III. Towards a Genuine World Economic Governance (since 1995)

A. New Face of the IMF• To compensate for the weakened IMF, a

new Governance Body instigated by the most powerful countries – G6 and later G7 in 1975-1976

• IMF finds new mission: financing third world debt. –Mexican debt crisis– Latin American intervention in 1982-1983

Reforms within IMF and World Bank

• Since 2010, voting rights altered• Gives more power to developing

countries• Decisions taken with a majority of

85% of votes• The United States and the European

Union possess a de facto veto power

Country 1947 2008 2010United States 31.46 16.76 16.5Canada 3.68 2.56Brazil 1.4 2.2 2.2France 6.23 4.29Belgium 2.83 -United Kingdom 15.02 4.29The Netherlands 3.41 2.08Germany - 5.81Italy 2.32 3.16European Union (27 members) 29.4Russia - 2.39 2.5India 4.82 2.34 2.6China 6.52 3.81 6.1Japan - 6.24G7 43.11 41.2Developed countries 57.9 55.3

Voting Rights

with the IMF

B. From the G6 to the G20 (1975-2012)

• Created in 1975 on French initiative to cope with the petroleum crisis

• Slowly enlarged to 7, 8 then 20 members

• Annual summit of heads of state of most powerful economies of the planet

• G20 Defends interests of countries representing 90% of the economy and 2/3 of the world population

Successive Enlargements

G6 (1975)

Germany

United States

France

Italy

Japan

United Kingdom

G7 (1976) Canada

G8 (1998) Russia

G20 (1999)

South Africa

Saudi Arabia

Argentina

Australia

Brazil

China

South Korea

India

Indonesia

Mexico

Turkey

European Union

Criticism of G20

• Lack of policy coordination between the members

• G8 continues to hold the monopoly of power – Only wealthiest nations members– –no room made for emerging nations

• Lots of bureaucratic talk, no action• Promises to change inequalities in

system but nothing done

C. WTO replaces the GATT

• A better organized world trade?–WTO created in 1995 to:– Reinforce free trade internationally• Agriculture, industry, intellectual property

– Promote sustainable development

• Increased disputes and crises– Against the hegemony of the wealthy– Against liberal globalization• Anti/alter-globalization criticizing social &

environmental consequences of current system

RecapDiagram

of World

EconomicGovernance

IV. Economic governance: a southern perspective

• A. Structural Adjustment policy imposed as condition of loans– Very unpopular– Developing countries demand a more

balanced world governance body

Structural AdjustmentSome of the conditions for structural adjustment

can include:• Cutting expenditures, also known as austerity.• Focusing economic output on direct export and resource

extraction, • Devaluation of currencies,• Trade liberalization, or lifting import and export restrictions,• Increasing the stability of investment by supplementing FDI with

the opening of domestic stock markets,• Balancing budgets and not overspending,• Removing price controls and state subsidies• Privatization or divestiture of all or part of state-owned enterprises• Enhancing the rights of foreign investors vis-a-vis national laws• Improving governance and fighting corruption

Which of these policies do you think are the most unpopular with developing countries?

Creation of UNCTAD 1964United Nations Conference on Trade and

DevelopmentResponsible for dealing with development issues, particularly international trade – the main driver of development.– 194 member States,– promote the macroeconomic policies best suited to

ending global economic inequalities – Generate people-centered sustainable development.– offers direct technical assistance to developing countries

helping them to build the capacities they need to become equitably integrated into the global economy

• Video: The Faces of UNCTAD 2013 Symposium 2’20

B. Anti (Alter)-Globalization Movements

• The anti-globalization movement, or counter-globalization movement - critical of the globalization of corporate capitalism. – global justice movement, – alter-globalization movement, – anti-corporate globalization movement, – movement against neoliberal globalization.

• Criticism based on a number of related ideas: – opposition to large, multi-national corporations

having unregulated political power– Opposed to powers exercised through trade

agreements and deregulated financial markets

Mixed-up Priorities• Corporations are accused of seeking to

maximize profit at the expense of :– sabotaging work safety conditions and standards, – labor hiring and compensation standards, – environmental conservation principles, – the integrity of national legislative authority,

independence and sovereignty.

• Misleading term:– Many anti-globalization activists generally call for

forms of global integration that better provide:• democratic representation, • advancement of human rights, • fair trade • sustainable development

The Battle of SeattleNovember 30, 1999

• 2nd major mobilization of the anti-globalization movement

• The protesters and Seattle riot police clashed in the streets after police fired tear gas at demonstrators who blocked the streets and refused to disperse.

Anti-globalization protests in Genoa in 2001 and Edinburgh at the G8 summit

in 2005

World Social Forum

• Created in 2001 supported by the city of Porto Alegre (where it took place) and the Brazilian Workers Party.

• The motivation was to constitute a counter-event to the World Economic Forum held in Dayton at the same time.

• The slogan of the WSF is "Another World Is Possible".

• Periodic meetings: – 2002 and 2003 Porto Alegre - became a rallying point for

worldwide protest against the American invasion of Iraq. – 2004 Mumbai , to make it more accessible to the populations of

Asia and Africa. – 2006 Caracas, Bamako and Karachi (Pakistan). – 2007 Nairobi – 2009 the Forum returned to Brazil, where it took place in Belém– 2011, Dakar – 2014 in Porto Alegre

Occupy Wall Street Movement 2011• Peaceful protest movement denouncing the

abuses of financial capitalism.• began Sept 17, 2011 with 1000

demonstrators near Wall Street in NYC. • A portion of the demonstrators set up

temporary camp in Zuccotti Park, occupying the place in a sort of sit-in.

• Over the next few weeks, several hundred demonstrators lived and slept in the park.

• The movement also spread to other locations around the U.S. where they tended to congregate in public parks.

Statement of the 99 Percent

“We are the 99 percent. We are getting kicked out of our homes. We are forced to choose between groceries and rent. We are denied quality medical care. We are suffering from environmental pollution. We are working long hours for little pay and no rights, if we're working at all. We are getting nothing while the other 1 percent is getting everything. We are the 99 percent.”

Video: What is occupy Wall Street about?

C. Influences of the anti-globalization movements

• Several influential critical works have inspired the anti-globalization movement. –No Logo, the book by the Canadian

journalist Naomi Klein –criticizes production practices of

multinational corporations and the omnipresence of brand-driven marketing in popular culture–"manifesto“ of the movement–Video: An Introduction to Naomi Klein’s

No Logo 7’24

–The writer Arundhati Roy is famous for her anti-nuclear position and her activism against India's massive hydroelectric dam project, sponsored by the World Bank.

ATTAC (Association for the Taxation of Financial

Transactions and for Citizens' Action)

• devotes itself to a wide range of issues related to globalization, monitoring the decisions of the WTO, the OECD and the IMF

• attends the meetings of the G8 with the goal of influencing policymakers' decisions

• recently criticized Germany for what it called the criminalization of anti-G8 groups.

Aims of ATTAC• to produce and communicate information, and to promote and carry

out activities of all kinds for the recapture, by the citizens, of the power that the financial sector has on all aspects of political, economic, social and cultural life throughout the world. Such means include the taxation of transactions in foreign exchange markets (Tobin tax).

• Not an anti-globalization movement, but it criticizes the neoliberal ideology that it sees as dominating economic globalization. It supports globalization policies that they characterize as sustainable and socially just.

• Slogans:– "The World is not for sale", denouncing the “merchandisation" of

society.– "Another world is possible" pointing to an alternative globalization

where people and not profit are in focus

Video: Germany spot – Move your Money Campaign

–Critics of United States foreign policy such as Noam Chomsky, Susan Sontag, and anti-globalist pranksters The Yes Men are widely accepted inside the movement.

–Video: Utopia Susan Sontag, Noam Chomsky 1’25–Yes Men - Bhopal Disaster BBC sp

oof

HomeworkWatch the Isle of Flowers in EnglishPart 1 (6’10)• https://www.youtube.com/watch?v=E3AyWcptRx0Part 2 (6”20)• https://www.youtube.com/watch?v=5yI7STDk5nQAnswer the following questions about the short film:1. Why has the filmmaker chosen to give definitions of

everything? What effect does this have? 2. What makes it shocking? 3. How does the film define freedom? 4. What does the video criticize exactly? Capitalism?

Globalization? Abuse of human rights? Consumerism? Profit-making? Private property?

5. How does the message of this documentary relate to the anti-globalization movement's position of being against the neo-liberal system ?

HomeworkReading Material

Articles to read on blog:– Speech by U.S. Secretary of the Treasury,

2009– G20 The South fights for the South– Inside Occupy Wall Street