Real costs of globalization

Catholic New Times, Dec 18, 2005 by Cristina Vanin

In a recent opinion piece for the National Catholic Reporter, Bishop Alvaro Ramazzini of Guatemala laments the passage of the Central America Free Trade Agreement (CAFTA) by the U.S. Congress, an agreement passed in Guatemala's Congress last March. Opposition to CAFFA derives, in part, from an analysis of the effects of NAFTA on Mexico: 1.5 million displaced peasant farmers forced to look for industrial jobs; Mexican wages dropping by 20 per cent; communities and families tom apart as people lost their livelihoods and tried to make their way into the U.S. Bishop Ramazzini argues that CAFTA will solidify the structural adjustment programs that have already been so disastrous for countries like Guatemala. The logic of these economic programs is based on profit, not human rights or sustainability.

What benefits can come for Guatemalan workers when CAFTA rolls back the stronger labour rights requirements existing under current U.S.-Central America trade law? What will become of the 60 per cent of Guatemala's population that lives in small farming communities when CAFTA allows the dumping of subsidized food exports into our countries? And what can a priest say to the family of a person iii with HIV-AIDS for whom the generic antiretroviral medicines forbidden by CAFTA's rules are the only hope?

David Korten, an economist who formerly worked in Asia for the United States Agency for International Development and for the Ford Foundation's development programs, reminds us that these unjust economic policies date back to the 1930's when the U.S. Council on Foreign Relations thought that U.S. national interests required free access to markets and raw materials across the globe and called for the creation of worldwide financial institutions. At the UN Monetary and Financial Conference, held in Bretton Woods in 1944, the groundwork for the World Bank, International Monetary Fund and GATF were established. The desire was to build a world economy, 'in which peoples of every nation (would) be able to realize their potentialities in peace and enjoy increasingly the fruits of material progress on an earth infinitely blessed with natural riches.'

Since Bretton Woods, there has been economic growth; in fact, a fivefold expansion, along with a twelvefold expansion of international trade. At the same tittle, there are more poor people than ever before, the gap between rich and poor continues to accelerate and violence is more widespread. Korten points to some flawed operating assumptions that contributed to this failure to achieve peace and prosperity for all: (1) economic growth and enhanced world trade would be of benefit to everyone; (2) prosperity has no limits. Furthermore, as Mary Evelyn Tucker reminds us, there are more costs to be identified.

It is becoming increasingly clear that the environment emerges as a key issue that will determine all others. For without a healthy biosphere that can sustain ecosystems and nurture life in its myriad forms, all other issues remain secondary. If the life support systems are destroyed irreparably, water shortages increase, food supplies decrease, fisheries are depleted, forests are clear-cut and topsoil lost, there will be no lasting security, and military violence or terrorism will erupt. This issue becomes ever more urgent as the environment continues to deteriorate radically and rapidly in many parts of the world.

Despite such evidence, international economic institutions, and governments, continue to insist that the answer to poverty and ecological deterioration is economic growth. And today, the key to such economic growth is globalization, i.e., the removal of economic borders so that there can be a free flow of goods and money. The alternative? Korten suggests it lies "in promoting greater economic localization breaking, economic activities down into smaller, more manageable pieces that link people who make decisions in ways both positive and negative. It means rooting capital to a place and distributing its control among as many people as possible."

Even more so, the future lies with the awareness articulated in the UN Earth Charter: 'we must recognize that ... we are one human family and one Earth community with a common destiny.' A future of peace requires the realization that our common future rests on the health of our common ground, the Earth itself, because, ultimately, our human economies are dependent on the natural ecosystems of our planet.

Cristina Vanin teaches in the Department of Religious Studies and is Director of the Master of Catholic Thought program at St. Jerome's university in Waterloo, Ont.