The Bangkok Post Thursday Nov. 12 1998

Mrs Sudjai Mahachai and her family could not imagine life without the Moon River. The river that ran through their province in Ubon Ratchathani gave them fish for their daily meals, and water for their small farm. Nobody at the offices of the World Bank knew Sudjai, her family, or the intimate ways their lives were linked to the river.

When the World Bank granted a loan to the Electricity Generating Authority of Thailand (Egat) to construct Pak Moon Dam, Sudjai knew little about it. Egat and World Bank officials claimed it would improve the lives of those living in the area.

Sudjai and her family lost not only fresh fish from the river, but also their farm. The family scattered to work as labourers at construction sites. When the economic crisis hit Thailand, they became one of the region's jobless millions.

This is the other face of globalisation, one that is often ignored at conferences on trade liberalisation. Last week, however, delegates from 31 countries met in the Philippines to discuss the adverse consequences of the free flow of global trade and investments.

The 100 delegates came from various organisations based in Asia, Latin America, Africa, North America and Europe. The countries represented include Thailand, Nepal, Malaysia, India, the Philippines, Zimbabwe, Canada, France, the United States, New Zealand and the United Kingdom. Gathered at Tagaytay city, these groups examined the complex issue of international trade and found that colonisation, dependent elites, and neo-liberalisation combined to undermine the benefits of globalisation.

After 72 hours, they came to the conclusion that the financial crisis is directly linked to globalisation, and it all began with neo-liberalism.

Neo-liberalism: There are those who feel that the Thai economy will improve only if it opens its markets to goods and investments from other countries. As such, they call for the dismantling of trade barriers and encourage worldwide free trade. On the surface, this seems a utopian concept of democracy in the business arena.

Neo-liberalism means that anyone can buy and sell anything anywhere, and that countries must not protect local businesses from foreign competition. International business becomes dominated by the most efficient, predictable, and well-advertised companies, while cottage industries, small trades, and family businesses are shut down.

In the last decade, the Brazilian economy clearly suffered from the adoption of the neo-liberal model, which calls for an economic policy based entirely on the opening of markets to industrial and agricultural merchandise from countries which are controlled by transnational corporations (TNCs).

Under such a scheme, public resources are widely exploited, not only by large industries that consume cheap raw materials, but also by means of high interest rates paid to finance capital that flows out of poorer host countries, such as Brazil and the Philippines, in the form of royalties paid to TNCs.

"The root cause of Brazil's agrarian problem is the capitalist model of development that was historically adopted by colonised and dependent elites," said Mr Elemar Cerzimbrado Nascimento of the MST farmer movement in Brazil.

Neo-liberalism has destroyed the autonomy of the agricultural sector. The scenario of greater misery and poverty in many of the world's agricultural sectors has not been alleviated.

Agriculture, delegates were told, has less profit sharing compared to other sectors. This is proven by the obvious poverty of farmers from Northeast Thailand to Indonesia's North Sumatra.

Globalisation: To many of the participants, globalisation is defined as the neo-liberal conveyance of monopoly capital to maximise the extraction of profit.

Certainly, globalisation has its positive benefits for those who know how to manage it, such as the use of information technology. However, the political prescriptions of liberalisation, deregulation and privatisation are worrisome.

Everywhere globalisation is eroding social movements, delegates claimed. There is a general regression of democracy. Social and cultural rights deteriorate. Those who are marginalised economically lose political power altogether.

The Sopia family, for instance, lived on a plot of reclaimed land in Manila Bay after being evicted from leased land in a congested area. Now, the family is being evicted again as the construction of Asia World, a new business centre, begins on the site.

As in many other countries, transnational corporations own huge tracts of land all over the Philippine archipelago, while some 70 percent of Filipino farmers are landless, contributing to the problem of worker migration and city congestion, a scenario repeated in many big cities throughout the world.

The MAI: Because of agreements crafted and enforced by such organisations as the International Monetary Fund (IMF), the World Bank (WB) and the World Trade Organisation (WTO), the power of governments to defend their people's rights and welfare is increasingly undermined.

Meanwhile, these organisations use more and more political power to step up the implementation of the neo-liberal prescription of globalisation in the form of national legislation, bilateral agreements with IMF and WB, and multilateral pacts under the WTO regime, among others.

"The IMF, for instance, has prescribed Thailand to impose higher taxation on commodities, as well as to privatise state agencies so that Thailand can return the borrowed money," said Mr Bumrung Khayotha, an adviser to the Forum of the Poor.

But far from approaching a solution, the crisis has threatened to worsen.

The international gathering in Tagaytay is particularly concerned with the way the liberalisation and deregulation drive is being pushed to the limit through the Multilateral Agreement on Investment (MAI). (See details in box.)

Mrs Agnes Bertrand of ECOROPA has actively campaigned against the GATT in France and now coordinates the meetings of various NGOs and social movements against the MAI.

There is rising concern about moves by some OECD governments, including the European Union, to shift the MAI process to the WTO.

Northern countries have recently been pushing very hard for the WTO (including its Working Group on Trade and Investment) to get developing countries to upgrade present "discussions" into full negotiations for an MAI-type agreement.

They hope to get the Working Group to decide on this as early as this month.

"Some of the Northern countries claim this will make it fairer for developing countries and, moreover, environmental and labour concerns will be taken care of in the WTO," said Mrs Bertrand. "We reject these claims."

The strong enforcement capability of the WTO through its dispute settlement system will also mean that all countries, particularly developing countries, will be forced to comply.

"We therefore call on all governments, OECD and the non-OECD alike to reject any proposal to negotiate an investment agreement in WTO," said Mrs Bertrand.

"In short, say NO to MAI."

Mr Martin Kor, director of the Malaysian-based Third World Network, said: "Once we sign the agreement, it means that the government has to abide by that agreement. The MAI is aimed at protecting and advancing the rights of international investors vis-a-vis host governments and the countries."

Foreign investments play a crucial role in developing countries. However, Mr Martin suggested that investment can be positive only if governments retain the right to choose the type of foreign investment and terms of entry and operation.

"We don't oppose foreign investment per se. Rather it is the successful experience of countries that made use of foreign investment that makes us see the importance of controlling the entry, terms of equity and operation of foreign investment," said the Cambridge-educated economist.

Mr Martin's concern over the multilateral agreement for governments in developing countries stems from a precedent Nafta (the North American Free Trade Agreement) case, a problem that emerged as a result of the narrow provisions of its international commercial laws.

For instance, in April, the US company Ethyl Corporation sued the Canadian government for banning the import of gasoline additive MMT, a dangerous toxin.

The company claims the ban violates Nafta provisions and is seeking restitution of US$251 million to cover losses from the "expropriation" of its MMT production plant and company reputation. It claims the ban will reduce the value of its plant, hurt future sales and harm its reputation.

"The Ethyl case is an example of the kind of suits governments could face before international tribunals under the MAI," said Mr Martin.

An outcry from developing countries has received a response from groups such as the French organisation ECOROPA and the New Zealand APEC Monitoring group.

Mr Aziz Choudry of the New Zealand Apec Monitoring group claimed that Apec favours the rich at the expense of the poor, sees no role or rights for indigenous people, and separates economic issues from their social, cultural, labour and environmental effects.

"Apec is not worth it. Say No and Stop Apec," said Mr Aziz.

What can be done?: The Tagaytay conference has called for two specific moves to offset the onslaught of globalisation. First, expose and oppose the MAI to prevent its negotiation with the WTO by launching national and international campaigns immediately. And second, campaign for non-payment by nations in crisis of their loans from the IMF, against the signing of new letters of intent with the IMF, and oppose any new loan conditionalities.

Other groups have also mobilised to examine ways out. The recent International Conference on Alternatives to Globalisation is a closing of ranks of diverse movements and initiatives towards more effective resistance to globalisation.

"We need to replace global imperialism with global democratic governance of the people of the world," suggests Mr Antonio Tujan Jr, the executive director of Ibon Foundation in the Philippines. His strategy to resist globalisation is to empower people.

"Just as globalisation disempowers the people, our responsibility is to harness these displaced productive forces and empower the people to take matters into their hands."

The conference proposed that members take steps to strengthen the capacities of communities to defend themselves against globalisaton.

As Mr Bumrung said, "We, Thai farmers and those underprivileged, realise our own power and we will strengthen our organisations to resist the flow of these global organisations. We hope to call attention to our officials to listen to their people before signing any agreements. Public hearings should be held before signing or implementing any projects which will affect the majority."

Self-sufficiency is the one true alternative to globalisation, said Mr Bumrung. "If every Thai farmer practises self-reliance, we will not need to depend so much on foreign investments," said the Thai farmer.

For Filipino farmers, however, self-sufficiency seemed to have no meaning. "Most of the land now belongs to TNCs. Therefore, I propose agrarian reform," said Mr Danilo Ramos, secretary general of the KMP, farmer movement.

People power has been proven an effective tool against government imposition in various countries, such as the Nepalese Aroon Dam case.

"With people's movements we were able to counter the World Bank policy to grant money to the Nepalese government to build the dam," said Mr Gopal Siwakoti of INHURED, an international rights group.

Mrs Lawan Thanasillapakul, currently a law student at Lancaster University, UK, said: "The MAI is a serious matter, if we cannot totally nullify it, we must amend the substance of the agreement to protect the rights of the developing countries."