-Caveat Lector-
G8 Owes Us An Answer
New Research Shows That Economic Growth Worldwide Has Actually Slowed
During The Era of Globalization
by Jonathan Steele
The G8 summit in Genoa will be remembered for its police brutality and the
clashes, mostly peaceful
but sometimes violent, between protesters and the Italian security forces.
Yet, paradoxically, on one issue most demonstrators were united with the rich
nations' leaders. In
the streets as well as the suites there was a general belief that globalization
has accelerated the
world's economic growth.
Some protesters argued that the growth has been grotesquely uneven, with little
trickling down to
Africa. Some said it has increased the inequalities of income within countries,
as well as between
poor and rich ones. Some attacked the fact that faster growth has been
environmentally unsound,
creating excessive carbon emissions and destroying natural habitats.
While the criticisms vary, the underlying assumption is that overall economic
growth has been
speeding up. This was also the message proclaimed by the UN development
program, which
published its annual human development report on the eve of Genoa.
"Thirty years of impressive progress," it trumpeted. "Too few people recognize
that the impressive
gains in the developing world in the past 30 years demonstrate the possibility
of eradicating
poverty."
It was the UNDP which first elaborated the concept of a human development index
as a progressive
step away from assessing people's welfare purely by income measurements. The
UNDP added other
standards such as infant mortality, literacy, and gender empowerment.
So it is surprising that its latest report should also push the complacent line
about general growth.
How did its authors decide that the last 30 years is the right period for
assessing progress?
In a powerful new paper, The Emperor Has No Growth, a group of researchers in
Washington
challenges the conventional view of history. They have drawn up a globalization
scorecard which
compares the period from 1980 to 2000 - the era of Reaganite neo-liberal
globalization when the
drive for capital deregulation, privatization, and the lifting of barriers to
international investment
was at its height - with the period from 1960 to 1980 when most developing
countries had a more
restrictive and inward-looking economy.
The comparison is dramatic. The researchers took all the UNDP's indicators and
found that between
1980 and 2000 there was "a very clear decline in progress". The poorest
countries went from a per
capita growth rate of 1.9% annually in the 1960-1980 period to a decline of
0.5% a year between 1980
and 2000. The middle group of countries did worse, dropping from annual growth
of 3.6% to growth
of just under 1% after 1980. The world's richest countries also showed a
slowdown.
For life expectancy, the picture was similar. Only the richest countries showed
a higher rate of
improvement in the past 20 years. Among middle-income and poor countries
progress in reducing
child mortality and raising school enrollments was faster before 1980.
Impressive though their evidence is, the paper's authors draw deliberately
modest conclusions.
They say they cannot prove the liberalization of trade and capital flows has
caused the decline in
progress.
Nor can they link it to particular policy prescriptions by the International
Monetary Fund and the
World Bank, such as public spending cuts, user fees for health and education,
and increased
foreign exchange requirements. But they do insist the burden of proof must be
squarely placed on
those who claim success for the neo-liberal experiment.
Their call is welcome. It chimes in with the views of other non-governmental
organizations, such as
the British-based World Development Movement, as well as many developing
countries'
governments.
The G8 wants the next big push for its version of globalization to come in
November when the
World Trade Organization is due to meet in Qatar. After Genoa, Clare Short,
Britain's development
minister, used the unworthy tactic of trying to dismiss the protesters as
middle-class European
interferers in contrast to informed African leaders.
She seemed unaware that on the eve of Genoa, 30 African countries, including
the regional giants
South Africa and Nigeria, signed a declaration in Addis Ababa rejecting new
powers for the WTO.
They also called for existing trade agreements to be implemented fully rather
than in their partial
form, which discriminates in favor of the EU and other rich countries. Their
position has more
support from the developmental NGOs than from the G8. So let us have a bit more
humble pie from
the G8, and an honest review of the reasons for their poor record on growth and
social progress
before they plunge further into error.
• The Emperor Has No Growth, Center for Economic and Policy Research, available
at
www.cepr.net
• If it's broke, fix it, available from the World Development Movement at
www.wdm.org.uk
Copyright 2001 Guardian Newspapers Limited
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