Former General Secretary of the International Confederation of Free Trades Unions, representing 157 million workers in 225 countries, and now a member of the House of Lords, UK, speaking at the conference “Globalization: Embracing Opportunity, Creating Synergy”, at Asia Plateau,Panchgani, India

Former General Secretary of the International Confederation of Free Trades Unions, representing 157 million workers in 225 countries, and now a member of the House of Lords, UK, speaking at the conference “Globalization: Embracing Opportunity, Creating Synergy”, at Asia Plateau, Panchgani, India.

Globalisation may not be new to history but the reach, speed and dramatic impact of today's globalisation has no parallel. An additional 3.5 billion people have entered the free market's competition since the inauguration of GATT. For the first time there is a World Trade Organisation developing and imposing on all countries very demanding trade rules and penalising non-compliance. Compounding and escalating the effect of this universal expansion of trade on the whole world of work has been the simultaneous explosion of scientific and technological development.

In all previous periods of historic economic change, the nation state had the power to determine what involvement it wanted, if any, in the changes taking place. Today, you either grasp the challenge and change that globalisation demands and reap the economic benefits or you get left behind and your country and people get poorer. A hundred million people have been lifted out of poverty in China while millions in sub-Saharan Africa are worse off than they were 30 years ago. It’s a choice no government can ignore and a process no one government can change because the driving force of globalisation is not governments but 63,000 multinational companies with their 800,000 foreign subsidiaries. They account for 80 per cent of all world investments and 70 per cent of all world trade. They carry around the developing world the irresistible bargaining power of $240 million worth of inward investments. That for every developing country holds the promise of desperately needed jobs and economic growth.

Those who own and run multinationals have no evil or sinister motive but, with a duty to maximise the returns on their investment capital, they can pay scant regard to the economic and social interest of developing countries. Collectively they are accountable to no one. If you will not conform to their requirements you don’t get their investments; someone more co-operative will.

Globalisation will not be stopped, much less reversed. But it can and must be changed. How, internationally, can we curb globalisation's excesses and promote its potential to benefit? First, the world's political leaders must use their power to shape globalisation's future. Many nations are seeking the protection of regional economic federations such as EU, NAFTA, ASEAN—but this only serves to emphasize their vulnerability as individual nation states. Collectively they would be more secure if there were enforceable international regulations, standards and mechanisms designed to minimise the damage the activities of multinationals can cause.

The International Monetary Fund says that the greatest threat to economic stability comes from rapid uncontrolled movements of large amounts of capital around the world. This was demonstrated with disastrous results in the Asian financial crisis of '97-'98, when over $30 billion was sucked out of Indonesia within six months, plunging 40 million Indonesians into poverty. $1.5 trillion are traded on the world's foreign exchange markets every day, that means the equivalent money value of the whole world's annual exports is traded on the currency markets in less than a week. Here lie the seeds of destructive financial volatility.

The damaging short-term movement of capital could be minimised by international agreement among all governments to require at least six months notice of intention to withdraw sizable capital amounts. The enthusiasm for irresponsible gambling on the world's currency markets would surely be curbed by an internationally agreed tax imposed on all currency transactions and the resulting revenues be used by the IMF to counter the damaging speculation that occurs whenever a developing country faces economic difficulty. The world’s trade union movement has campaigned to limit the damaging consequences of unfettered trade on workers and their families: the export processing zones in many developing countries where workers, mostly women, are denied the rights of even the laws of their own countries; forced labour, at its worse under the military regime in Burma where men and women are requisitioned from villages by armed soldiers to work on back breaking hazardous projects and where death is the response to a refusal to work. We have filmed the evidence of factories in Pakistan where children as young as five to six years are labouring their childhood away on contracted work of multinationals.

The trade union movement says it is time that a few but fundamental international labour standards should become enforceable in every country in the world. If governments permit the richest man in the world, Bill Gates, to have his intellectual rights enforced by the WTO, what sort of morality do they exhibit when they prevent the WTO from enforcing the right of a five-year-old to be educated not exploited? Governments of the developing world would wrongly regard the issue of core labour standards as a protectionist ploy of the developed world. The reality is that enforceable minimum labour standards would go a long way to establishing a trade level playing field among developing nations who are being blatantly played off, one against the other, by the powerful multinationals of the developed world.

Well over half of all investment in the developing world goes to China. India’s products are being undercut in trading competition by China because India’s products carry the cost of decent wages won by independent unions and India defends their right to organise and bargain collectively. China’s unmatchable trade-winning prices are made possible with a massive regimented workforce and its state controlled trade unions and where prison is the penalty for claiming the right to independently bargain for better wages. India’s government should accrue for the level playing field I describe, because India has within its grasp the ingredients to win in fair trade competition.

What are the time proven factors of economic stability and success in the intensifying competitive climate of globalisation? First, sustained investment in an industry friendly infrastructure, the three basics being transport in all its forms, the new technology of communications and, in a fuel hungry world, sustainable energy supplies. European countries will live to regret their pandering to anti-nuclear energy lobbies.

The most successful global companies sustain investment in their most valuable asset— employees. The strongest economies in the world do the same. Education was the bedrock on which the economic strength of the industrialised world was built. And globalisation has only heightened and increased education’s importance. Why? Because the greatest challenge of globalisation is change. Making it, managing it, and accepting that it is going to be a continuous process. Education sharpens the tools of change—flexibility and ideas. The fear of change fosters insecurity. Education instills the confidence to change to be flexible. Education is the raw material of new ideas. Yesterday’s education must become today’s lifelong learning. India has in abundance the vital ingredients needed to tackle the challenge of globalisation—a knowledgeable, inquisitive, enterprising population. Some, with their software success, have demonstrated the ease and mastery of globalisation’s newest technologies. However, there are millions more waiting for their talents, ideas, and determination to be liberated, harnessed and transformed into prosperity for them, their families and the country. Shakespeare said, “ Wisdom cries out on the street and no man regards it.”

Just one thing more. Change requires leadership—with vision enough to excite the young and, yes, to motivate the weary and the cynical. Not one leader, but many. I have listened to people here in Panchgani enough to know they have the vision to lead and the courage with others to move the most ingrained of obstacles that block the path to India’s prosperity, be it bureaucracy, corruption or fear of change itself. It is better to light one candle of leadership than to curse the darkness of globalisation. Have you not called this conference? Is it not time to start? I think so and so do you. Thank you.

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© Caux Initiatives for Business 2003