Historical archive

Globalisation and the social dimension, Prepared comment

Historical archive

Published under: Bondevik's 2nd Government

Publisher: Ministry of Foreign Affairs

Anne Beathe Kristiansen, President of the Norwegian Centre Youth

Globalisation and the social dimension, Prepared comment

Oslo, 27 November 2001

Some claim that economic globalisation promotes human rights, because those who want to compete in the world market will have to adapt to the global rules of the game, with more focus on environmental and social issues. Up till now we have seen the opposite: Those who can, will shift the cost on to the environment and the labourer.

Much indicates that especially the multinational corporations are a threat to both democracy and welfare. The main actors in the market become more and more powerful. In principle they are totally independent from political control. Multinationals influence social development to a much greater extent than politicians and governments.

What happens when the most vital decisions for global development take place in the boardrooms of Shell, Nestlè or Statoil? I could speak a great deal about what happens to the feeling of impotence among youth, and the new global movement of opposition.

However, today I will speak of the social dimension of the corporate-led globalisation. What happens when profit rules, instead of the consideration of longterm moral consequences of ones choices?

The optimists - and the businesses themselves of course- name several reasons why the public can trust their moral decisions. They say that todays consumers are well-informed and conscious, and that to ignore the moral aspects of production would mean loosing marketshare. Also, they talk about how businesses operate in a global goldfish bowl. NGOs, mass media and consumers keep an eye on them. Besides, the interaction between environmental and social NGOs is closer and more frequent. There is a constructive dialogue instead of quarreling. Bellona is an example of this development. Also, there are lots of examples of corporations engaged in social development projects in the 3. world. Burger King, f.x, has contributed to educate 50.000 poor children.

There ARE positive trends regarding the efforts to empazise the businesses´ moral responsibility. However, I believe there are several breaches to the argument that the market can regulate everything - even the moral considerations of the boards of big businesses. That the fight for corporation marketshare is a guarantee for social responsibility.

Are todays consumers really that well informed? My impression is that we basically care about price - to a certain extent quality - but not much about standards of production. The child labour of India is too far away. I don`t recognize the image of a global goldfish bowl. As an average consumer I have no way of obtaining information about the way Nike or Coca-Cola treat their employees in the 3. world. I don`t believe that f.x Bjørn Dæhli was aware of the fact that the workers of the factory where his clothes collection was produced, lived basically as slaves.

As to NGOs cooperating with economic life; it is not hard to find examples of NGOs having been annexed, loosing their sting. Even in an organization like my own, there is a constant dilemma whether to keep the good tone of dialogue or to go public with unpleasant cases.

How about the social involvement of large corporations in the poor world? Providing schooling for poor children is definetely praiseworthy, but can easily become an alibi when continuing to underpay workers in the same area. It can easily become an indulgence.

Businesses use moral as a means to earn more money. That should make us alert. In Norway the NHO (Norwegian Business and Industry) pushes the ethical considerations - basically aiming at making norwegian businesses more competitive. In NHO pamplettes they argue for minding morals and ethics because it will improve the reputation of the business - and thereby raise the profitability.

The showing of a moral profile often appears as clumsy demonstrations of noble character. Consumers are up to those tricks.

The dramatic changes in world economy have undoubtedly led to increased production. Global consume is 6 times what it was 50 years ago. But we also know, beyond doubts, that this growth has many sides and that it is unevenly distributed, as shown very clearly in the UNDP Human Development Report of 1999. This is a fact that the enthusiasts of globalisation don´t care to mention very often. In many parts of the world there is growth without employment, there is a ruthless growth that takes place accompanied by increased poverty and increased differences. 1 billion people have seen their incomes redused between 1980 and 1995. The integrated financial markets have proven it´s weaknesses. After the crises in Asia, 40 million people in Indonesia - 20% of the population - sunk in poverty during 1998, according to an ILO report. In South-Corea, unemployment trippeled in one year.

While The USA and Norway pushes for social provisos in the WTO, workers in all countries are being pushed to the edge, due to the very logic of the free trade system. Is it not the very economical system, which the WTO is an important part of, that forces countries to provide a "dynamic and flexible labourmarket", including even child labour in some parts?

We do not know enough about how the economic globalisation affects the social dimension.

The developing world has urged for an evaluation process in the WTO to asess the social consequences of free trade before further liberalisation. That has been supported by several thousands NGOs all over the world. My hope is that the norwegian government will lend an ear to the development world - and slow down.