Undeveloped Countries Fail to Benefit From Open Markets, Leaders Say : UN Seeks a New Framework for Trade
International Herald Tribune
February 14, 2000
Thomas Crampton

The world's least developed countries have not benefited from free trade, and globalization is making the gap between the poorest nations and the rest of the world grow larger, leaders at a UN conference here have said.

"What we urgently need is a new framework — a new global order — to sustain a global consensus on open markets and moderate its worst excesses," Goh Chok Tong, prime minister of Singapore, told the United Nations Conference on Trade and Development over the weekend. "Social dislocations created by globalization may be too lightly dismissed as the unavoidable consequence of change."

The week-long Bangkok conference has been billed as a follow-up to World Trade Organization talks held late last year in Seattle that were disrupted by street protests.

Apart from a morning pie slapped on the face of Michel Camdessus, managing director of the International Monetary Fund, riot police and tight security in Bangkok kept protests to a minimum. Only about 300 protesters managed to gather near the conference on Sunday carrying banners asking for "Fair trade, not free trade."

The UN secretary general, Kofi Annan, blamed developed countries — not street protesters in Seattle — for that meeting's failure to launch a new round of trade talks.

"The round was not launched because governments — particularly those of the world's leading economic powers — could not agree on their priorities," Mr. Annan said. Developing nations, many of which have not benefited from the benefits of globalization, need the help of a "Global New Deal," he said.

A report released Sunday at the conference said that the world's 48 poorest countries have failed to benefit from free trade.

The countries, which accounted for about 13 percent of the world's population in 1997, had about a 1 percent share of world trade in that year. This was a decline of about 40 percent since 1980, according to a report released by the United Nations Conference on Trade and Development.

The number of countries categorized by the United Nations as extremely poor has risen to 48 from 25 since 1971 and during that period, just one country — Botswana — graduated from the list.

"It is clear we are now in a two-track world with the middle countries doing a good job of integration, while the poorest countries are stuck on the fringe and falling further out," said Mark Malloch Brown, administrator of the United Nations Development Program.

There is real danger, Mr. Goh said, that pressures and dislocations brought by globalization could bring political and military fallout.

"The world could also fragment into different blocs of free-trade areas," Mr. Goh said. "The tensions bred by marginalization, inequality and the breakdown of free trade and competition between economic blocs will invariably have political and military consequences."

Globalization and market economics are inevitable, Mr. Goh said, but a balance must be struck between economic and social objectives.

Another pitfall of globalization is recent megamergers that are creating monopolistic global companies that can no longer be controlled with national laws, said Mahathir bin Mohamad, prime minister of Malaysia.

"A situation of worldwide oligopoly seems already to be emerging," Mr. Mahathir said. "If market forces are allowed free play then oligopolies may end up as monopolies." Unfettered by the laws of any one country, such multinationals will slip between the cracks created by the global economy, Mr. Mahathir said.

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