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1 december
2000
slovak
translation
towards sustainable economies:
challenging neoliberal economic
globalisation
Friends of the Earth International (FoEI)
is a federation of independent organisations
in 66 countries in Africa, Asia, Europe,
Latin America and North America. FoEI's
Trade, Environment and Sustainability (TES)
Programme was established in 1992 and is
coordinated by FoEI member groups in each
continent, all of whom are equally
responsible for both strategy and policy.
This paper is the result of a two-year
dialogue between FoEI members living in very
different economic and political
circumstances in the North, South, East and
West. We hope it will serve as a useful
contribution to a constructive public debate
concerning the future of our economies.
Friends of the Earth International (FoEI)
campaigns for fair and environmentally
sustainable societies that meet people's
needs. However, in order to campaign for
sustainable societies, FoEI has also found it
necessary to challenge neoliberal economic
globalisation, which works in the opposite
direction, preventing sustainability.
Neoliberal economic globalisation is
failing people in many different ways. We
live in a world in which inequality is on the
increase and many millions are unable to meet
even their most basic needs. Forests are
being clear-cut, minerals strip-mined and
fossil fuels exploited at completely
unsustainable rates to provide natural
resources for the 'global economy'. Democracy
is being eroded as power is concentrated in
fewer and fewer hands. Biological and
cultural diversity are dwindling at an
alarming rate; and hard won social and
environmental standards are threatened.
If we continue on this course, the
prospects for both current and future
generations seem grim. The real challenge for
human-kind will be providing a decent quality
of life for a predicted population of 10
billion people in 2050, whilst reducing
environment impacts to sustainable levels.
Neoliberal economic globalisation is
increasing the scale of that challenge. Yet
the official line is that 'there is no
alternative'.
FoEI disagrees. Firstly, the theory
underlying neoliberal economics is
out-of-date. The increasing ease with which
capital can be moved around the world means
that many countries find it difficult to
retain or attract necessary investment
capital. Large and influential corporations
are able to play cash-strapped governments
off against each other, gaining tax
concessions and pushing down social and
environmental standards around the world.
Increased demand for finite resources is now
a significant limiting factor; and it has
become clear that wealth does not
automatically 'trickle down' to people, as
has been previously claimed. All in all,
neoliberal economic globalisation is
increasingly a 'win-lose' situation for many,
rather than the 'win-win' one its supporters
claim it to be.
The scale of the problem may be daunting,
but a different, democratic, equitable and
sustainable future is possible. However, we
need to go right back to basics and
reconsider what we need our economies to do;
what decision-making and regulatory processes
would be most appropriate; and what kinds of
economic information are necessary.FoEI
recommends that we should: change course -
establish new economic goals
A credible and productive system of
economics should have as its goal the
satisfaction of people's needs through the
equitable and sustainable use of the planet's
limited resources. Poverty eradication,
social and cultural sustainability,
intergenerational equity and human dignity
must be key economic objectives. Production
and consumption levels need to be managed;
and special and differential treatment for
impoverished countries and people should be
an integral component.
Simply attempting to maximise GDP is no
longer sufficient. To achieve these
objectives, 21st century societies require
sophisticated national and international
economic policies that promote optimum levels
of economic activity based on key
internationally-agreed principles,
including:
- respect for human rights;
- respect for diversity in biological,
cultural and economic systems;
- economic and political subsidiarity;
- equity within and between generations,
including redistribution of control over
resources such as land and repayment of
ecological debt;
- democratic accountability and transparency
of governments, businesses and other
organisations, a public right to know and
citizen access to justice;
- the polluter pays principle, legal
liability and redress;
- respect for high environmental, health and
safety, social, labour and health
standards;
- and the precautionary principle.
Diversity is integral to sustainability
and this applies to economics just as much as
any other field. Countries and communities
should have the option to select those
economic mechanisms that they believe best
suit their economic, social, cultural and
environmental needs at any one time. These
decisions should be made with a view to
optimising economic activity and maintaining
a degree of self-reliance, in order to
encourage the development of strong and
diverse economies capable of withstanding and
adapting to external shocks.
Decision-making should also be devolved
downwards by applying the principle of
economic subsidiarity (ie decision-making at
the lowest appropriate level). Multi-layered
decision- making would also be advantageous
because it could help to introduce checks and
balances between and by decision-making
bodies, reducing the likelihood of abuse of
power in any one sphere.
get smart - measure economic welfare
accurately
We need to take a much more sophisticated
approach to measuring our economic welfare.
In particular, we need to acknowledge and
value work fairly; and include the real
social and environmental costs of transport
in consumer prices.
GDP as it is currently calculated does not
measure quality of life, social progress,
poverty eradication, human development or
environmental quality; important social roles
including both care of children and the
elderly and household work are not usually
accorded any economic value; and subsidised
transport means that highly-polluting and
habitat- destroying forms of production and
trade are favoured over local production and
commerce.
plan for the future - cut resource use
and conflict
Many natural resources are already
severely over-used. In fact, if people all
over the world were to consume at the levels
that many in the North do already, we would
need at least eight planets to provide us
with the resources we need by the year
2050.
Significant changes to production and
consumption patterns (which will in turn
require effective and far-sighted
international agreements) are required to
ensure that global resource use is brought
within sustainable levels for the long-term
health and benefit of all. These changes
must, however, take into account and address
underconsumption, predominantly in the
South.
'Reduce, reuse and recycle policies' are
absolutely key to increasing efficiency and
reducing resource use in the North. However,
in order to reach sustainable resource use
levels whilst still providing resources for
increased consumption by the poor, nations
will need, in addition, to promote demand
management and sufficiency strategies.
Reducing resource use in the North is more
like to bring peace and security than
neoliberal economics (by reducing competition
for resources); and has the potential to
generate higher levels of employment.
share resources - eradicate inequality
and poverty
Current economic policies, such as those
promoted by the World Bank and the IMF,
effectively redistribute resources from the
poor to the rich, aggravating poverty and
inequality. Repayment of debt, in particular,
has resulted in a tragic 'reverse Robin Hood'
transfer of wealth from poor countries to
rich Northern creditors, even though rich
importing countries have incurred an
ecological debt to the countries of the South
which far outweighs the official financial
debt of the South (through long-term access
to undervalued resources).
This redistribution needs to be reversed,
in order to reach a balance whereby access to
resources and benefits from the use of those
resources is distributed equitably within
countries, between regions and amongst
people. The financial debt must be cancelled;
and access to resources, a healthy life and a
healthy environment should be deemed human
rights.
change priorities - invest in the real
economy
Policies which promote economic stability
(and contribute to or at least do not
undermine sustainability in general) must be
a key component of sustainable economies.
Nations need to be able to control and direct
domestic and foreign investment flows,
favouring stable and welcome investment in
the real productive economy over and above
the 'virtual' money economy. Screening of
foreign investors, locally-decided
performance requirements, preferences for
local and domestic enterprises and regulation
of domestic investors - all with a view to
promoting sustainable economies - should be
the norm.
rebalance trade - reinvigorate local
economies
Whilst a certain level of international
trade may be inevitable and even desirable,
healthy and sustainable economies and
communities are the key to meeting people's
basic needs. They are, however, being
undermined by neoliberalism.
There is a clear need to rebalance trade,
deprioritising international trade, giving a
higher priority to local and regional trade
(and small and medium-sized enterprises) and
promoting more local self-reliance. Local
economies and communities need to be
reinvigorated. People must have the right,
through democratically elected governments,
to strengthen protection of their local and
national environments; to promote
small-scale, sustainable economic activity;
and to exert control over their shared
natural resources. Implicit in this is the
ending of externally imposed export-led
development.
Furthermore, national, regional and
international trade rules should not override
laws designed to protect local communities,
the environment and public health.
This is not to say that all decisions should
be taken locally. Implementing the concepts
of economic subsidiarity and economic
democracy should enhance input from the local
level, encourage diverse economies and
provide checks and balances that discourage
the abuse of power at any one level.
regulate corporations, reduce corporate
influence
If the goals of the global economy were
changed in line with the suggestions in this
position paper, the role and indeed the
nature of companies would change too. They
would be expected, both in general terms and
via international and national regulation and
incentives to contribute to a range of goals.
They would be required to contribute to
generating optimum levels of economic
activity and to implement high environmental
and social standards (including minimising
resource use, reducing pollution levels,
ensuring high labour standards and promoting
gender equity). They would be expected to be
broadly accountable to citizens. Changes to
economic welfare measurements would also
encourage governments to ensure that
companies meet these goals.
Both domestic companies and companies
planning to operate in a foreign territory
should be obliged to adhere to the following
principles: (1) prior informed consent by the
community, determined by community processes,
to be affected by a corporate project or
activity; (2) conduct of social and
environmental impact analysis; (3) legal
financial and criminal liability for
environmental clean-up, rehabilitation, and
pollution control; (4) provision of royalty
payments to communities within whose
localities resources are being extracted by
the corporation; (5) community rights against
social, cultural, physical, and economic
displacement due to a corporate project; and
(6) respect for human rights and high
environemntal and social (including labour)
standards.
It is crucial that international
competitivity no longer be an over-riding
objective for policy- makers (it should be
replaced with the objectives outlined above).
Competition has its place but it needs to be
just one of many key goals; and it needs to
be regulated, in part by introducing
international anti-trust laws to prevent the
development of cartels and other anti-
competitive practices.
open up - ensure transparency and
democracy
Creating democratic and sustainable
economies is an ambitious goal that can only
be realised by ensuring that international
policies genuinely reflect and address
peoples' hopes and aspirations for a just,
fair and equitable society nationally and
globally. To achieve this, political
decentralisation is essential. It will be
absolutely necessary to ensure that nations
and communities are the key decision-makers;
that all relevant decision-making bodies -
from the local through to the international -
are genuinely representative and
participatory; and that people have real
opportunities to participate in economic
decision-making.
Furthermore, it is right and proper that
governments negotiate international
agreements that have been mandated by their
citizens. However, governments should be
fully accountable for their actions and this
can only happen when it is possible to
determine what those actions are. The
external and internal transparency of
intergovernmental trade and other similar
negotiations needs to be increased
significantly.
update infrastructure - redesign rules
and institutions
The regional and international elements of
rebalanced trade will require a real and
effective system of multilateral trade rules
and agreements, based on new economic goals,
which would be integrated with and complement
rather than destroy non-trade-related
legislation; and a raft of internationally
agreed legislation dealing with related
non-economic concerns such as equity and
sustainable consumption and production.
International and regional trade and finance
institutions should be incorporated fully
into the United Nations; the way in which the
World Bank and the IMF operate would be
required to change in line with sustainable
economies policies; and multilateral treaties
on the environment, development, health,
labour and human rights must take precedence
over trade.
Finally, governmental cooperation is key
to achieving these ambitious objectives.
Governments should therefore be provided with
incentives to cooperate. Incentives and
penalties should become a standard feature of
multilateral treaties; and governments should
have a duty of care when it comes to
designing and implementing domestic policies
to protect the environment and promote
health, when those policies could have
undesirable effects in other countries.
International court(s) should be mandated to
resolve disagreements in this respect; and
disputes should be resolved on the basis of
agreed principles.
see for the full text:
For further details of the impacts of free
trade, please see The World Trade System: how
it works and what's wrong with it and The
World Trade System: winners and losers, a
resource book, available at:
http://www.foe.co.uk
Contact:
Ronnie Hall 020 7490 2665
Press Office 020 7566 1649
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