By Steve Schifferes
BBC News Online economics reporter
A new report has called for radical changes in the direction of world
economic policy to overcome the negative effects of globalisation.
Protests against free trade have multiplied
Major changes in trade and immigration policy are needed if the world's
poor are to share in the benefits of globalisation, according to the
UN-sponsored report of the World Commission on the Social Dimension of
"There a deep-seated and persistent imbalances in the current
workings of the world economy, which are ethically unacceptable and
politically unsustainable," the report said.
The report says that only a dozen developing countries have benefited
from the increasing integration of the world economy,.
Those who have lost out include "the poor, the asset-less, illiterate
and unskilled workers, and indigenous peoples."
Income per person in the world's 20 poorest countries has barely
changed in the last 40 years, from $212 in 1960-62 to $267 in 2000-02,
while income in the richest 20 nations has tripled, from $11,417 to
The report said globalisation's "potential for good is
immense", but "the advantages are too distant for too many,
while the risks are all too real".
The president of Tanzania and co-chair of the report, Benjamin Mkapa,
said the situation was "untenable" and that "countries with
impoverished, disadvantaged and desperate populations are breeding grounds
for present and future terrorists".
He called for a better balance between globalisation for profit, and
globalisation for people, and for countries to "eschew gratuitous
unilateralism" in favour of a UN-based system.
Dire poverty "is a breeding ground for terrorism"
Among the more important changes called for by the commission are:
- An international agreement on migration
- Fairer trade agreements that open Western markets to agricultural
and textile products from developing countries
- An agreement on a "balanced framework" for foreign direct
investment that will ensure that developing countries benefit
- Enforcement of labour laws and trade union rights especially in
export processing zones
- Better coordination between world institutions like the IMF, World
Bank, ILO, and World Trade Organisation in ensuring that job creation
is the central economic policy goal.
Free up migration
Tarja Halonen, the president of Finland and also co-chair of the
report, said there should be more emphasis on the free movement of labour
through migration, as opposed to the free movement of capital, if
developing countries were to benefit.
The remittances of migrant workers back to developing countries already
amount to $75bn worldwide, 50% more than the total development assistance
given by rich countries to the poor.
President Halonen told BBC News Online that reaching an international
agreement on migration would be difficult, given the "real
sensitivities" in rich and poor countries, and in particular, the
"somewhat egocentric" approach of the EU.
In contrast to the past, many more migrants from developing countries
were highly skilled and highly educated, contributing to a local brain
But she said all countries would benefit from an "orderly and
managed process of international migration" instead of the current
system which encouraged illegal migration and exploitative practices.
Towards global government
The report says that the fundamental problem is that "global
markets have grown rapidly without the parallel development of economic
and social institutions necessary for their smooth and effective
It says that "there is a serious democratic deficit at the heart
of the system" and calls for more influence for developing countries
and the poor on the key institutions of global governance like the World
Bank and IMF.
In some of its most controversial passages, the authors float ideas for
a global tax that would redistribute the fruits of globalisation to the
They also call for parliamentary oversight of the world financial
institutions, and a UN globalisation forum which would produce an annual
But with the world's largest economy, the United States, firmly
committed to working on development issues largely on its own, such
developments may be some distance from realisation.
And international economic policy coordination, whether on exchange
rates or growth packages, is still stalled amid disagreements between the
Nevertheless, President Mkapa stressed that developing countries were
not "begging, but seeking a fair system of exchange" so that
turbulence could be replaced by hope and cooperation.
The World Commission on the Social Dimension of Globalization's
report, Fair Globalization: Creating opportunities for all, is published
by the International Labour Organisation in Geneva.