization iii. Political Dimensions of Globalization Economic Dimensions of Globalization • Economic globalization is one of the most frequently used in discussions of development, trade, and IPE. • It is a process by which the economies of the world become increasingly integrated, leading to global economy and, increasingly, global economic policymaking, for example, through international agencies such as WTO, IMF, and WB. • Globalism is different from Globalization. In the words of Beck, globalism is the view that market eliminates or supplants political action- that is the ideology of rule by the world market and the ideology of neo-liberalism Integrations of Economics • Integration of economies made possible by: – Technology – Communication networks – Internet access – Growth of economic cooperation – trading blocs (EU, NAFTA, etc.) – Collapse of ‘communism’ – Movement to free trade associated with liberalization and deregulation – Liberalization is the removal of a tariff, or indeed any other intervention, which restores the free trade set of relative prices is unambiguously trade liberalization Global Trade • Development of trans-border production and associated intra-firm trade (multiple industries) • Special economic zones & ‘global factories’ • Trans-border marketing of brand-name products • Partial discouragement of protectionism • Freer trade was a key issue in the post-Second World War reconstruction of the world economy. The result was the General Agreement on Tariffs and Trade (GATT), a multilateral forum for tariff negotiations. • GATT was set up in 1947 in order to reduce tariffs in international trade and to eliminate all other measures preventing free trade. GATT was replaced by WTO in 1995 • The GATT regime was based on four main principles: 1) non-discrimination; 2 reciprocity - that tariff reductions in one country should be matched by reductions among its trading partners; 3 transparency - that the nature of trade measures should be clear; 4 fairness - so that practices like the dumping of goods at below market prices were deemed unfair and national governments were entitled to institute protection against them. Global Finance • Changed forms of money: – Spread of transborder currencies – Distinctly supraterritorial denominations – Digital cash – Global credit cards • Reshaped banking: – Growth of supraterritorial deposits 6 – Loans – Branch networks Page – Fund transfers Theoretical Approach to Globalization 1) For realists, states hold sovereignty, and globalization does not cause obsolete the struggle for political power between states. • Globalization does not weaken the importance of the threat of the use of force. 2) Marxists see globalization as a negative process. • For Marxists, globalization is not new process, and it is the latest stage in the development of international capitalism by West. • Globalization further deepens the existing divide between the rich and poor countries. 3) Liberalism focuses on a much wider set of interactions between states and non-state actors. • For liberals, globalization is the end point of the transformation of world politics. • Liberals are particularly interested in the revolution in technology and communications represented by globalization. • Neo-liberal or globalist are the most ardent supporter or advocates of globalization Globalization Sceptics • Globalization, according to them, is an illusion because the state still exists; • because enterprises still belong to one particular state in the sense that their headquarters are located in the territory of the state from which they sprang; • because their directors are almost exclusively of one national origin; • because their corporate culture is markedly different from that of other national firms. • cross-border trade, money movements, and investment flows are neither that new nor that great Socio-cultural Dimensions of Globalization Globalization is customarily recognized as consisting of three principal strands: economic, the cultural and the political • Social globalization means processes whereby many social relations become relatively delinked from territorial geography, so that human lives are increasingly played out in the world as a single place. • Cultural globalization refers to an emerging “global culture”, in which people more often consume similar goods and services across countries and use of common language.. • The stereotype of cultural globalization suggests that as Western forms of consumption and lifestyles spread across the globe, there is an increasing convergence of cultural styles on a global norm, with that norm being codified and defined by the global capitalist system (Examples: Coca-Cola, McDonald, use of English, Disney, Hollywood) Economic Globalization • Economic globalization is one of the most frequently used in discussions of development, trade, and IPE. • economic globalization means distance has become less important to economic activities, so that large corporations subcontract to branch-plants in the distant regions, effectively operating within a 'borderless' world. • It is a process by which the economies of the world become increasingly integrated, leading to global economy and, increasingly, global economic policymaking, for example, through international agencies such as WTO, IMF, and WB. • Economic globalization – main actors are companies, investors, banks, and private industries as well as states and international organizations Political Dimensions of Globalization • in the arena of political globalization, internationalization is regarded as leading to the erosion of the former role and primacy of the nation state. • Political globalization -- preponderance of the US and its political institutions and a vast array of international and regional organizations and trans-governmental networks • In political studies globalization ideas have been significant in thinking about ideology and in political behaviour in terms of issue areas such as ecopolitics and human rights. 7 • In terms of the environment and human rights clear evidence of the need for global codes of conduct. Page History of Globalization • It is hard to determine a specific moment when globalization started or to describe exact stages of its historical development. • History shows no obvious time on which everyone will agree. • Although considerable groundwork for globalization was laid in earlier times, the noun “globalization” entered a dictionary for the first time in 1961. • Generally speaking, commentators have linked globalization: - to the rise of the information society, - the beginning of late capitalism, - the end of communism, and even the end of history. Four historical types of Globalization Archaic Pre dates industrialization and nation state Associated with empires cities and trading Asian and African, as much as Europe Diaspora Actors involved include kings, warriors, priests, and traders Proto Emerges between c.1600 and 1800, with state Multi centred sources of indigenous changed, reconfiguration and commercial expansion including improved management of seaborne Europe, Asia, and parts of Africa commerce Actors include explorers slave traders, merchants and pilgrims Modern Conventional Western centred phase, post 1800, Involved both free trade and imperial expansion, associated with industrialization and the rise of the and improved manufacturing military and nation state communications technology Increased involvement of non western nations in Domestication of earlier forms of latter phase cosmopolitanism Emergence of global civil society Actors involved include imperial colonizers, manufacturers, scientists, activists from non government organizations Post Colonial Post 1950 emergence of a decolonized world, with Post imperial revival of cosmopolitanism new types of supra territorial organization and Actors involved include business and political regional integration elites, migrants and asylum seekers, global civil Continuing non -European sources of globalization, servants radical social movement activists, virtual including Islam, as well as syncretic inter-cultural networks around the internet fusions like jazz and world music Chronological typology of globalization • Some historians (Hopkins) believe that globalization history has a long history and suggest a chronological typology: 1. Archaic period (before 1500) 2. The Mercantilist form (proto globalization(1500-1800) 3. The classical model (1800-1945) 4. The post-war period (1945-1990) 5. The Post-cold war (1990- Contemporary globalization) Each period is charaterized by different technologies and actors in involved in activities that had a globalizing thrust Dilemmas of globalization • Economic. A Market economy, whether global or national, needs a lender of last resort not only to discipline but also to give confidence to banks and financial markets. • The dilemma is that neither former hegemons nor international organizations can be relied on for either task. Some consider one the advantages of globalization is a process no one dominates. 8 • The current global economic crisis shows the limits of unregulated economic financial structure and laissez faire policies based on market knows best. Page • The second dilemma is environmental. The motivations of corporate players in the world market economy lead most of them to destroy and pollute the planet, while the necessary countervailing power of states is handicapped by principles of international law sovereignty, and the like. • The third Dilemma is political. The long struggle for liberty and accountability gradually made at least some states accountable to the people. Globalization has undermined or significantly reduced the power of the state • Globalization, by shifting power from states to firms, has allowed international bureaucrats to undermine that accountability. • None of the non-state authorities are accountable; few are even transparent. There is a democratic deficit, not only in Europe, but also in America, Japan – the entire global economy. • There are three main areas in which state authority has declined. 1. The first is defense 2. The second is finance 3. The third is the provision of welfare Globalization and Marginalization • Developing countries today are a much more heterogeneous group than at the beginning of the postwar period. • Globalization is not helping them become more equal; the poorest are not catching up the fastest. • Globalization is making the differences between developing countries increasingly deep and wide. • The South is not a single entity. Globalization has accelerated and deepened the differentiation among developing countries in terms of their capacity to take advantage of international investment and trade flows. • The UN divided nations into two: those which participate and benefit from globalization and those which do not • The poorest countries have seen little profit from the recent boom in international financial flows, while suffering a great deal from major cuts and reorientations in aid flows from advanced nations. • Net official development assistance over the past decade has stagnated in terms of value and has declined as a share of donors GDP, reaching in 1994 its lowest level since 1973. • The gains for those developing countries that have benefited from greater access to international financial resources have come at a significant price. • International financial integration entailed an important loss of policy autonomy and has increased most countries’ vulnerabilities to external financial shocks. Globalization and Inequality • Inequality between countries has also increased. The income gap between the fifth of the world’s people living in the richest countries and the fifth in the poorest was 74 to 1 in 1997, up from 60 to 1 in 1990 and 30 to 1 in 1960. • In the nineteenth century, too, inequality grew rapidly during the last three decades, in an era of rapid global integration: the income gap between the top and bottom countries increased from 3 to 1 in 1820 to 7 to 1 in 1870and 11 to 1 in 1913. • By the late 1990s the fifth of the world’s people living in the highest-income countries had: — 86% of world GDP—the bottom fifth just 1%. — 82% of world export markets—the bottom fifth just 1%. — 68% of foreign direct investment—the bottom fifth just 1%. — 74% of world telephone lines, today’s basic means of communication—the bottom fifth just 1.5%. • The world is today is divided according to those regions and countries which participate in and share the benefits of globalization and those which do not. • The former are generally associated with the idea of progress, improvement and wealth; the latter with exclusion, marginalization, and misery. • Globalization has produced a window of opportunity for more countries to join the main stream of the world economy. • The Asian Tigers and even Japan were able to take advantage of opportunities in the World economy by a mix of policies with compromise, among others, developing a well-trained and skilful labor force, increasingly substantially the domestic saving rate, and adopting export-oriented models based on selective intervention in certain sectors. 9 Globalization from above (Falk) Page Globalization from above,” an epochal change that involves far more than international organizations like the WTO, IMF and World Bank. • It represents the globalization of production, markets and finance; the global restructuring of corporations and work; • the development of new technologies like the Internet; a radically changed role for the state; • the dominance of neoliberal ideology; large-scale tourism and poverty-induced immigration; worldwide media domination by the culture of corporate globalism; • Neo-imperialism that has concentrated control of poor countries in the hands of First World investors. • At its heart lies the ability of capital to move freely around the world, resulting in the dynamic often referred to as the race to the bottom, • a destructive competition in which workers, communities and entire countries are forced to gut social, labor and environmental protections to attract mobile capital. • Those affected by globalization from above have begun to converge, brought together by common interests, goals and a number of specific campaigns • The advocates of globalization from above often portray its critics as backward-looking economic nationalists who want to hide from the realities of globalization Globalization from below Globalization from below has emerged from diverse concerns and experiences. • Environmentalists identified globalization as a source of acid rain and global warming and saw global corporations and the World Bank sponsoring the destruction of local environments around the world. • Poor people’s movements in the Third World and their supporters around the globe saw neoliberalism, international financial capital and structural adjustment as key causes of global poverty. • Advocates for small farmers in both the First and Third Worlds identified new trade agreements as a means to destroy family farming in the interest of agribusiness • Labor movements realized that international capital mobility was leading not to mutual benefit for workers but to competitive wage-cutting. • Women’s movements identified workers exploited in the global sweatshop as predominantly women and structural adjustment as an attack on public programs that women particularly need. • Consumer movements identified neo-liberalism and new trade agreements as attacks on high national standards for food and product safety. • College students became outraged that products bearing their schools’ logos were being made by children and women forced to work sixty or more hours per week for less than a living wage. Globalization from below has emerged from diverse concerns and experiences: • Environmentalists identified globalization as a source of acid rain and global warming and saw global corporations and the World Bank sponsoring the destruction of local environments around the world. • Poor people’s movements in the Third World and their supporters around the globe saw neo-liberalism, international financial capital and structural adjustment as key causes of global poverty. • Advocates for small farmers in both the First and Third Worlds identified new trade agreements as a means to destroy family farming in the interest of agribusiness Anti-Globalization Movement • Members of the anti-globalization movement generally advocate anarchist, nationalist, socialist, social democratic or environmentalist alternatives. • Although supporters of the movement often work together, the movement itself is diverse. • Demonstrations: the Seattle (Washington-USA) WTO meeting of 1999, Genoa (Italy)G8 summit in 2001. • Members of the anti-globalization movement generally advocate anarchist, nationalist, socialist, social democratic or environmentalist alternatives. • Although supporters of the movement often work together, the movement itself is diverse. • Demonstrations: the Seattle (Washington-USA) WTO meeting of 1999, Genoa (Italy)G8 summit in 2001. 10 World Economic Forum Vs World Social Forum Page • World Economic Forum – an annual meeting held in Davos, Switzerland. Participants typically: - champion free trade - represent large corporations and world leader and corporate elites World Social Forum  Goal of the World Social Forum:  Find alternatives to the decisions being made at the World Economic Forum.  Participants are a network of anti-globalizationists.  “Another world is possible” WORLD SOCIAL FORUM(WSF) • 2002—Second WSF with 40,000 Attendees —European Social Forum held in Florence, Italy • 2003—Third WSF with 100,000 Attendees President Lula da Silva Goes from Porto Alegre to Davos with Strong Message 2003 WSF—PROTEST MOBILIZATION • Porto Alegre Attendees Plan World-wide Protests Against Iraq Invasion in March, 2003 Leading to Demonstrations in the Millions • President Lula da Silva Leads Group of 22 Developing Nations to Confront the US/EU/Japanese Alliance in Cancun 2003 CANCUN WTO DISASTER • USA & EU Refuses to Yield on Agricultural Subsidies • American Govt. Says There are “Can Do” and “Won’t Do” Countries • Attacks are Aimed at Brazil for being Inflexible • Lula Counters He is Fighting for the Poor of Latin America, Africa and Asia Globalization from Below and Deglobalization • Counter-hegemonic transnational movements • The Labor Movement The Women’s Movement • Global Indigenes • The Environmental Movement • Religious Nationalism • Anarchism • Local Sustainable Development Week 10: Global Environment, Population Growth, Poverty and Development Introduction  From Utilitarian view of Nature to Conservation  The rise of "Ecology" (1886)  Major environmental concerns include, but not limited to,  Pollution;  Countryside change;  Desertification and Erosion;  The atmosphere;  Acid rain;  Population growth;  Rural poverty and instability The rise of environmental consciousnesses and Politics, 1960s and 1970s 11 "Radical Politics" or the Counter-Culture movement of the 1960s Page  Rachel Carson, The Silent Spring, 1962 I. This book brought together research on toxicology, ecology and epidemiology to suggest that agricultural pesticides were building to catastrophic levels II. This was linked to damage to animal species and to human health. III. It shattered the assumption that the environment had an infinite capacity to absorb pollutants. “Tragedy of the Commons” metaphor Garrett Hardin (1968) seminal article: Ruination of a limited resource when confronted by unlimited access by an expanding population. Modern reference to Medieval English farmers’ use of pasture “commons” Hardin's solution -Socialism …but natural ecosystems suffered most in communist countries - Privatization, or free enterprise but doesn’t work efficiently either The rise of environmental consciousnesses and Politics, 1960s and 1970s  Meadows, The Limits of Growth, 1972, a revisit of Malthus, Essay on the principle of population (1798)  Neo-Malthusianism, Nature focused approaches versus society focused approaches)  Scientific discovery and the mobilization of public opinion - the emergence of global and national NGOs and green movements both in Europe and North America  Environmental Protection Agency (EPA) in the United States  More than 102 green movements emerged in developing countries to date The UN Environment politics /agenda and initiatives:  Campaign of Awareness:  The celebration of the Earth Day, April 22, 1970;  The endangered Species Act 1973;  Clean Air Act 1977  The UN Conference on Human Environment - which led to the creation of UNEP  The Brundtland Report (Our Common Future, 1987) in response to the request from the UN general assembly to propose long-term environmental strategies for achieving sustainable development by the year 2000.  A paradigm shift from National Sovereignty to Comprehensive Security  The advent of Sustainable Development (SD) which was embraced by NGOs and many post development theorists and supporters of alternatives approaches to development  The Brundtland Report defined sustainable development as development that is “consistent with future as well as present needs”.  Its central themes criticized the dominant paradigm for failure to reconcile those needs Sustainable Development  The sustainable development paradigm emphasized the need to redefine the term “development”.  Its posits that economic growth cannot continue to take place at the expense of the earth’s natural capital and vital natural support systems such as the ozone layer and climate system.  It also implies a rapid transition to sustainable systems of renewable natural resource management and stabilizing world population at the lowest possible level  The idea of sustainable development stipulates that the scope for sustainable economic growth is inked to the survival of sustainable environments  holds that the future generations have an equal right to use the planet’s resources.  The paradigm recognizes that developing countries must meet the basic needs of the poor in ways that do not deplete the countries’ natural resources  The sustainable development paradigm assumes the need for greater equity not only between wealthy and poor nations 12 but also within societies and between generations (intergenerational equity) Page  Sustainable development is often assimilated to Critical Alternative View of Development  Need- oriented (material and non–materials)  Endogenous (coming form within a society)  Self-reliant, (in terms of human, natural and cultural resources)  Ecologically sound, and sustainable development. Which: “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” Brundtland, in Our common Future, 1987  Based on structural transformations (of economy, society, power relations)  The alternative vision of development is based on the transformation of power structures (such as race, class, patriarchy, which is seen as upholding current inequalities. The Orthodox versus the Alternative View of Development The Orthodox View (liberal/mainstream/classical) Poverty: A situation suffered by people who do not have the money to buy food and satisfy other basic material needs Purpose: Transformation of traditional subsistence economies defined as ‘backward’ into industrial, commodified economies defined as ‘modern’. Production of surplus. Individuals sell their labour for money, rather than producing to meet their family’s needs The Orthodox View Core ideas and Assumption: the possibility of unlimited economic growth in a free market system. Economies would reach a ‘takeoff’ point and thereafter wealth would trickle down to those at the bottom. Superiority of the ‘Western’ model and knowledge. Belief that the process would ultimately benefit everyone. Domination, exploitation of nature.  Measurement: economic growth; Gross Domestic Product (GDP) per capital; industrialization, including of agriculture.  Process: Top down; reliance on ‘expert knowledge’ usually Western and definitely external; larger capital investments in large projects; advanced technology; expansion of the private sphere. The alternative/Critical/New Approach  Poverty: A situation suffered by people who are not able to meet their material and non material needs through their own effort  Purpose: Creation of human ell being through sustainable societies in social, cultural, political, and economic terms.  Core ideas and Assumption: Self –sufficiency. The inherent value of nature, cultural diversity and the community- controlled commons (water, land, air, forest). Human activity in balance with nature. Self-reliance. Voice for marginalized groups e.g. women, indigenous groups. Local control  Measurement: Fulfilment of basic material and non-material human needs of everyone; condition of the natural environment. Political empowerment of marginalized  Process: Bottom-up; participatory; reliance on appropriate (often-local) knowledge and technology; small investments in small-scale projects; protection of the commons The UNCED The Rio Conference -The Earth Summit (1992)  Delegations from 176 nations participated in the main conference, with over 30,000 NGOs taking' part in the Global Forum. At the end of the conference, five agreements had been signed:  the Rio Declaration: — Common but differentiated responsibility for the global environment; — Apportionment of equal shares of environmental space; — No use of environmental considerations to justify trade restrictions unless based on multilateral agreement; — The right of all nations to development  The sovereign right of all sates to utilize their own natural resources pursuant of their own environmental policies and their development  The Biodiversity Convention  the Framework Convention on Climate Change  The Agreement of Forest Principles 13  Agenda 21. Page The position of Third World at Rio  New and additional development assistance should be provided through a mechanism with equal representation for developing countries in decision making;  The north must reduce its consumption of natural resources and environmental services in order to give the South adequate environmental space for its development;  No restrictions should be imposed on imports by industrialized countries because of environmental problems beyond the territory of the importing country;  The North must transfer relevant environmental technologies to the South on preferential and concessional terms. The limits to the Rio agenda  It placed emphasis on the need for "continued economic growth", coupled with environmental regulation, rather than altering the basic relationship between development and the environment, as many NGOs lobbied for.  It reflects the strong influence of international industrial and business interests.  The intransigence of the USA was a serious limiting; it is opposed to sustainable development: Other Protocols  1994 Law of the Sea – national sovereignty of off-shore waters and the national responsibility for the ecosystems within these waters (re. dumping waste, & fish stocks etc.)  The Kyoto Protocol 1997  Worlds Governments met in Japan to negotiate a treaty to start dealing seriously with climate change – to reduce emissions of serious greenhouse gases – CO2, CH4, NO, + 3 types of fluorinated gases.  2002 - Earth Summit 2002, Johannesburg, South Africa. Rio+10 - World Summit on Sustainable Development -‘people, planet, prosperity’, Trade, Environment and Development  Multilateral trade rules have tremendous impacts on the environment by affecting the volume of production activity and the incentive trade provides for both sustainable or unsustainable production and use.  Multilateral trade may be used to override domestic environmental standards in order to ensure market access for particular products.  Unilateral trade restriction can be used as means to protect the environment beyond the jurisdiction of the country applying those restrictions; the GATT/WTO can be used to challenge some of those restrictions.  Lower environmental standards or non-enforcement of standards countries causes some industries in higher –standard countries to call for unilateral trade measures to increase tariffs on lower-cost imports and thus level the playing field. International Environmental Cooperation  Must yoke environmental issues to political concerns  The development of governance: — Trans boundary trade and pollution control regimes — Norm development: precautionary principle — Sustainable development and capacity-building — Framework convention  Regulating the ‘global commons’ Climate Change  An enormous challenge that can only be addressed globally  UN Convention: Common but Differentiated Responsibilities  Kyoto: a limited start (until 2012)  More involvement by developing economies needed Global Environmental Politics Not a level playing field, yet states must strive for consensus 14 Main determinants of policy: — Veto Power and Coalitions Page — Trade and Self-interest — Economic power — Public opinion — Negotiation (bargaining) among stake-holders International Regimes  Set of norms, rules, or decision-making procedures which lead to convergence of opinion.  Convention: Legal instrument containing binding obligations  Framework Convention: Establishes the ground rules for cooperation without binding obligations.  Protocols: Establishes more formal, specific obligations.  Non-binding agreement: Soft law, varying degrees of effectiveness (Marine Pollution) 1992 “Earth Summit” on Sustainability UNCED - AGENDA21. UN Conference on the Environment And Development: ◦ Held in Rio, 1992 (150 nations, 10,000 delegates). ◦ Preceded by two years of discussions on domestic and global issues, inequities, and responsibilities. ◦ Final negotiating session at Rio - AGENDA21  Global plan of action for more sustainable societies.  Non-binding agreement  Industrialized countries asked to acc
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