Whither the world eco­nomic or­der?

Pakistan Observer - - EDITORIALS & COMMENTS - Khalid Saleem

ills of the world. “Glob­al­ize and all will be well” comes through as the most pop­u­lar slo­gan di­rected at the havenots. Re­gret­tably, like all such catchy slo­gans, this one too has a catch in it. It is based on the pre­sump­tion that what is good for the goose is equally good for the gan­der. The goose in the present con­text hap­pens to be the in­dus­tri­al­ized de­vel­oped world that hap­pens to be­lieve that what is good for it­self de­serves to be rammed down the throats of the rest of the world. As a con­se­quence, it comes as some­thing of a sur­prise to the de­vel­oped world that the de­vel­op­ing one may find their con­coc­tion some­what un­palat­able to swal­low, gen­er­ous sug­ar­coat­ing not­with­stand­ing.

Post World War II, the eco­nomic regime de­vised by the vic­tors has been heav­ily weighted against the poorer coun­tries of the world, par­tic­u­larly the for­mer colonies. The in­evitable con­se­quence has been a mas­sive trans­fer of re­sources from the de­vel­op­ing economies to the in­dus­tri­al­ized world, rather than vice versa. This has been made pos­si­ble, among other things, by the very sim­ple mech­a­nism of main­tain­ing an un­just - and un­jus­ti­fied - dis­pro­por­tion be­tween the price struc­ture of the prod­ucts of in­dus­try and that of pri­mary produce. The in­ter­na­tional prices of fin­ished goods, ex­ported by the in­dus­tri­al­ized world, have been con­stantly in­creased in pro­por­tion to the rise in liv­ing stan­dard of the in­hab­i­tants of these favoured lands. The world prices of pri­mary produce, on which the economies of the poorer coun­tries de­pend, have not only failed to in­crease in pro­por­tion but also, in cer­tain cases, have ac­tu­ally gone down. This onesided dis­par­ity has been per­pet­u­ated through an in­trin­si­cally un­fair in­ter­na­tional eco­nomic regime.

To have a rough idea of the in­built eco­nomic dis­par­ity, a cur­sory glance at some eco­nomic sta­tis­tics may be of Email: bin­wa­keel@ya­hoo.com in­ter­est. Economies of the oil-pro­duc­ing coun­tries in the Mid­dle-East re­gion that were com­monly con­sid­ered to be “rich” and those of the “Asian Tigers”, such as Malaysia and In­done­sia, that have had some eco­nomic suc­cesses, hardly bear any com­par­i­son at all with the ‘eco­nomic per­for­mance’ of the in­dus­tri­al­ized Western states. The to­tal gross do­mes­tic prod­uct (GDP) of the en­tire Is­lamic World, com­pris­ing al­most one fourth of hu­man­ity, comes to a pal­try amount in com­par­i­son with the GDPs of in­di­vid­ual in­dus­tri­al­ized states like France, Germany and Ja­pan. What it all goes to prove is that the in­dus­tri­al­ized coun­tries and their de­vel­op­ing coun­ter­parts are all stuck in well-worn grooves from which there is lit­tle hope of es­cape.

Glob­al­i­sa­tion ap­pears to be yet an­other at­tempt at per­pet­u­at­ing the in­equitable sta­tus quo. The economies that de­pend heav­ily on the ex­port of pri­mary com­modi­ties have never had a fair deal. The world prices of pri­mary produce and those of the fin­ished in­dus­trial goods, that use the for­mer as raw ma­te­rial, should log­i­cally have an en­meshed re­la­tion­ship. Re­gret­tably, this does not hap­pen to be the case – prices of each be­ing in­vari­ably ma­nip­u­lated by the rich in­dus­tri­al­ized coun­tries to their own ben­e­fit.

Pub­lic mem­ory is prover­bially short. The coura­geous bat­tle of yore fought by the oil-pro­duc­ing coun­tries in the sev­en­ties and early eight­ies is all but for­got­ten. All hell had bro­ken loose when the oil-pro­duc­ers de­manded a fair price for their oil. See­ing the lay of the land, the pro­duc­ers of other pri­mary prod­ucts also added their fee­ble voices to the protest, de­mand­ing a slice of the cake. The en­su­ing ne­go­ti­a­tions in the mul­ti­lat­eral eco­nomic fo­rums dragged on for sev­eral years. As al­ways, the “haves” won not only the bat­tle but also the war. Save for the oil-pro­duc­ers, the “have-nots” failed in their quest to win a fair price for their produce. What is more, they were bur­dened with the ex­tra bill for the ex­pen­sive oil in ad­di­tion to dearer in­dus­trial prod­ucts they im­ported from the in­dus­tri­al­ized coun­tries.

An­other as­pect of the New In­ter­na­tional Eco­nomic Or­der on which one has not had time to dwell is the regime of the so-called “in­ter­na­tional as­sis­tance”. This regime gave rise to a game of “lend lease” all to the ad­van­tage of the lenders, al­lied to bu­reau­cratic cor­rup­tion of hor­ren­dous pro­por­tions in the bor­row­ing states. The re­sult again was as can be ex­pected, to wit, a net trans­fer of re­sources of mas­sive pro­por­tions away from the poor economies. But that, as they say, is an­other story! — The writer is a for­mer am­bas­sador and for­mer as­sis­tant sec­re­tary gen­eral of OIC.

An­other as­pect of the New In­ter­na­tional Eco­nomic Or­der on which one has not had time to dwell is the regime of the so-called “in­ter­na­tional as­sis­tance”. This regime gave rise to a game of “lend lease” all to the ad­van­tage of the lenders, al­lied to bu­reau­cratic cor­rup­tion of hor­ren­dous pro­por­tions in the bor­row­ing states.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.