By Cecille S. Visto
Business WorldSeptember 12, 2002
Discussions on the adverse effects of globalization must be included in the global agenda of the World Trade Organization (WTO) before further negotiation on trade-related issues could commence, various groups attending a dialogue on the social dimension of globalization said. In the home front, they said government must be more perceptive to the fact that threats of globalization far outweigh its supposed benefits.
During a whole-day policy dialogue yesterday, labor and business group as well as nongovernment organizations (NGOs) agreed that since globalization could no longer be arrested, the best the government could do is to lessen its negative impact.
Most of the 80 sectoral representatives who participated warned of the expansion of the informal sector with the expected closure of industries following full trade liberalization. The death of industries due to uncompetitiveness, they said, could prove expensive for the government which will be forced to subsidize the informal sector. "We are apprehensive that liberalization will eventually lead to global monopoly or oligopoly. Homegrown industries could never compete and die while big companies will continue to become bigger," said Philippine Rubber Association's Alfredo de Leon.
"While we have liberalized goods and capital, we have not liberalized services," added Federation of Philippine Industries (FPI) executive director Joseph Francia. He also said that liberalization of services could be the key in obtaining the full benefits of economic globalization.
The call for a more cautious and deliberate economic integration with the rest of the world was supported by no less than a member of a world commission studying the impact of the new world economy on common citizens. Victoria Tauli-Corpuz, member of the World Commission on the Social Dimension of Globalization, admitted the Philippines will never be ready if rules are not ironed out. "The (WTO) rules must adopt to the environment we are in...We are not ready," said Ms. Corpuz, the only Filipino in the commission formed in February.
The commission is tasked to raise awareness on the social effects of globalization by bringing together the viewpoints of stakeholders, which, it said, has not been successfully accomplished by previous independent commissions. "Much of the previous discussions on globalization has been fragmented and confrontational.
The commission wants to find a common ground by which problems could be addressed," said Michael Henriques, director of the job creation and enterprise development center of the International Labor Organization (ILO) based in Geneva, Switzerland. While the commission is an independent body, ILO is assisting it in ensuring that the world report that it will come up with will be recognized by the United Nations, WTO and other foreign governments.
The report will be finalized after consulting 18 selected developing countries. The Philippines is the third country where the policy dialogue is conducted.
While industry and labor representatives hammered on the disadvantages of global economic integration, government officials and representatives of multilateral financial institutions vigorously defended it. Wilhelm Ortaliz, planning head of the Philippine Economic Zone Authority (PEZA), said industries will continue to sleep on its obligation to foster competitiveness if the government continues to insulate them.
World Bank manager for operations and country services Christian Rey, for his part, insisted players should look at both sides of the globalization issue. "Globalization has long started. Countries which have attracted investments were those that went with the flow," he said. He noted that in the case of Mauritius, which had a per capita income of only less than $500 30 years ago, its deliberate effort to attract investments resulted in the resurgence of its economy. Its citizens now enjoy per capita income of some $1,600.
"Globalization is competition, reorganization. We have to specialize and to mobilize industry," he said. At the end of the day, various Filipino groups rose to the challenge of providing concrete proposals on "how the democratic world could be reshaped."
Ms. Corpuz said the world report, which is expected to be finalized next year, will not have any binding legal effect on the powerful economies that dictate world trade. "But at the very least, it will have moral and awareness-raising effects... The report will hopefully persuade governments that there is more to gain than lose in implementing the recommendation," she said.
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