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Interviews, 8/14/2002

President of the Republic of Finland Tarja Halonen's article for the UN Chronicle (Number 3/2002)



Global Development with Globalisation; From Words to Reality



It has been said that globalisation has changed the lives of the people of our era faster and more unpredictably than perhaps any other phenomenon. Globalisation has given hundreds of millions of people the opportunity to achieve a standard of living incomparably higher than ever before, but it has likewise driven many into great economic distress and insecurity. The world was advancing towards internationalisation long before our era began, but it was only the advent of modern information technology that triggered the digital revolution which people see as having brought the world so close, but taken power so far away.

The profit-seeking market economy has spread globally since the end of the Cold War. It has demonstrated its efficiency and dynamism compared with other economic systems. The idea of entrepreneurial creativity is essential and ideally compatible with the demands of modern technology. A rapid tempo is a characteristic feature of both. But it is in precisely these characteristics that also risks lie. How does one relate security to this fast pace?

A global development also needs global ground rules. For us to be able to make our world develop in a more equitable way, we must be able to manage many variables at the same time. In this, nation-states still have an important role and we must strengthen their opportunities to create favourable conditions for people and companies to operate in. Democracy, human rights and the rule of law still create a sustainable foundation for development. At the same time, the fundamental factors for a sound socially more just economic development should be created.

Global rules of the game should be able to take account of international actors. The uncontrolled power of global markets has been regarded as the principal challenge, but a phenomenon that emerges parallel to it is that of supranational bureaucracy and the power of experts, in relation to which democratic oversight and guidance are inadequate.

People have not by any means remained inactive in the face of these problems. Most people have been convinced of the benefits of cooperation rather than closing doors. We have a large number of international agreements and organisations in order to achieve better management of the situation.

The task of the World Trade Organisation is a very important one. Strengthening trade liberalisation is also a prerequisite for increasing prosperity in developing countries. But it is not enough. For the rules of the game to be fair, a lot more is demanded. The atmosphere at the Doha conference aroused hopes after a long hiatus. It extended a hand to the poor countries, but it was also a new opening towards incorporating ethical values into the trade sector.

There is certainly no desire to call into question the central role of the United Nations in safeguarding global development. The great support that the Millennium Summit received reflects this. The Millennium Declaration may be the beginning of a new development. It includes the factors that combine positive economic development with the well being of people and the environment. These are the elimination of poverty as well as investment in health and education.

The International Conference on Financing for Development in the Mexican city of Monterrey continued this unanimity. If, as I hope will be the case, this message of shared responsibility can be carried on to the World Summit on Sustainable Development in Johannesburg, we shall be able to sigh with relief that we have stepped onto a common path.

But there is a real urgency about implementing these collective summit goals in practice. The changes that globalisation has brought do not wait; they are affecting the whole lives of millions of people. The problem is not just the political will required for the implementation of these decisions, but also the overlapping character of various processes that are taking place at the same time and the gaps in them. This causes a sense of helplessness in people, making them angry at not just globalisation, but also those who seek to manage it and their motives for doing so.

There are shortcomings in the work of the United Nations and reform of the organisation needs additional momentum. However, international criticism has been focused above all on the Bretton Woods institutions and their operations. It is precisely because of globalisation that the role of the IMF as a promoter of international economic stability has grown. Its ability and skill to give the right advice have been sharply criticised in recent times. Critics have argued that the IMF operates in too narrow a sector to understand the factors that affect a society. Often, taking the social situation in a country better into consideration and getting its economy onto a course of rapid growth would be both politically easier to implement and in the economic sense just as effective as merely relying on strict inflationary discipline. I believe the discussion that has begun will eventually have an influence, although it seems at the moment that the World Bank has been more willing to take part in this dialogue.

Other reasons certainly exist as well. The economic sphere does not have the same transparency and tradition of shared doctrines as political life. Asking for economic aid or recognising that it is needed can be politically difficult for any government. It is also good to remember that private enterprises want to be profitable. They have often tended very easily to leave as soon as even the slightest alarm signals are heard, and thus the situation worsens further. The corporate world itself prefers to conceal its crises and often not even commonly agreed oversight mechanisms can be trusted, as evidenced by for example the Enron case.

Nevertheless it is a positive thing that many companies have begun to pay more attention to their social responsibility. Personnel, NGOs and also consumers have all added momentum to this development. Some multinational enterprises have also agreed with international trade unions representing their workers on cooperation between company and personnel on the basis that the fundamental rights at work are respected at all of the company's work locations and in all of its operations.

International cooperation on the economic side is lagging badly behind what we are accustomed to in the political sphere. Nevertheless it is encouraging to notice that the history of even international political cooperation in its present form is short. It is only since the Second World War that the international community has been striving determinedly to find a world order based on universal values. The development of the Declaration of Human Rights into a broad international system of treaties, to which most of the world's nation-states are committed, has meant an enormous positive change.

Human rights, democracy and the rule of law are the generally accepted criteria for a modern nation-state. The international community has been able to create a crisis-management system based mainly on UN actions. It does have its failings, but compared with it we are only in the very early stages when it comes to economic crises, be it a matter of analysis, advance warnings, crisis management proper or reconstruction.

I believe we are capable of better analysis of economic crises and more effective international cooperation to prevent and manage them. I believe we can do even better than that: not only can we prevent a disaster, but also find the factors of success. Political stability, equality, education and good governance are often-mentioned examples of these important factors. For this we need information, creativity and cooperation as well as - the political will. That is why the decision by the Governing Body of the International Labour Organisation to appoint a World Commission on the Social Dimension of Globalisation meets a political need.

The World Commission is tasked with finding ways of ensuring that there are more winners and fewer losers in globalisation. The idea is, in a way, very simple: a market economy should be regulated - without killing its dynamism and creativity - in a way that takes more account of people and nature. That has already been done well in many countries. The problem with this target is rooted in, on the one hand, the border-transcending character of globalisation and, on the other, the weakness of global governance.

The ILO's Director-General Juan Somavia appointed the World Commission on 28.2.2002. The goal set for it is "to promote international dialogue on ideas to make globalisation more inclusive, at a time when the debate is dominated more by polemics and preconceptions than by facts."

The World Committee's co-chairs, myself and President Benjamin Mkapa of Tanzania, want to examine ways in which all international organisations can contribute to a more inclusive globalisation process that is acceptable and fair to all.

The task of the World Commission is to establish the facts and outline the main contours and dynamics of the process and examine the perceptions of workers, enterprises, investors and consumers as well as different expressions of civil society and public opinion from all parts of the world.

We shall analyse the impact of globalisation on employment, decent work, poverty reduction, economic growth and development.

And we hope to forge a broad consensus on the issues, including the involvement of all interested international organisations, as well as governments and organisations representing workers and employers.

The final result will be - hopefully - the launch of a process for addressing the key issues posed by the global economy to make globalisation sustainable and promote the fair sharing of benefits.

The World Commission has met only twice to date. One worry that we have certainly not had is a shortage of written material on globalisation nor, in this stage at least, is there any lack of unanimity. The World Commission's 19 members represent a broad and diverse range of perspectives on globalisation. They also represent a high level of personal competence. Despite their different backgrounds, they have seen, with an almost astonishing unanimity, a need to manage risks in the international economy and to fulfil people's wish for a decent life. As members of the Commission they are as well convinced that it is possible to exert influence on different features of the globalisation for the good of the people and that it shall be done.

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Updated 10/11/2002

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