Thursday, November 13, 2003

Hazel Henderson - New Paradigms in World Trade

One of the brightest minds in the world has done it again. Hazel not only puts the proper people in their place, she also clearly points out where governments, and their international financial and trade institutions, have failed miserably to solve the world's sustainability conundrum.

Hazel Henderson


by Hazel Henderson

Beyond Globalization” – Foreign Trade Sustainability, a Social Responsibility
Thank you for the honor of addressing this important gathering. SEBRAE represents many of the key values for building more equitable, sustainable futures in Brasil and Latin America: entrepreneurship, leadership in local development, innovation in both social and technical spheres, social responsibility and best practices in management of small and medium size enterprises, which are the engines at the heart of robust, home-grown, domestic economies. Today, economists are re-assessing their fashionable strategies of export-led national GDP-growth – in the face of a crisis-ridden world economy in need of repair and rebalancing. The traditional economic theories that produced today’s economic globalization are discredited – as are many of its international financial institutions – the International Monetary Fund (IMF), the World Bank and the World Trade Organization (WTO).

President Luiz Inacio Lula da Silva has emerged as a world leader in pointing to healthier, alternative paths toward sustainable economies, at local, national, regional and global levels. Brasil’s leadership in forming the Group of 21 (now 22) developing nations opened a new era in world trade at the Cancun WTO meeting. No longer will narrowly-calculated trade rules and negotiations trump fairness, higher human values and goals. Brasil’s business community also articulated at Cancun the new model of socially-responsible business management. Ricardo Young Silva of the Instituto Ethos de Empresas e Responsabilidade Social, called for these higher standards of social and economic performance to be incorporated, along with full cost prices and life-cycle costing into WTO rules and accounting practices. The new economics and indicators of sustainable human development and quality-of-life are beginning to call into question the traditional GNP-growth model (see Figure 1, GNP Problems). The social costs, waste and ecological destruction of this obsolete model are now self-evident. The first international conference of world-class statistical experts on these expanded national accounts, ICONS, will convene in Curitiba, October 26-29. (To register, visit Brasil’s leaders in these new statistics of sustainability will also showcase their groundbreaking work.

The obsolete neoliberal model applied to world trade, drove World Bank advice, which led developing countries to focus on short-term export-led growth and resulted in many of today’s glutted markets in commodities, from coffee to computer chips. Such short-term strategies, often with tax-holidays, export platforms and reliance on cheap labor, minimum regulations and all the other Washington Consensus policies have led to today’s global “race to the bottom.” In Mexico, some 300 manufacturing plants have moved to China in the past two years.[1] China will soon overtake Mexico as the second largest US trading partner after Canada. China’s labor costs, combined with today’s undervalued renminbe (rmb) are about one quarter of those in Mexico. One cannot blame China, since some 2/3 of all China’s exports to the USA are by US corporations.[2] The longer-term structural focus needed in Mexico must address general education and the skill levels of its workforce to retain its back-office paperwork businesses (still second only to India). Even deeper is the issue that only 1% of inputs to Mexico’s export manufacturing plants are produced in Mexico and little tech transfer occurs in this typical world-trading pattern. Thus, many developing countries, including those like Mexico, in the top tier, are vulnerable to powerful global market rule-makers, corporations, investors and currency speculators they cannot control. ...Article Continued

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