Whither the world economic order?
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: email@example.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.