INTRODUCTION
The Scandinavian and the s o - c a l l e d "like-minded" c o u n t r i e s in
g e n e r a l , h a v e earned a reputation for being among the most
" p r o g r e s s i v e " c o u n t r i e s of the Northern Hemisphere in dealing
with the d e v e l o p i n g s o u t h .
T h i s r e p o r t will take a critical
look at this r e p u t a t i o n , which we believe is only partially
deserved.
T h e r e p u t a t i o n , it would seem, h a s been gotten from a
v a r i e t y of s o c i a l , economic, and political s o u r c e s . The social
fabric of these c o u n t r i e s is, r e l a t i v e l y e g a l i t a r i a n , although
c l a s s contradictions and conflicting g r o u p i n t e r e s t s still e x i s t .
T h e y a r e "mixed economies" with a r e l a t i v e l y wide s u p p o r t for
public intervention in the economy.
In the c o n t e x t of the
NIEO d e b a t e , important political factions draw analogies from
these domestic equalizing and public r e g u l a t o r y p r o c e s s e s to
the international s y s t e m :
What is a c h i e v e d domestically must
be to the l a r g e s t possible e x t e n t a c h i e v e d internationally. One
question is whether t h e r e r e a l l y i s public s u p p o r t for s u c h
international solidarity a n d , if s o , to what e x t e n t .
In their foreign p o l i c i e s , Scandinavian countries follow
different p a t h s due to their r e s p e c t i v e s t r a t e g i c geopolitical
positions in the East-West c o n t e x t .
With r e g a r d to their
policies toward d e v e l o p i n g c o u n t r i e s , the Scandinavian g o v e r n ments jointly h a v e come out r e l a t i v e l y s t r o n g l y in s u p p o r t of
decolonization and the liberation movements in A f r i c a , and in
denouncing
apartheid.
T h e i r development aid
policy is
illustrated by the fact that Sweden and Norway now r a n k on
top of the DAC list of industrialized donor countries in terms
of the p e r c e n t a g e of GNP channeled as official development
a s s i s t a n c e , a position t h e y s h a r e with the N e t h e r l a n d s . A l s o ,
WESTERN EUROPE AND THE NIEO
46
the S w e d i s h - N o r w e g i a n " a x i s " has come to form the b a c k b o n e ,
with the D u t c h , of the like-minded c o u n t r i e s of the n o r t h .
T h i s g r o u p i n g was formed d u r i n g p r e p a r a t i o n s to the 1975 7th
Special Session of the UN General A s s e m b l y . It made its first
major demarche t h r o u g h the initiative taken at UNCTAD IV and
r e s u l t i n g In" TS mostly minor industrialized c o u n t r i e s v o t i n g in
favor of Resolution IV (93) on the I n t e g r a t e d Program for
commodities.
Despite these f a c t s , to which we shall r e t u r n , why is the
" p r o g r e s s i v e " reputation of t h e s e countries partially u n d e s e r v e d or at least e x a g g e r a t e d ?
S c a n d i n a v i a is economically
and c u l t u r a l l y closely i n t e g r a t e d with the Western w o r l d . The
question therefore is whether the economic b a s i s of the
Scandinavian societies is so fundamentally' capitalist and so
much a p a r t of the "international division of labor" established
by the economic p o w e r - h o u s e s of the capitalist N o r t h , that
both capital and the state in these c o u n t r i e s are bound to
follow the logic of the s y s t e m ? In other w o r d s , the economic
s t r u c t u r e p u t s absolute limits on what these c o u n t r i e s can do
with their international e n v i r o n m e n t s .
If s u c h a view is
c o r r e c t , it follows that w h a t e v e r p r o g r e s s i v e image is p o r t r a y e d internationally is mostly due to a political and cultural
system which on the one hand r e f l e c t s a certain ideological
tradition (socialist internationalism) and on the o t h e r r e p r e s e n t s c e r t a i n internal p r e s s u r e g r o u p s and idealistic factions
within public opinion.
An a l t e r n a t i v e h y p o t h e s i s would be that the combination
of economic realism and political idealism, which is what we
e x p e c t to f i n d , is d e l i b e r a t e or i n e v i t a b l e .
It is deliberate in
the sense that the S c a n d i n a v i a n s h a v e chosen the path that
can be d e s c r i b e d as the "Peer G y n t a p p r o a c h . " T h i s a p p r o a c h
is named after the main c h a r a c t e r in the famous Ibsen play
.who, when faced with a dilemma, followed the "realist" choice
of his companions, but made it clear that he "protested to the
whole world" while doing s o , knowing there was an a l t e r n a t i v e
"idealist choice.
It is inevitable that the Scandinavian s t a t e s ,
r e p r e s e n t i n g r e l a t i v e l y small economies, h a v e no choice but to
accommodate themselves to the dominant t r e n d s and actors in
the
international system with which they a r e i n t e g r a t e d .
We s u g g e s t that there are five basic o b s t a c l e s to the
implementation of the NIEO.
T h e first and most basic is the
c o n s i d e r a b l e d i s c r e p a n c y between words and d e e d s .
Second,
this d i s c r e p a n c y a r i s e s from the need to accommodate v a r i o u s
factions of society p u r s u i n g different i n t e r e s t s .
Third,
Scandinavian c o u n t r i e s h a v e to adapt to their international
environments.
T h e r e is some truth in the allegation, often
r e p e a t e d by r e p r e s e n t a t i v e s of both state and b u s i n e s s , that
these c o u n t r i e s cannot a c t i v e l y implement the written principles
of the NIEO as long as o t h e r and more powerful industrialized
c o u n t r i e s do not do the same in multilateral! y a g r e e d upon
1
SCANDINAVIA/LIKE-MINDED COUNTRIES
47
schemes.
We w i s h , h o w e v e r , to e x p l o r e whether this is
n e c e s s a r i l y t r u e under all c o n d i t i o n s .
F o u r t h , another possible obstacle to the implementation of
the NIEO in the context of S c a n d i n a v i a , is the insufficient
information on and a w a r e n e s s of the NIEO i s s u e s among the
public.
Furthermore, t h e r e is still a lack of s t r o n g political
s u p p o r t among the informed public to e n s u r e that practice
follows the e s p o u s e d p r i n c i p l e s .
T h e s e h y p o t h e s e s coincide in
part with the first obstacle that assumes that a d i s c r e p a n c y
a r i s e s from the need to accommodate contradicting i n t e r e s t s ,
although they b r i n g in additional factors as well.
Fifth, the effect of the European economic c r i s i s is to
p o s t p o n e , or work a g a i n s t , the NIEO.
P r e s e n t l y , most people
in the like-minded countries of Europe seem to be concerned
with the economic c r i s i s and with unemployment at home r a t h e r
than with the c r i s i s of the NIEO.
In one v e r s i o n of the
unequal e x c h a n g e t h e o r y , the obstacle to justice in the world
economy is not only capital, b u t also labor in industrialized
countries.
Instead of r e o r g a n i z i n g their foreign economies to
meet NIEO demands, the industrialized countries re-emphasize
the unequal international division of l a b o r , although doing so
in new forms.
T h e s e are some of the q u e s t i o n s and h y p o t h e s e s to which
the p a p e r will a d d r e s s itself.
It will do so by r e v i e w i n g the
main NIEO i s s u e s according to the attention paid by v a r i o u s
g r o u p s to them, the political s u p p o r t for the NIEO p r i n c i p l e s ,
and the main o b s t a c l e s to Implementing the p r i n c i p l e s .
Information has been collected from a v a r i e t y of s o u r c e s ,
i n c l u d i n g public statements, statistical material, information
through unstructured interviews,
and o t h e r s .
With this
material the first section documents and d i s c u s s e s stated
policies on the NIEO g i v i n g special attention to the policies of
Norway and S w e d e n r e g a r d i n g the NIEO.
T h e selection of
Norway and Sweden seems to be warranted for other reasons
as w e l l .
Denmark has been a member of the European Community only since 1973; and Finland's and I c e l a n d ' s relations
with d e v e l o p i n g countries h a v e e v o l v e d much l e s s than those of
the o t h e r t h r e e .
In the second s e c t i o n , the main o b s t a c l e s to the NIEO in
the two Scandinavian c o u n t r i e s will be identified and d i s cussed.
In the third and final s e c t i o n , some alternative w a y s
are s u g g e s t e d that Scandinavian and like-minded c o u n t r i e s may
c o n s i d e r should multilateral n o r t h - s o u t h agreements on e s tablishing the NIEO not be .forthcoming.
48
WESTERN EUROPE AND THE NIEO
RELATIONS BETWEEN S C A N D I N A V I A N COUNTRIES
AND THE THIRD WORLD
Trade
High l e v e l s of e x p o r t s and imports, t a k e n as a share of g r o s s
national p r o d u c t , is a common feature of small industrialized
nations, s u c h as the Scandinavian c o u n t r i e s .
T h e y are open
economies, a c h a r a c t e r i s t i c t h e y s h a r e with many d e v e l o p i n g
countries.
The increase in Scandinavian foreign trade in the
period after 1960 w a s , h o w e v e r , not quite as s t r o n g as the
r e s t o f the w o r l d ' s (see table 4 . 1 ) .
Their countries' share of
world e x p o r t s was 4.5 p e r c e n t in 1 9 7 5 , as compared with 4.7
p e r c e n t in 1962.
In 1976 the total trade between Scandinavian
c o u n t r i e s and the T h i r d World amounted to $6.1 billion, of
which $5 billion was the s h a r e of import and e x p o r t .
Since 1960, Norway has had a substantial and steadily
i n c r e a s i n g import s u r p l u s in t r a d e with d e v e l o p i n g c o u n t r i e s .
In 1976, 11 p e r c e n t of the imports came from d e v e l o p i n g
c o u n t r i e s , and 12 p e r c e n t was e x p o r t e d to them. H o w e v e r , if
we ignore oil i m p o r t s , it a p p e a r s that the d e v e l o p i n g c o u n t r i e s '
s h a r e of N o r w a y ' s total imports declined from about 9 p e r c e n t
in 1960 to somewhat o v e r 6 percent in 1974.
This s h a r e is
v e r y low compared with the a v e r a g e for the industrialized
OECD c o u n t r i e s (approximately 19 p e r c e n t in 1 9 7 5 ) . .
In the case of S w e d e n , the, trade with d e v e l o p i n g c o u n t r i e s d e c r e a s e d d u r i n g the 1960s and the beginning of the
1970s.
From 1974, h o w e v e r , there h a s been a substantial
increase.
In 1976 the d e v e l o p i n g c o u n t r i e s ' part of Swedish
imports r e a c h e d 13 p e r c e n t and 14 p e r c e n t of e x p o r t s .
For
S w e d e n , e x p o r t s to d e v e l o p i n g c o u n t r i e s are as important as
e x p o r t s to North America, Japan, A u s t r a l i a , and New Zealand
put t o g e t h e r .
Developing c o u n t r i e s h a v e had a r e l a t i v e l y small share in
Finnish foreign t r a d e , v a r y i n g from 12 percent in the mid1950s to 6 p e r c e n t in the mid-1960s.
During the 1970s, the
d e v e l o p i n g c o u n t r i e s ' s h a r e has been steadily g r o w i n g .
This
c o n c e r n * first of all imports, which h a v e increased from 5.4
percent in 1970 to 11 p e r c e n t in 1977.
For all the Nordic
c o u n t r i e s s u c h i n c r e a s e s may be explained by the rise in the
price of o i l , although for Finland, oil imports from the Soviet
Union play an essential r o l e .
E x p o r t s to d e v e l o p i n g countries
have o n l y risen from 6.6 p e r c e n t in 1970 to 7 . 7 percent in
1977.
As an a v e r a g e for the Nordic c o u n t r i e s , trade with the
Third World in 1976 r e p r e s e n t e d 1 2 . 1 percent for imports and
1 1 . 0 p e r c e n t for e x p o r t s .
SCAN DIN A VIA/LIKE-MINDED COUNTRIES
49
Table 4 . 1 . The Stand of the Scandinavian C o u n t r i e s on
C o n c r e t e Proposals(a) P r e s e n t e d by the Group of 77
Developing C o u n t r i e s C o n c e r n i n g the New International
Economic O r d e r ( b )
(a) T h e enumeration is based on the following v o t e s :
on the economic r i g h t s and obligations of the s t a t e s :
A r t . 2a, 2b, and 2c, A r t . 6, A r t . 26.
Charter
A r t . 1,
T h e Lima declaration and the action program concerning
industrial development and cooperation: A r t . 1 9 , A r t . 32, A r t .
33, A r t . 47, A r t . 59 ( i ) . A r t . 60 (e) and ( f ) , A r t . 61 ( e ) ,
A r t . 76, on the whole declaration.
[Transnational C o r p o r a tions and Expansion of T r a d e in Manufactures and Semimanufactures, r e s . 9 7 ( i v ) , U N C T A D I V ] ,
(b)
T h e table is quoted from Holm, 1979, p. 5
Source:
Bo Huldt, T h e Nordic C o u n t r i e s and the NIEO: C o n s e n s u s and Dissension within the Nordic G r o u p , LuncTj
1978.
Report from the Danish delegation t o U N I D O ' s
Second General Conference In Lima March 12-26, 1975,
Copenhagen:
T h e Ministry of Foreign A f f a i r s , 1975.
P r o c e e d i n g s of the United Nations Conference on
T r a d e and Development, Fourth Session, Nairobi, May
5 - 3 1 , 1976, New Y o r k : United Nations. 1977.
50
WESTERN EUROPE AND THE NIEO
P O L I T I C A L AND C U L T U R A L RELATIONS
The e x t e n t of political relations with the T h i r d World is well
indicated by the establishment of permanent diplomatic missions.
In 1978, S w e d e n had permanent missions in 42,
Denmark in 35, Norway in 17 and Finland in 20 d e v e l o p i n g
countries.
Diplomatic missions are usually e s t a b l i s h e d in the
major t r a d i n g p a r t n e r c o u n t r i e s and the major r e c i p i e n t s of
development a s s i s t a n c e and cooperation.
During the 1970s there was a rapid g r o w t h in Nordic
diplomatic missions in the Near E a s t .
The trend may be
explained by the i n c r e a s e d political and economic influence of
the oil p r o d u c i n g c o u n t r i e s .
T h i s explanation also applies to
the g r o w i n g number of diplomatic missions in other p a r t s of
the w o r l d .
T h e r e l a t i v e l y low number of permanent missions
for Norway and Finland is to some e x t e n t offset by a high
number of non-permanent diplomatic missions and by a c creditation to n e i g h b o r i n g c o u n t r i e s .
The Nordic c o u n t r i e s
t h u s h a v e established diplomatic relations with most of the
developing countries.
B e s i d e s a g r e e m e n t s with some Mediterranean c o u n t r i e s and
with India, C u b a , and C h i n a , c u l t u r a l relations with d e veloping c o u n t r i e s is still poorly d e v e l o p e d .
T h i s may be offset to some e x t e n t by more intense
cultural e x c h a n g e s in the p r i v a t e and semi-public s e c t o r s .
Radio and television in all Nordic c o u n t r i e s are a state-owned
monopoly i n s t i t u t i o n .
The s h a r e of n e w s and c u l t u r a l l y
relevant programs concerning developing countries, produced
by institutions or i n d i v i d u a l s in these c o u n t r i e s , is not g r e a t ,
however.
NIEO-RELATED POLICIES OF THE S T A T E AND MAIN
INTEREST GROUPS
General Positions
All five Nordic c o u n t r i e s have stated their g e n e r a l support for
NIEO p r i n c i p l e s in multilateral e n c o u n t e r s , notably in the
United
Nations.
Sweden
had
been the most o u t s p o k e n
Scandinavian c o u n t r y in s u p p o r t i n g NIEO demands d u r i n g the
first round of c o n f e r e n c e s d u r i n g the period of 1974-1976,
followed closely by N o r w a y .
Denmark was somewhat more
reticent.
T h i s p a t t e r n was r e v e a l e d in a s t u d y of Nordic voting
behavior in almost 20 roll-calls at t h r e e different s e s sions.(1,2)
After a period of e a r l y e n t h u s i a s m , h o w e v e r ,
d i f f e r e n c e s between the countries have become smaller in
SCAN DIN A VIA/LIKE-MINDED COUNTRIES
51
recent y e a r s .
What most likely has h a p p e n e d is that the
S w e d i s h and Norwegian " p r o g r e s s i v e spirit" has been mode r a t e d , a function both of e x t e r n a l factors - the political and
economic c r i s e s - and the way important factions of the
economic i n t e r e s t g r o u p s and public opinion h a v e reacted to
the NIEO m e s s a g e .
All five countries h a v e s t r e s s e d , in v a r i o u s forms, their
support for i n t e r d e p e n d e n c e , their own role of a mediator, and
their willingness to make concessions and cooperate without
political s t r i n g s a t t a c h e d .
It is thus probably c o r r e c t to say
that their policies, as they like to draw them, are not only
more p r o g r e s s i v e than those of most of the other industrialized
c o u n t r i e s , but also somewhat more incoherent.
T h e best
example of i n c o h e r e n c e is probably found in official Norwegian
policy.
In what is still the main e x p r e s s i o n of state policy
toward the d e v e l o p i n g countries in Norway, Parliamentary
Report no. 94 ( 1 9 7 4 - 7 5 ) , on N o r w a y ' s economic dealings with
d e v e l o p i n g c o u n t r i e s , a d e p e n d e n c y relationship is reflected
when it is stated that the d e v e l o p i n g countries
still find themselves in a position of economic
d e p e n d e n c e on the rich part of the world t h r o u g h a
system of ownership c o n t r o l , division of labour and
power which e f f e c t i v e l y p r e v e n t s them from attaining
full economic and social i n d e p e n d e n c e ,
( p . 9)
A similar, b u t l e s s p r o n o u n c e d , view is e x p r e s s e d by the
S w e d i s h government in its r e p o r t ,
Guidelines for S w e d e n ' s
international development policy ( 1 9 7 8 ) , where it is stated that
for Sweden it is s e l f - e v i d e n t that we must
acknowledge the fundamental lack of balance in
the relationship between poor and rich c o u n t r i e s ,
( p . 73)
In the Norwegian parliamentary r e p o r t , t h e r e is also manifest
s u p p o r t of the view that there is a causal relationship between
development and wealth in the n o r t h , underdevelopment and
p o v e r t y in the s o u t h .
In many w a y s we (Norway) are reaping the
benefits of an economic system which s e t s its mark
on the relations between the rich and the poor
c o u n t r i e s , ( p . 13)
and the r e p o r t g o e s on to criticize the p r e s e n t o r d e r in rather
unmistakable terms:
It is r e c o g n i z e d that the e x i s t i n g international
economic s y s t e m p r o d u c e s e f f e c t s which are d e t r i -
52
WESTERN EUROPE AND THE NIEO
mental to the l e s s d e v e l o p e d c o u n t r i e s .
T h e free
market mechanism h a s not led to equitable r e s u l t s ,
but has on the c o n t r a r y s e r v e d to widen the
d i s p a r i t y between the r i c h and the poor c o u n t r i e s ,
( p . 26)
T h i s s t r u c t u r a l - s y s t e m i c c r i t i q u e is not e x p r e s s e d as clearly
by any of the o t h e r Nordic c o u n t r i e s .
It has r e a p p e a r e d in
the S w e d i s h Social Democratic P a r t y ' s statement on the Swedish
Guidelines and in later statements by Norwegian o f f i c i a l s . One
g e t s the impression, h o w e v e r , that the s t r u c t u r a l - s y s t e m i c
critique has b e e n modified o v e r the last two or t h r e e y e a r s ,
e s p e c i a l l y in N o r w a y .
I n s t e a d , more emphasis is put on the
need for internal r e d i s t r i b u t i o n initiated by n e c e s s a r y s o c i o political reforms in the d e v e l o p i n g c o u n t r i e s t h e m s e l v e s .
But
instead of siding e n t i r e l y with those r e p r e s e n t a t i v e s of
d e v e l o p e d c o u n t r i e s who h a v e c o n c e n t r a t e d on the i s s u e s of
basic n e e d s - a p p a r e n t l y p a r t l y in o r d e r to deliberately weaken
the NIEO demands - they a r e t r y i n g to s t r i k e a balance
between the NIEO and basic needs p o l i t i c k i n g .
In the words
of the S w e d i s h g o v e r n m e n t
We must continue to g i v e s t r o n g s u p p o r t to the
ideas behind a new international economic o r d e r , at
the same time as we stick to the demand that improvements (internationally) should be at the benefit
of the poor p e o p l e ,
( p . 73)
T h i s is worded more s t r o n g l y by the S w e d i s h Social Democrats,
p r e s e n t l y in opposition, in terms of a c r i t i q u e :
T h e unjust d i s t r i b u t i o n of power and r e s o u r c e s
in d e v e l o p i n g c o u n t r i e s (is) part of the inequality more to those who already h a v e - which the i n t e r national capitalist s y s t e m e n f o r c e s .
( p . 3 in Motion
1 9 7 7 / 7 8 , 1912)
T h e emphasis on mass-oriented development s t r a t e g i e s in the
d e v e l o p i n g c o u n t r i e s is not a new idea to the Nordic g o v e r n ments.
Since the e a r l y 1970s the S w e d e s , and later the
N o r w e g i a n s , h a v e s t r e s s e d that development aid policies should
f a v o r c o u n t r i e s which c o n d u c t a "socially just" s t r a t e g y of
r e d i s t r i b u t i o n , and that special emphasis is to be put on
development actions which favor the poorest s t r a t a .
Thus
their emphasis on domestic development p r o g r a m s is based on
political decisions taken before the NIEO became an i s s u e ,
although t h e r e may h a v e been some c h a n g e of v o c a b u l a r y and
emphasis since the NIEO was offset by the s t r a t e g y r e g a r d i n g
basic n e e d s by the Western p o w e r s .
SCAN
DIN
A
VIA/LIKE-MINDED
COUNTRIES
53
Both Finland and Denmark h a v e taken part in d i s c u s s i o n s
c o n d u c t e d within the like-minded industrialized c o u n t r i e s .
T h e y h a v e , h o w e v e r , been r a t h e r p a s s i v e p a r t n e r s ; the core
of the g r o u p has remained the N e t h e r l a n d s , S w e d e n , and
Norway.
Danish participation is conditioned by the e x t e n t to
which the Netherlands and Belgium, two members of the
like-minded g r o u p that are also members of the E E C , can side
with like-minded p o s i t i o n s .
As these two c o u n t r i e s seem to
h a v e moderated their a c t i v e i n t e r e s t in the like-minded g r o u p ,
Denmark also has taken l e s s i n t e r e s t .
Denmark's position on the NIEO has been influenced
mainly by t w o , p o s s i b l y t h r e e , f a c t o r s : the economic c r i s i s ;
the need to accommodate to a n d , in case of a conflict of
i n t e r e s t , to follow the EC p o l i c y ; and a somewhat unstable
parliamentary situation.
T h e Danish s u p p o r t of the Common
Fund in Nairobi, for example, was full of r e s e r v a t i o n s , (3)
despite the fact that it is in Denmark's interest to a c h i e v e
s t a b l e p r i c e s on vital raw material imports.
Denmark, howe v e r , is a s t r o n g s u p p o r t e r of free trade regimes in i n t e r n a tional t r a d e and has i n d i r e c t l y sided with the developing
c o u n t r i e s in p r o t e s t i n g great power protectionism on manufactured g o o d s .
Danish r e p r e s e n t a t i v e s have been more
d o w n - t o - e a r t h in their public statements than their Swedish
and Norwegian c o u n t e r p a r t s , s t r e s s i n g the need for go-slow
implementation of the NIEO p r o p o s a l s , in o r d e r not to c a u s e
economic harm to the industrialized world, and pointing out
that Denmark itself only c o n c e d e s to d e v e l o p i n g c o u n t r i e s '
demands at the v e r y optimum of its economic c a p a c i t y .
As one
o b s e r v e r commented.
It
is
somewhat
surprising
that
conference
speeches
(of
Danish
officials)
clearly manifest
specific Danish i n t e r e s t s .
One should think that the
o p p o r t u n i t y to get s t a t u s and an improved s t a n d i n g
would make these statements more v a l u e - p r o m o t i v e ,
more dominated by ideology than they p r o v e to
be.(4)
T h e political instability is only r e l a t i v e ; compared with most
o t h e r c o u n t r i e s , Denmark is a stable p o l i t y .
The t u r n o v e r of
g o v e r n m e n t s in Denmark, h o w e v e r , is g r e a t e r than in Sweden
and N o r w a y , although much l e s s than in Finland.
More
importantly, the social problems seem g r e a t e r due to an
unemployment rate of about 10 p e r c e n t .
T h i s further e x p l a i n s
the r e l a t i v e s e l f - i n t e r e s t in Danish NIEO p o l i c i e s .
One recent and quite o u t s p o k e n e x p r e s s i o n of this
s e l f - i n t e r e s t are the proposals of the Federation of Danish
I n d u s t r i e s for a closer link between aid and trade policies and
the i n t e r e s t s of i n d u s t r y .
T h e Federation ( I n n d u s t r i e n og
u - l a n d e n e , 1977) p r o p o s e s that Danish development aid be used
54 WESTERN EUROPE AND THE NIEO
to promote Danish i n d u s t r y ' s s e a r c h for new markets and its
participation in the industrialization of d e v e l o p i n g c o u n t r i e s .
In o r d e r to make this p o s s i b l e , the Federation p r o p o s e s that
aid e x t e n d e d t h r o u g h the United Nations s y s t e m be cut by
half, so that loans and c r e d i t s to finance the p u r c h a s i n g of
g o o d s in Denmark, and Danish participation in industrialization
p r o j e c t s of the d e v e l o p i n g c o u n t r i e s can be i n c r e a s e d .
This,
a c c o r d i n g to the Federation, would create employment in
Denmark, improve balance of payments and s u p p o r t "the
Danish i n d u s t r y ' s natural Interest in gaining a foot-hold in
developing countries."
As one commentator points o u t , these
p r o p o s a l s attempt to link the i n t e r e s t s of Danish i n d u s t r y and
capital to the NIEO t a r g e t of a 25 p e r c e n t s h a r e for d e v e l o p i n g
c o u n t r i e s in world industrial production by the y e a r 2000.
T h e y do t h i s , h o w e v e r , in a narrow p e r s p e c t i v e and t h r o u g h
an outmoded perception of development g o a l s .
At the same
time they reject a number of o t h e r NIEO principles s t r o n g l y
b a c k e d b y d e v e l o p i n g c o u n t r i e s . (5)
Finland's position is influenced by an o v e r r i d i n g foreign
policy c o n c e r n d e r i v e d from East-West p o l i t i c s , that i s , to
r e d u c e international t e n s i o n s .
Its position u n d e r w e n t c h a n g e s
in the mid-70s, as a d i r e c t r e s u l t of the oil c r i s i s . (6) In the
fall of 1974, the Finnish government p u b l i s h e d the "Program of
Principles for International Development C o o p e r a t i o n . "
The
r e p o r t r e f l e c t s the g r o w i n g emphasis in the OECD c o u n t r i e s on
i n t e r d e p e n d e n c e and " c r i s i s management" as a r e s p o n s e to the
e v e n t s of 1 9 7 3 - 1 9 7 4 .
T h i s is further d e v e l o p e d in the report
of the State Committee for Development Cooperation ( 1 9 7 8 ) .
T h e r e p o r t notes that Finland, for i t s own economic i n t e r e s t s
as well as in the name of international p e a c e , must take a
positive s t a n d toward the NIEO.
On a continuum Finnish
policy seems c l o s e r to the Danish 'national i n t e r e s t s ' than to
the S w e d i s h and Norwegian p r i n c i p l e d and more ideologically
motivated s t a n d .
Finland's policy on NIEO i s s u e s a p p e a r s
d i c t a t e d by trade and i n d u s t r i a l r e l a t i o n s ; the chemical and the
woodpulp i n d u s t r i e s b e i n g p a r t i c u l a r l y influential.
Development aid still is v e r y modest in volume and g e o g r a p h i c a l
e x t e n s i o n , b u t the g o v e r n m e n t seems to emphasize the role of
aid as p a r t of the S c a n d i n a v i a n - N o r d i c c o n t r i b u t i o n .
In that
s e n s e , Finland a c t s as a " f r e e - r i d e r " : It benefits from the
positive image which Nordic aid g e t s internationally, b u t does
not c o n t r i b u t e much to the creation of that image. (7)
It may
be a recognition of this that prompted the Committee to
p r o p o s e to double the volume of aid by 1982, and the g o v e r n ment to a c c e p t this in p r i n c i p l e .
Finnish i n d u s t r y t a k e s a mixed view of the NIEO i s s u e s .
It has adopted a r a t h e r n e g a t i v e position on the I n t e g r a t e d
Program of Commodities and the Common F u n d . I t s v i e w s of
the Code of C o n d u c t on T e c h n o l o g y seem p o s i t i v e , h o w e v e r ,
b e c a u s e Finland, as a net importer of t e c h n o l o g y , h a s a com-
SCAN DIN A VIA/LIKE-MINDED COUNTRIES 55
mon interest in this area with d e v e l o p i n g c o u n t r i e s .
When
it comes to r e s t r u c t u r i n g and market a c c e s s , h o w e v e r , the
i n d u s t r y ' s position is not clear b e c a u s e of internal c o n t r a dictions between home m a r k e t - o r i e n t e d and t r a d e or foreign
production-oriented industries.
T h e r e is a mixed attitude
toward protectionism and internationalization as well.
T h e most
dynamic s e c t o r s (those that are the most e x p o r t - o r i e n t e d )
seem, h o w e v e r , to favor a S w e d i s h - t y p e position in the "new
international division of l a b o r . " (8)
Iceland lacks the r e s o u r c e s n e c e s s a r y to take an a c t i v e
p a r t in the NIEO d i s c u s s i o n s at t h e level of the other Nordic
countries.
Iceland was hit much more s t r o n g l y and much
e a r l i e r by the international economic c r i s i s .
Its trade with
d e v e l o p i n g c o u n t r i e s is c o n c e n t r a t e d in e x p o r t i n g fish and fish
p r o d u c t s and importing raw materials and o i l .
Its aid program
was initiated in the b e g i n n i n g of the 1970s, h a v i n g been
d i s c u s s e d since 1965.
In 1977, total appropriations reached
0.6 million US d o l l a r s .
T h i s made Iceland for the first time a
net c o n t r i b u t o r of development a i d .
Until 1976, Iceland itself
r e c e i v e d a i d , mainly t h r o u g h UNDP.
Aid for the period
1 9 7 1 - 1 9 7 6 amounted to $1 million. A similar amount had been
e n v i s a g e d for the period 1977-1982, but in December 1976 the
Icelandic g o v e r n m e n t d e c l a r e d it would no l o n g e r a s k for
f o r e i g n economic a s s i s t a n c e of this k i n d . Since 1973, a small
part of Iceland's ODA is channeled t h r o u g h the joint Nordic
aid p r o g r a m , e s t a b l i s h e d by an agreement in Oslo In the same
year.
P r i v a t e Icelandic investments in d e v e l o p i n g c o u n t r i e s
are not k n o w n .
Industrialization
All the Nordic c o u n t r i e s h a v e a c c e p t e d the principle of r e s t r u c t u r i n g their own economic s y s t e m s and the Lima target for
T h i r d World industrialization, although in v a r y i n g d e g r e e s and
forms.
In this s e c t i o n , the position of Norway and Sweden
will be r e v i e w e d with p a r t i c u l a r emphasis on the i n d u s t r i a l i zation of d e v e l o p i n g c o u n t r i e s , market a c c e s s for manufactured
p r o d u c t s from d e v e l o p i n g c o u n t r i e s , and r e s t r u c t u r i n g in the
S c a n d i n a v i a n countries within that c o n t e x t .
As already noted, S w e d i s h manufacturers are deeply
i n v o l v e d in production and marketing in a number of d e veloping c o u n t r i e s .
T h e r e is a clear t e n d e n c y in the o t h e r
c o u n t r i e s , i n c l u d i n g N o r w a y , to copy the " S w e d i s h p a t t e r n , "
although conceptions of how this should be done v a r y .
N o r w a y ' s official position on the principle of international
r e s t r u c t u r i n g is as positive as the S w e d i s h o n e , but is less
concrete.
Development aid has so far not been channeled to
promote T h i r d World industrialization, e x c e p t for funds which
a r e e x t e n d e d to firms making pre-investraent s t u d i e s and those
56
WESTERN EUROPE AND THE NIEO
s e e k i n g g u a r a n t e e s against economic r i s k s .
Until r e c e n t l y ,
these facilities h a v e b e e n little u s e d b y Norwegian i n d u s t r y .
In r e p o r t 94, the g o v e r n m e n t r a i s e d the idea of c r e a t i n g
another c r e d i t facility which was to be financed by public
g r a n t s in e x c e s s of the official 1 p e r c e n t of GNP t a r g e t for
development aid a p p r o p r i a t i o n s .
T h i s facility was to finance
industrial cooperation p r o j e c t s of an experimental n a t u r e .
The
Norwegian s t a t e was not to assume a d i r e c t role in s u c h
projects,
but inter alia finance the r e s p e c t i v e d e v e l o p i n g
c o u n t r y ' s s h a r e in the e q u i t y capital and p r o v i d e the r e s t of
the capital as n e e d e d .
As appropriations for development aid
had to be flattened out in 1978 due to s t a g n a t i n g income from
oil production and a mounting domestic economic c r i s i s , this
scheme was postponed until 1 9 7 9 . T h e n Parliament adopted i t ,
v o t i n g a first installment of 50 million Norwegian k r o n e r .
T h e r e i s , h o w e v e r , i n c r e a s i n g Norwegian a c t i v i t y r e g a r d i n g the e x p o r t s o f manufactured g o o d s , including capital
g o o d s , to aid the industrialization of d e v e l o p i n g c o u n t r i e s .
T h e state has i n c r e a s e d the volume of e x p o r t c r e d i t s and
s u b s i d i e s c o n s i d e r a b l y in o r d e r to finance s u c h e x p o r t s and to
a s s i s t in obtaining c o n t r a c t s .
T h i s p e r t a i n s in p a r t i c u l a r to
the e x p o r t of s h i p s , which are financed t h r o u g h special
guarantee schemes,
to help p r e s e r v e employment in the
crisis-stricken shipyard industry.
T h e Norwegian Association of I n d u s t r i e s , in a comment on
Government R e p o r t 94,
p r o p o s e s the establishment of a
Norwegian industrialization fund for d e v e l o p i n g c o u n t r i e s and
s u g g e s t s a g r e a t e r role for Norwegian i n d u s t r i e s , p r o v i d e d the
r i g h t i n c e n t i v e s are made a v a i l a b l e .
T h e s e i n c e n t i v e s include
r i s k c a p i t a l , more t y i n g of aid to p u r c h a s e s of Norwegian
capital goods as well as o t h e r goods and s e r v i c e s , and state
s u p p o r t of p r i v a t e
Norwegian
i n v e s t m e n t s in d e v e l o p i n g
countries.
T h e Association also o p p o s e s the g o v e r n m e n t ' s
proposal to limit industrialization a s s i s t a n c e to the least
d e v e l o p e d c o u n t r i e s and those ten or so d e v e l o p i n g c o u n t r i e s
that a l r e a d y r e c e i v e aid from N o r w a y .
It s u g g e s t s that state
s u p p o r t to industrialization be e x t e n d e d to o t h e r , more e c o nomically d e v e l o p e d c o u n t r i e s in the s o u t h , where t h e r e are
p r i v a t e Norwegian i n v e s t m e n t s . T h e Association maintains that
o t h e r i n d u s t r i a l i z e d c o u n t r i e s a r e g i v i n g more state s u p p o r t to
their i n d u s t r i e s ' a c t i v i t i e s in the s o u t h ; that most of the
m u l t i - b i - a s s i s t a n c e ( s u c h as UNDP funds) to which S c a n dinavian c o u n t r i e s are major c o n t r i b u t o r s , a r e b e i n g channeled
to i n d u s t r i e s in o t h e r i n d u s t r i a l i z e d c o u n t r i e s ; and that for
both these r e a s o n s the state o u g h t to i n t e r v e n e to s e c u r e more
c o n t r a c t s and e x p o r t s for Norwegian companies.
The general
view of the Association c o r r e s p o n d s to the concept of a "new
international division of l a b o r " : l e s s economically profitable
and l a b o r - i n t e n s i v e , t e c h n o l o g y - e x t e n s i v e industrial a c t i v i t i e s
should be t r a n s f e r r e d to d e v e l o p i n g c o u n t r i e s , while Norwegian
SCANDINAVIA/LIKE-MINDED COUNTRIES
57
i n d u s t r y should c o n c e n t r a t e on t h e more profitable, a d v a n c e d technology areas.
S w e d e n established a Fund for industrial cooperation with
d e v e l o p i n g c o u n t r i e s in 1978, with an anticipated b a s i s capital
of 100 million S w e d i s h k r o n e r .
T h e p u r p o s e of the fund is to
s u p p o r t p r o c e s s i n g i n d u s t r y projects in developing countries
which h a v e "a positive development effect in the c o u n t r y .
Special emphasis should be placed on the employment e f f e c t . "
( G u i d e l i n e s , p. 121)
Small and medium-sized projects are
e s p e c i a l l y singled o u t , b u t o t h e r w i s e there are no particular
conditions to be met.
O b v i o u s l y , S w e d i s h firms are to be
g i v e n priority when contract p a r t n e r s are s e l e c t e d .
The Fund
is to become an i n d e p e n d e n t s h a r e - h o l d i n g company which can
own s h a r e s in projects in d e v e l o p i n g countries with the
p u r p o s e of t r a n s f e r r i n g o w n e r s h i p (of at least the Fund's own
s h a r e ) to the local government or its a g e n t .
Unlike N o r w a y , Sweden h a s long p r a c t i c e d a policy of
e x t e n d i n g development aid for industrialization p r o j e c t s .
Aid
for projects in the manufacturing s e c t o r accounted to 33
p e r c e n t of total S w e d i s h public aid in 1976-1977, against only 2
p e r c e n t in 1 9 7 0 - 1 9 7 1 .
In addition, e x p o r t c r e d i t s to finance
the p u r c h a s e of equipment and capital goods in Sweden i n c r e a s e d r a p i d l y . A considerable number of Swedish firms h a v e
taken p a r t in the e x p o r t c r e d i t a r r a n g e m e n t s .
The newly
e s t a b l i s h e d Fund will c o v e r an aspect that has been mostly
a b s e n t from e x p o r t credit arrangements so far: the possibility
of e n g a g i n g S w e d i s h firms d i r e c t l y in d e v e l o p i n g countries in
joint v e n t u r e s s u p p o r t e d b y the S w e d i s h s t a t e .
Market A c c e s s
All the Nordic c o u n t r i e s are members of OECD and G A T T ;
Denmark is a member of the E C ; I c e l a n d , Norway and Sweden
a r e members of EFT A.
Finland is an associated member of
EFTA and has an agreement with CMEA. T h e s e commitments
s t r o n g l y influence their trade policy toward d e v e l o p i n g c o u n tries.
Norway and S w e d e n in addition h a v e free trade
agreements with the EC which means that they are part of a
trade system which is p r a c t i c a l l y free of customs b a r r i e r s for
manufactured g o o d s .
T h e s e formal commitments are as important in explaining
r e s t r i c t i v e policies toward d e v e l o p i n g c o u n t r i e s as are the
w e i g h t of domestic i n t e r e s t g r o u p s . I n d u s t r i e s like textile and
clothing are fighting against both f a c t o r s , since imports from
OECD c o u n t r i e s account for the lion's s h a r e of global textile
and clothing imports.
But it is imports from developing
c o u n t r i e s and Hong K o n g which are the most affected b e c a u s e
no international multilateral commitments, i n v o l v i n g a s e r i o u s
potential for retaliation, p r e v e n t g o v e r n m e n t s from taking
protectionist m e a s u r e s .
58
WESTERN EUROPE AND THE NIEO
T h e Danish l e a d e r s h a v e o p e n l y s t r e s s e d the free trade
principle in their comments on the NIEO.
T h i s s u p p o r t of a
p r i n c i p l e , which in fact all the Nordic c o u n t r i e s h a v e f a v o r e d ,
is not v e r y well matched in p r a c t i c e .
In a s t u d y of import
r e s t r i c t i o n s applied by OECD c o u n t r i e s on 49 p r o d u c t s or
p r o d u c t g r o u p s of p a r t i c u l a r i n t e r e s t to d e v e l o p i n g c o u n t r i e s ,
the UNCTAD S e c r e t a r i a t r a n k s Denmark as the most r e s t r i c t i v e
of the . four Nordic c o u n t r i e s .
Since the c o u n t r i e s of the
European Community are the most r e s t r i c t i v e in the o v e r a l l
r a n k i n g , EC membership must h a v e influenced Denmark's policy
toward d e v e l o p i n g c o u n t r i e s in the direction of g r e a t e r
protectionism.
( U N C T A D , 1979, T D / 2 2 9 / S u p p 2 , p . 26)
Like o t h e r Nordic c o u n t r i e s , Norway has introduced its
own G S P .
T h e s y s t e m , which was i n t r o d u c e d i n 1 9 7 1 , had
only marginal e f f e c t s on t r a d e . It i n c r e a s e d the p e r c e n t a g e of
manufactured imports from developing c o u n t r i e s exempt from
import tariffs from 92 u n d e r the p r e - 1 9 7 1 G A T T arrangement
to 96 to 9 7 . S t i l l , the GSP s y s t e m c o v e r e d only 2.5 p e r c e n t of
N o r w a y ' s total imports from d e v e l o p i n g c o u n t r i e s , and 83
p e r c e n t of imports u n d e r the GSP came from only 9 c o u n t r i e s ,
mostly n e w l y industrialized o n e s .
T h e s y s t e m has t h u s only
s l i g h t l y c o n t r i b u t e d to i n c r e a s i n g the s h a r e of manufactured
p r o d u c t s in N o r w a y ' s imports from d e v e l o p i n g c o u n t r i e s .
The
s h a r e rose from 6 p e r c e n t in 1961 to 16 p e r c e n t in 1 9 7 7 .
During the "oil boom," the Norwegian government p r o p o s e d more a c t i v e utilization of the GSP and i n t r o d u c e d a
s p e c i a l office in the Ministry of T r a d e to promote imports from
d e v e l o p i n g c o u n t r i e s (NORIMPOD). T h e p u r p o s e of the office
was to r e d u c e some of the nontariff trade b a r r i e r s .
The effect
h a s been v e r y limited.
Norwegian home market i n d u s t r i e s
acted to p r e v e n t imports of d i r e c t l y competing p r o d u c t s .
T e x t i l e and clothing are thus not included in the G S P , and the
government has to set a global quota for imports from d e veloping countries in this s e c t o r .
It is mostly "exotic"
p r o d u c t s that h a v e been promoted by NORIMPOD.
T h e policy d u r i n g the mid-70s was based on the e x pectations of a f u r t h e r oil boom.
T h e Norwegian labor market
was e x p e c t e d to be extremely t i g h t , t h u s favoring domestic
r e s t r u c t u r i n g and the t r a n s f e r of labor into new j o b s .
A
controlled p h a s i n g - o u t of some s e c t o r s , s u c h as textile and
c l o t h i n g , was e n v i s a g e d .
E x p o r t s were not to be s t r o n g l y
promoted b e c a u s e there would be a s u r p l u s of capital a n y w a y ,
which would h a v e to be e x p o r t e d . T h e s e e x p e c t a t i o n s did not
materialize; instead an a d v e r s e trend in trade coupled with
rising unemployment o c c u r r e d , and Norwegian economic policy
was r e v e r s e d .
From 1976 and 1977 o n , emphasis was no
longer on stimulating imports from d e v e l o p i n g c o u n t r i e s , b u t
on exporting.
S w e d e n has p r a c t i c e d a policy of trade liberalism which
h a s r e s u l t e d in lower tariffs than in most o t h e r industrialized
SCAN DIN A VIA/LIKE-MINDED COUNTRIES
59
countries.
Free trade agreement with the EC h a s , as in the
case of N o r w a y , f u r t h e r lowered tariffs for trade with Western
Europe.
Swedish policy toward d e v e l o p i n g c o u n t r i e s i s v e r y
similar to that of N o r w a y .
It is p a r t l y a r e s u l t of Swedish
i n d u s t r y ' s foreign production p o l i c y .
T h e Swedish GSP s y s t e m contains p r o t e c t i v e c l a u s e s and
does not c o v e r the most competitive d e v e l o p i n g c o u n t r y
p r o d u c t s , notably t e x t i l e , c l o t h i n g , and l e a t h e r .
It is, as
with N o r w a y , h e a v i l y c o n c e n t r a t e d on the newly industrialized
s t a t e s : nine c o u n t r i e s accounted for 86 p e r c e n t of imports
under the GSP s y s t e m in 1974.
P r o d u c t s , which d e v e l o p i n g
c o u n t r i e s h a v e a comparative a d v a n t a g e , face e f f e c t i v e tariffs
of up to 60 p e r c e n t . ( 9 )
S t i l l , these seem not to be p a r t i c ularly h i g h compared with tariffs and r e s t r i c t i v e measures
imposed b y other i n d u s t r i a l i z e d c o u n t r i e s .
In some b r a n c h e s , the import s h a r e of the S w e d i s h market
is as high as 90 p e r c e n t .
In the case of clothing it is 75
p e r c e n t on the a v e r a g e .
Only 10 to 15 p e r c e n t , h o w e v e r ,
comes from d e v e l o p i n g c o u n t r i e s and Hong K o n g . A g r e a t deal
comes t h r o u g h affiliates of S w e d i s h companies in Finland and
Portugal - comparatively l o w - c o s t c o u n t r i e s in the OECD
group.
It has been estimated that 29 p e r c e n t of Swedish
e x p o r t g o e s a s inter-company t r a n s f e r s , i . e . , t h r o u g h S w e d i s h
t r a n s n a t i o n a l ( U N C T A D S e c r e t a r i a t , 1 9 7 6 ) . We h a v e no data
to indicate whether inter-company t r a n s f e r s are more or l e s s
dominant in S w e d e n ' s economic e x c h a n g e s with d e v e l o p i n g
c o u n t r i e s than the a b o v e p e r c e n t a g e s h o w s .
A logical a s sumption, h o w e v e r , is that e x p o r t s from Sweden are more tied
to s u c h t r a n s f e r s than Imports to S w e d e n .
Domestic R e s t r u c t u r i n g
As a c o n s e q u e n c e of g e n e r a l developments in s o c i e t y , and the
c h a n g e s in the p r o d u c t i v e s y s t e m s that h a v e favored c e n t r a l ization (rationalization and urbanization) all Nordic c o u n t r i e s
h a v e u n d e r g o n e a fundamental r e s t r u c t u r i n g o v e r the last
decades.
T h i s trend has p r o b a b l y been most prominent in
S w e d e n , w h e r e migration from the c o u n t r y s i d e has been a c t i v e
to s u p p l y labor to a rapidly g r o w i n g manufacturing i n d u s t r y
and s e r v i c e s e c t o r . In N o r w a y , d u e to the p a r t i c u l a r emphasis
on fisheries and small-scale farming, the trend has been much
l e s s prominent.
R e g a r d i n g their policies on NIEO demands for industrial
c o u n t r y r e s t r u c t u r i n g , Norway seems to h a v e modified its
initial favorable attitude at the state l e v e l .
T h e Foreign
Ministry in 1977 p r e p a r e d an internal s t u d y that ended up
proposing a fund for financing domestic industrial readjustment
r e s u l t i n g from the i n c r e a s e d imports of goods from d e v e l o p i n g
countries.
T h e s t u d y was a follow-up of the principles set
60
WESTERN EUROPE AND THE NIEO
down in Report n o . 94, on future industrial policies (19741 9 7 5 ) , and of e x p e c t a t i o n s of a tight labor market as a r e s u l t
of the oil boom.
The s t u d y s u g g e s t e d that the role of s u c h a
fund should be to finance e x t r a financial o u t l a y s as a r e s u l t of
lost employment, while the companies c o n c e r n e d work out
a l t e r n a t i v e employment o p p o r t u n i t i e s .
T h e s t u d y was not
e n d o r s e d politically, a p p a r e n t l y b e c a u s e of opposition from
both the Association of I n d u s t r i e s and the Federation of Labor
(LO).
In a r e c e n t s t u d y , no clear t r e n d in p r e s e n t Norwegian
policy was r e p o r t e d . ( 1 0 )
It seems fair to s a y that the i n tentions of g o v e r n m e n t , as e x p r e s s e d in Report n o . 94, and
later r e p e a t e d in i t s long-term program for 1 9 7 8 - 1 9 8 1 , h a v e
been p u t on i c e .
Instead of the planned i n c r e a s e in manufactured imports from d e v e l o p i n g c o u n t r i e s and g r a d u a l r e adjustment at home, import i n c r e a s e s are b a r r e d and g r e a t e r
emphasis is put on promoting e x p o r t s to the Third World.
T h i s t a k e s place p a r t l y in o r d e r to make up for s t a g n a t i n g or
decreasing exports to developed countries.
Present policies
for e x p o r t e x p a n s i o n to T h i r d World c o u n t r i e s are based on
two broad m e a s u r e s : special g u a r a n t e e s against political and
commercial r i s k s in connection with e x p o r t s of capital (which is
still little u s e d ) , and s u b s i d i e s on i n t e r e s t s in connection with
export credits.
T h e l a t t e r h a s been e x t e n s i v e l y used t o g e t
c o n t r a c t s on e x p o r t s of s h i p s to d e v e l o p i n g c o u n t r i e s , i n v o l v i n g state g u a r a n t e e s to the s h i p y a r d i n d u s t r y which
p r e s e n t l y totals 2.5 billion Norwegian k r o n e r .
In S w e d e n , readjustment and r e s t r u c t u r i n g are d i s c u s s e d
as economic, commercial n e c e s s i t i e s , independent of the NIEO.
Until the b e g i n n i n g of the 1960s, S w e d e n ' s position in the
international division of labor was c h a r a c t e r i z e d by production
based on domestic raw materials, with a high d e g r e e of
p r o c e s s i n g and h i g h l y capital i n t e n s i v e e x p o r t s e c t o r s .
During
the 1960s this position was transformed into a more and more
labor i n t e n s i v e p r o d u c t i o n , ( 1 1 )
I n d u s t r y and its spokesmen
want this trend to c o n t i n u e .
A c c o r d i n g to the v i e w s of the
e x p o r t - o r i e n t e d , internationalized s e c t o r s , not only the l a b o r i n t e n s i v e i n d u s t r i e s ( t e x t i l e , l e a t h e r , e t c . ) but e v e n those
p a r t s of the e x p o r t i n d u s t r i e s that still produce from local raw
materials and with r e l a t i v e l y unsophisticated technology ( p a r t s
o f the s t e e l , p a p e r , s h i p y a r d i n d u s t r y , e t c . ) should move
production a b r o a d .
T h e s e are i n d u s t r i e s in c r i s i s which seem
to s u r v i v e only b e c a u s e the state has i n t e r v e n e d h e a v i l y to
s u p p o r t them.
If t h e s e t r e n d s are not related to demands for a NIEO,
the NIEO i s s u e may n e v e r t h e l e s s become linked with them.
Location of production abroad may be defended against p r o t e s t s from w o r k e r s in S w e d e n , by r e f e r e n c e to the demands of
d e v e l o p i n g c o u n t r i e s e v e n t h o u g h the real motive behind the
t r a n s f e r is i n c r e a s i n g p r o f i t a b i l i t y .
On the o t h e r h a n d , the
SCAN DIN A VIA/LIKE-MINDED COUNTRIES
61
demands of d e v e l o p i n g c o u n t r i e s in this field are quite broad
and nonspecific; this i n v i t e s deals where a community of
interest is p o s s i b l e .
The socioeconomic e f f e c t s on Sweden and
on the recipient c o u n t r y , and the question of whose i n t e r e s t s
are actually s e r v e d by s u c h deals are not a l w a y s c l e a r , nor
are they a l w a y s b a s e d on a domestic community of i n t e r e s t .
Critics
of
the
Swedish
practice
make
this
point
strongly.(12,13)
Transnational C o r p o r a t i o n s , Direct I n v e s t m e n t s ,
and T e c h n o l o g y T r a n s f e r
Sweden o c c u p i e s a p a r t i c u l a r l y prominent role in the a b o v e
areas.
Only a v e r y few transnational corporations ( T N C s )
from o t h e r Nordic c o u n t r i e s can actually match the g r e a t
number of S w e d i s h internationalized companies.
(See table
4.2.)
T h e p r e s e n t s h a r e , about 1 5 p e r c e n t , o f the Swedish
T N C s foreign sales in d e v e l o p i n g c o u n t r i e s will, no d o u b t ,
i n c r e a s e in the f u t u r e .
S w e d e n will p r o b a b l y be followed by
the o t h e r c o u n t r i e s in this r e s p e c t .
T h e r e is g e n e r a l s u p p o r t , both in government and among
labor unions in all Nordic c o u n t r i e s , for the need to control
transnational c o r p o r a t i o n s .
I T T in C h i l e , foreign investments
in S o u t h e r n A f r i c a , and similar h i g h l i g h t e d c a s e s of o b v i o u s
political-economic exploitation of T h i r d World economies h a v e
met with political reactions in S c a n d i n a v i a .
In s u c h c a s e s
g o v e r n m e n t s , p a r t i c u l a r l y i n S w e d e n , h a v e intervened t o
control "their" corporations and stop new i n v e s t m e n t s .
These
a r e , h o w e v e r , exceptional c a s e s .
S u p p o r t in principle at the
international level has not been matched by c o r r e s p o n d i n g
action at the national l e v e l .
L a b o r does not come forth with an a c t i v e policy in this
a r e a , but confines its activities to the European section of the
ICFTU and to Nordic cooperation.
In a statement issued by
the Nordic labor federations in 1977, Nordisk facklig samorganisation och en ny ekonomisk v a r l d s o r d n l n g , a more a c t i v e
line is called for in the I L O , t o g e t h e r with a major r e v i s i o n of
the OECD "Code of c o n d u c t " and a g u a r a n t e e of w o r k e r s '
r i g h t s to o r g a n i z e and negotiate with T N C s in d e v e l o p i n g
countries.
Norway s u p p o r t s the claim of d e v e l o p i n g countries to
assume national control o v e r their own r e s o u r c e s t h r o u g h
nationalization.
Norwegians h a v e , h o w e v e r , r e s e r v e d their
position on the question of legal p r o c e d u r e in the compensation
issue.
In Report n o . 94, it is e n v i s a g e d that increased
control o v e r T N C s "can be done p a r t l y by means of agreements
b e t w e e n the interested c o u n t r i e s , p a r t l y b y p r o v i d i n g the
international o r g a n i z a t i o n s with the n e c e s s a r y instruments to
s u p e r v i s e the operations of these c o r p o r a t i o n s . "
( p . 26)
1
1
Foreign Content of Major Nordic Industrial Corporations. 1976
Table 4.2.
fore l,,, ••1••
Tolal
Con 0011... jo1
"ationanl, lndu.try
C:C-pany
laporta
Coy~rnme1'lt
dated
',.om
o_nc,.ah.ip
.al ••
tDuntry
(percent )
(Mm . I I
X.
home-
Saf•• 01 '°"'1"
ov.,. ..... emplo""e.nt
.rn H.t~.
to th ird
2 ar ti e •
pucent o! lotal
.. ptrc«nl
. f total
et!Ipl o'f"'"T'll
conaoJi dated ,al ••
~T",SIATISK
~OIlPACN I
YOI-VO
Denmark
rood
)2U I I'7)
S •• dcn
Woto r
•• tud ••
JUS
44
24
27
, .,.rt.
S1" ATSfORETAK
C R OUP
C'
S",Aa- SCAPiOIA
S • ..cSen
S.eden
Mi ni n,
100
Wotor
Z231
'2
2207
)2
n
14
n
Z9
,.
.thicl ••
l parte
N
ASEA
S .. "dtn
E).e.ctrical
un
£l.ECTROI-UX
S.eden
£ lKtrica1
17S6
)I
55
LN ER ICSO N T
S •• den
Electrical
1.7~
2l
.1
SKf AKTIE8 0l-ACET
S.edcn
Nonelectrical
0
aOl
14
n
M£STE
'inland
'etroa .. wn
100
1360
.7
li l A
li l A
7)
n
"
.0
"
IOO ltSK HYI7RO
NOT • • ,
Ch~ i caJ.
'44
1)
E:.KEII - SPIC£It VERKET
"OTWay
Ch .-nlcala
!IOO
S~
. ORUCAAltO
Nor •• .,
Chemic.b-
410
)4
n
20
400
71
10
U
SI.4
'aper
ASV
Norway
M.laI
,..linln,
1"01 an e..hau.tty. lbt o f compan.i ••.
•'Il . Not applicable .
100
Government officials c o n f i d e , h o w e v e r , that there is a g r o w i n g
disbelief in international regulation of T N C a c t i v i t i e s and that
the only e f f e c t i v e Way is to e q u i p individual d e v e l o p i n g
c o u n t r i e s with the means to b a r g a i n with T N C s t h e m s e l v e s .
V a g u e n e s s as to the c o n c r e t e action to be taken on the
international level is matched by u n c e r t a i n t y as to the action
to be taken on the national l e v e l .
As noted a b o v e , there are
v e r y few Norwegian T N C s , b u t those that e x i s t are increasing
their a c t i v i t i e s a b r o a d .
Most investments still go to developed
c o u n t r i e s , b u t investment in d e v e l o p i n g countries is i n c r e a s i n g , p a r t i c u l a r l y in the m a n u f a c t u r i n g , t r a d e , and shipping
sectors. (14,15)
T w o - f i f t h s of all individual investment in
d e v e l o p i n g c o u n t r i e s was made after 1968.
I n d u s t r y claims
that the main reason why t h e y a r e not y e t approaching a
substantial level of investment is the lack of i n c e n t i v e s by
government.
For its p a r t , government maintains that p r o p e r
i n c e n t i v e s are offered s u b j e c t to an assessment as to "whether
the investment schemes in question do in fact foster d e v e l opment."
( R e p o r t , p . 57)
Political c o n c e r n has been c o n c e n t r a t e d more on the
volume than on the form and the e f f e c t s of p r i v a t e , d i r e c t
i n v e s t m e n t s in developing c o u n t r i e s .
S u c h investments are
p r e s e n t l y s e p a r a t e d from ODA in N o r w a y ' s official p o l i c y ,
a l t h o u g h it is a c k n o w l e d g e d that to some e x t e n t they s u p plement each o t h e r .
New credit arrangements to promote
industrial development in developing countries h a v e been
c r e a t e d , but the government has not had an o p p o r t u n i t y to
apply formally the intended conditions and criteria for e x tending c r e d i t s (see Report n o . 94, p. 60 and p a s s i m ) .
The
question a r i s e s , h o w e v e r , w h e t h e r s u c h conditions would h a v e
been applied e v e n if t h e r e were means to i n t e r v e n e formally.
As an example, two "parastate" companies Invested in a h u g e
mining project in the Amazon despite political and public
questioning of its social, economic, ecological, and political
implications.
Government spokesmen h a v e stated p u b l i c l y that
they do not h a v e the political and legal means to i n t e r v e n e ,
e v e n if t h e y wanted t o , to i n s t r u c t these companies to act
o t h e r w i s e . (16)
S w e d e n ' s official policy follows from its mixed economy,
which Is actively adapting to the c h a n g i n g international
division of l a b o r .
T h e government and the labor movement
follow the social democratic tradition of p r o g r e s s i v e policies on
T N C s and investment in developing c o u n t r i e s . T h e criteria set
down by the p r e s e n t S w e d i s h government for s u p p o r t i n g
i n d u s t r y ' s investments in d e v e l o p i n g countries are s t r i c t e r ,
more c o n c i s e , and - more oriented m a s s - b a s e d development than
the Norwegian o n e s .
And the S w e d i s h labor movement has
been p a r t i c u l a r l y a c t i v e in proposing action to be taken in
T N C s and a r g u i n g for d i r e c t investments in developing c o u n t r i e s , internationally as well as domestically.
S u c h action
i n c l u d e s a s s i s t a n c e to w o r k e r s In affiliates of S w e d i s h T N C s
a b r o a d , and e v e n s y m p a t h y s t r i k e s and e m b a r g o s , and c o ordination of policy to avoid b e i n g s u b j e c t e d to s p l i t - a n d - r u l e
t a c t i c s by T N C s , e t c . ( 1 7 ) T h e demand for a social c l a u s e to
be included in the G A T T r u l e s testifies to the international
c o n c e r n of S w e d i s h social d e m o c r a c y .
On the o t h e r h a n d , c r i t i c s of S w e d e n ' s p o s t w a r policy
h a v e pointed out that it was u n d e r social democracy that
S w e d i s h i n d u s t r y was able to internationalize at a h i g h s p e e d
and on a broad s c o p e . S w e d i s h investments abroad quintupled
o v e r t h e last IS y e a r s and r e p r e s e n t four times the value of
foreign i n v e s t m e n t s in S w e d e n .
T h i s trend seems to be
continuing and may c a u s e economic s t a g n a t i o n , i n c r e a s e d
unemployment and i n c r e a s e d concentration in S w e d i s h s o c i e t y . (18) In some c a s e s S w e d i s h capital p r e f e r s to go a b r o a d
if the w o r k e r s p e r s i s t in demanding industrial d e m o c r a c y , a
partial control o v e r the c o m p a n y ' s s u r p l u s ( L o n t a g a r f o n d ) , and
that new f a c t o r i e s be located in p e r i p h e r a l r e g i o n s of S w e d e n .
In the s h o r t r u n S w e d i s h T N C s are e x p e c t e d to affect p o s i t i v e l y domestic employment b e c a u s e they i n c r e a s e demand for
e x p o r t s from S w e d i s h factories to the new affiliates a b r o a d .
B u t in the medium and long r u n , t h e y will demand more and
more i n p u t , raw materials and o t h e r g o o d s froin a b r o a d , t h u s
h a v i n g a n e g a t i v e effect on S w e d i s h economy and employment.
S c i e n c e and T e c h n o l o g y Policy
S c i e n c e and t e c h n o l o g y in the c o n t e x t of development problems
in the T h i r d World is a r e l a t i v e l y new field for Scandinavian
countries.
In terms of t r a n s f e r s of k n o w l e d g e to d e v e l o p i n g
c o u n t r i e s , Sweden again o c c u p i e s a special position by v i r t u e
of the i n t e r e s t of Swedish capital in internationalized p r o duction.
But e v e n in terms of the public s e c t o r , S w e d e n is in
t h e forefront compared with its Nordic n e i g h b o r s .
Generally,
the role of s c i e n c e and t e c h n o l o g y for development so far has
been marginal in the debate on development aid s t r a t e g i e s .
E x p o r t s and p r i v a t e investments t r a n s f e r r i n g t e c h n o l o g y h a v e
also b e e n by a n d l a r g e outside the control of g o v e r n m e n t .
T h e g o v e r n m e n t , h o w e v e r , h a s not tried t o e x e r c i s e s u c h
control.
S w e d i s h preeminence in this field can be explained by
the c o u n t r y ' s position in the international division of l a b o r .
While the o t h e r Nordic c o u n t r i e s are adapting more p a s s i v e l y to
their international e n v i r o n m e n t , Sweden p u r s u e s a more a c t i v e
s t r a t e g y . (19)
A c c o r d i n g to K a t z e n s t e i n , Denmark and Norway
(and p r e s u m a b l y Finland, which he d o e s not d i s c u s s ) follow a
policy of d e f e n s i v e adaptation.
O t h e r small c o u n t r i e s with
some
particular
comparative
advantage,
like
Switzerland
(pharmaceutical i n d u s t r y and b a n k i n g ) and the Netherlands
(some b i g T N C s ) follow a policy of o i l e n s l v e adaptation.
Sweden o c c u p i e s an i n - b e t w e e n position in the international
division of l a b o r , but in the crucial field of science and
t e c h n o l o g y it is quite close to the S w i s s and D u t c h .
While
Denmark and Norway s p e n t 1 p e r c e n t of their GNP on r e s e a r c h
and development in the b e g i n n i n g of the 1970s. S w e d e n s p e n t
1.7 p e r c e n t and the Netherlands 2.0 p e r c e n t - a p e r c e n t a g e
comparable with that of the f i v e big capitalist c o u n t r i e s in the
w o r l d . (20)
All the Nordic c o u n t r i e s are heavily d e p e n d e n t on imports
of capital g o o d s and technology In other forms, Sweden again
being a partial e x c e p t i o n .
T h i s d e p e n d e n c e , which c o r r e s p o n d s in some r e s p e c t s to that which d e v e l o p i n g countries
face, is s t r o n g l y felt in many k e y industrial s e c t o r s .
As an
example, Norway is building its oil economy with the help of
massive and costly imports of foreign t e c h n o l o g y .
T h i s had a
profound impact on Norwegian balance of payments o v e r the
last few y e a r s , s i n c e e x p o r t s h a v e stagnated and e a r n i n g s
from the s h i p p i n g s e c t o r h a v e d e c r e a s e d .
N o r w a y ' s official policy on s c i e n c e and technology for
development is still in the m a k i n g .
T h e national p a p e r
p r e s e n t e d to the UN C o n f e r e n c e on S c i e n c e and T e c h n o l o g y for
Development ( U N C S T D ) s t r e s s e d the need for d e v e l o p i n g
c o u n t r i e s to become more autonomous in s c i e n c e and technology
and that a p r i o r i t y for international cooperation, including
t r a n s f e r of t e c h n o l o g y , is to s t r e n g t h e n their c a p a c i t y in that
respect.
It also called for more emphasis on the development
and utilization of e n d o g e n o u s and available technology in
d e v e l o p i n g c o u n t r i e s and s u g g e s t e d a s s i s t a n c e to achieve t h i s .
As the p a p e r p u t s it, " T h e aim should be to d e v e l o p science
and t e c h n o l o g y as d i r e c t l y as possible where people need them,
b e a r i n g in mind t h a t the i n s i g h t and the technology already
p r e s e n t r e p r e s e n t e d a rationality that should be maximally
e x p l o i t e d and improved u p o n . "
Officially,
NORAD
monitors
technology in bilateral
development aid p r o j e c t s .
H o w e v e r , this monitoring seems not
to h a v e b e e n v e r y e f f e c t i v e so f a r .
One important form of
t e c h n o l o g y t r a n s f e r t h r o u g h Norwegian aid programs is c o n s u l t a n c y s e r v i c e s , where a small number of firms dominate the
m a r k e t . One of them, N O R C O N S U L T , h a s done extremely well
commercially e v e n by international s t a n d a r d s . (21) T h e r e is no
public control o v e r technology in p r i v a t e e x p o r t s and i n vestments.
Until 1977 NORAD had a formal responsibility to
evaluate e x p o r t s , before state s u p p o r t is g r a n t e d in the form
of e x p o r t c r e d i t s on i n t e r e s t s .
T h i s responsibility was withdrawn in 1 9 7 7 , and the decision on s u b s i d i e s , inter alia with
r e g a r d to shipbuilding c o n t r a c t s has been v e s t e d solely with
the Ministry of T r a d e .
S w e d e n ' s c o n t r i b u t i o n s in this field d e r i v e mostly from
unplanned benefits from r e s e a r c h and development activities
due to the internationalization of S w e d i s h i n d u s t r y and planned
a c t i v i t i e s within the state s e c t o r .
I n d u s t r y ' s r e s e a r c h and
development policy has been oriented toward i t s own n e e d s ,
and a global profit s t r a t e g y .
S i n c e the late 1960s, the public
s e c t o r c o n c e r n e d with development aid has b e e n e n g a g e d in
comparatively l a r g e - s c a l e r e s e a r c h p r o g r a m s related t o d e veloping c o u n t r i e s .
S w e d e n ' s financial contribution to r e s e a r c h and d e velopment problems g r e w from 5 to 50 million S w e d i s h k r o n e r
from 1967 to 1973 and continued i t s expotential g r o w t h to reach
100 million in 1978 and 1 9 7 9 . About t w o - t h i r d s is channeled to
international o r g a n i z a t i o n s , with a concentration on family
p l a n n i n g , employment, and n u t r i t i o n .
About 12 p e r c e n t of
total
appropriations
were
channeled d i r e c t l y to r e s e a r c h
institutions in d e v e l o p i n g c o u n t r i e s ( 1 9 7 2 - 1 9 7 3 ) .
In o r d e r to
o r g a n i z e and coordinate these a c t i v i t i e s ,
the g o v e r n m e n t
e s t a b l i s h e d in 1975 a s e p a r a t e institution, the S w e d i s h A g e n c y
for R e s e a r c h Cooperation with Developing C o u n t r i e s ( S A R E C ) .
T h e institution, which is l a r g e l y independent of S w e d i s h
International Development A g e n c y
(SIDA),
h a s the twin
function of s u p p o r t i n g d e v e l o p i n g c o u n t r i e s in their effort to
build their own c a p a c i t y in r e s e a r c h and accumulate and
s p r e a d knowledge about development questions in S w e d e n .
In a s u r v e y of technology t r a n s f e r s by S w e d i s h i n d u s t r y ,
it was found that only in a few c a s e s S w e d i s h firms had
developed
technology
products
and
processes
especially
adapted to the n e e d s of d e v e l o p i n g c o u n t r i e s .
Examples
included
transportation
equipment
and
wood-treating
machinery.
Profitability considerations are still dominant in the
firms' t h i n k i n g about their a c t i v i t i e s in d e v e l o p i n g c o u n t r i e s ,
but a few firms showed c o n c e r n about their social implications.
( U N C S T D National R e p o r t , p . 4 3 f f . ) T h e g o v e r n m e n t seems
to h a v e no p a r t i c u l a r intention to i n t e r f e r e with the a c t i v i t i e s
of S w e d i s h p r i v a t e firms in this field, b e y o n d the g e n e r a l
p r i n c i p l e s it has s e t down for e x t e n d i n g loans t h r o u g h the
newly e s t a b l i s h e d industrialization f u n d .
T h e r e will be more
concern
for selling a p p r o p r i a t e t e c h n o l o g y to d e v e l o p i n g
countries,
a c c o r d i n g to government t h i n k i n g , when these
c o u n t r i e s become more important markets for S w e d i s h firms.
Raw Materials
All the Nordic c o u n t r i e s h a v e p u b l i c l y s u p p o r t e d , in v a r y i n g
d e g r e e s , the I n t e g r a t e d Program for Commodities (IPC) and
the establishment of a Common Fund ( C F ) from the o u t s e t .
Norway h a s been the most e x p r e s s i v e l y p o s i t i v e , Finland and
Denmark the least s o . T h i s difference p r o b a b l y h a s a political
background.
A l t h o u g h Finland's r e l a t i v e l o w - k e y e d policy o n
the CF could be e x p l a i n e d by her d e p e n d e n c e on the im-
portation of raw materials, national economic i n t e r e s t s h a v e
p r o b a b l y not p l a y e d a major r o l e .
It may, h o w e v e r , be said
that h i g h import d e p e n d e n c e on raw materials and their
r e l a t i v e l y small size make the Nordic countries r e c e p t i v e to
NIEO demands.
All four Nordic c o u n t r i e s are dependent on
imports of raw materials o t h e r than food, as shown in table
4,3.
Whereas the d e p e n d e n c e as compared with the position of
the l a r g e OECD c o u n t r i e s is clearly c o n s i d e r a b l e , the difference b e t w e e n the Nordic c o u n t r i e s is i n s i g n i f i c a n t .
Hence,
import d e p e n d e n c e is only p a r t of the explanation for the
v a r y i n g Nordic s u p p o r t of the IPC and the Norwegian p r o g r e s s i v e n e s s on the i s s u e .
It should be noted, h o w e v e r , that
Sweden is a major e x p o r t e r of iron and steel p r o d u c t s and an
important p r o d u c e r of s u g a r and that Norway p r o d u c e s and
e x p o r t s sizable quantities of c o p p e r and iron p r o d u c t s .
State
s u b s i d i e s , to s a v e employment in these s e c t o r s , h a v e been
considerable.
In 1977 the Norwegian government s p e n t more
on s u b s i d i e s to the c o p p e r i n d u s t r y , which is some 60 p e r c e n t
controlled by the s t a t e , than it i n v e s t e d in the C F .
T a b l e 4 . 3 . Import of Selected Raw Materials
( E x c l u d i n g A g r i c u l t u r a l Goods)
as P e r c e n t a g e of G r o s s Factor Income 1972,
N o r w a y ' s position on the IPC and the CF has been consistently
in s u p p o r t of d e v e l o p i n g c o u n t r i e s ' demands, while at the same
time t r y i n g to balance this s u p p o r t with the need to s t a y in
line with the OECD g r o u p .
T h i s balancing act led to U n d e r S e c r e t a r y of State S t o l t e n b e r g ' s election as chairman of the
n o r t h - s o u t h committee for the CF d i s c u s s i o n s .
Norway was the
first among the industrialized c o u n t r i e s to p l e d g e a c o n tribution to the C F .
T h e $25 million offered at UNCTAD IV
was far in a c c e s s of the contribution e x p e c t e d of Norway
a c c o r d i n g to the formula worked o u t , $22 million out of the $25
million had b e e n d i r e c t e d to the "second window."
T h e Norwegian position on indexation has been l a r g e l y
negative.
T h e implicit reason seems to be twofold.
First,
although the p r e s e n t social democratic government f a v o r s
certain r e g u l a t o r y d e v i c e s
for the international economy,
indexation has been found to be too politically u n a c c e p t a b l e
both to major OECD p a r t n e r c o u n t r i e s and to the i n d u s t r i e s at
home that still adhere to the free trade i d e o l o g y .
Secondly,
t h e r e is the argument of the neo-classical economists that an
indexation s c h e m e would not be technically f e a s i b l e .
At f i r s t , g o v e r n m e n t took a n e g a t i v e attitude toward
p r o d u c e r - e x p o r t e r a s s o c i a t i o n s , despite i t s g e n e r a l s u p p o r t for
collective s e l f - r e l i a n c e among d e v e l o p i n g c o u n t r i e s .
(Pari.
Report) An offer to join the iron ore association was t h u s
declined without being d i s c u s s e d s e r i o u s l y at the g o v e r n m e n t
level.
Later,
however,
government spokesmen e x p r e s s e d
u n d e r s t a n d i n g and some d e g r e e of s u p p o r t for the idea of
producer associations.
A major factor b e h i n d this l u k e - w a r m s u p p o r t is the
political implication of being a member of the Western free
t r a d e a r e a , while at the same time being committed to the trade
unionist idea of collective a c t i o n .
T h e s e two c o n c e r n s often
c o n t r a d i c t each o t h e r .
T h e solution s o u g h t is the one that
was c h o s e n in the c a s e of o i l :
As a Western capitalist e c o n omy, Norway would logically become a full member of the
International E n e r g y A g e n c y ( I E A ) ; a s a n o i l - p r o d u c i n g and
e x p o r t i n g c o u n t r y i t s e l f , the logical position would be to join
OPEC or I E A .
Norway c h o s e , against some domestic political
o p p o s i t i o n , to become an associate member of IEA and not to
associate formally with O P E C .
S w e d e n does not match the Norwegian g e n e r o s i t y when it
comes to IPC donations but is t a k i n g a more positive s t a n c e
toward p r o d u c e r a s s o c i a t i o n s .
T h i s was shown at the Lima
C o n f e r e n c e in 1 9 7 5 , when S w e d e n , as the only Nordic c o u n t r y
v o t e d in favor of p a r a g r a p h s 47 and 60 a of the Declaration,
and in S w e d e n ' s full membership in the Association of Iron Ore
Exporting Countries ( A I O E C ) .
S w e d e n does not, h o w e v e r , seem to follow a v e r y a c t i v e
policy in the A I O E C .
R a t h e r , h e r emphasis is on promoting
cooperation b e t w e e n p r o d u c e r - e x p o r t e r and consumer c o u n t r i e s . (22)
She has v o t e d against the indexation proposal and
h a s promoted a S T A B E X - l i k e scheme, inter alia, in d i s c u s s i o n s
at the C I E C .
T h i s may be explained by the c h a n g e of
government from Social Democrat to a c e n t e r - r i g h t coalition in
1976.
S w e d i s h policy on raw materials r e f l e c t s its position in the
international
division
of labor
and
its
mixed
economy.
G r a n g e s , the major p r i v a t e Swedish s t e e l - m a k e r with c o n s i d e r a b l e i n t e r e s t s in L i b e r i a ' s iron ore i n d u s t r y , o p p o s e d
S w e d i s h membership in the A I O E C .
On the other h a n d ,
membership was f a v o r e d by the s t a t e - o w n e d steel i n d u s t r y
which haa considerable e x p o r t i n t e r e s t s .
(Liberia did not join
the A I O E C . )
T h e Swedish involvement in Liberia has been
c r i t i c i z e d for indirectly s u p p o r t i n g e x p l o i t a t i v e p r a c t i c e s . (23)
It is not known whether the company has influenced L i b e r i a ' s
decision not to join the A I O E C .
T h e S e r v i c e Sectort
T h e C a s e o f Shipping
T h e S c a n d i n a v i a n g o v e r n m e n t s h a v e comparatively few v e s t e d
i n t e r e s t s in the w o r l d ' s financial c r e d i t institutions e x c e p t as
donors of ODA t h r o u g h the World B a n k (IDA) and the regional
development b a n k s .
The private sector, however, plays a
role.
The S w e d i s h state and some p r i v a t e financial institutions
h a v e loans in developing c o u n t r i e s .
T h e Swedish government
cancelled d e b t s related to these loans for the least developed
c o u n t r i e s in 1978.
In some d e v e l o p i n g c o u n t r i e s , Scandinavian
i n s u r a n c e companies h a v e c o n s i d e r a b l e i n t e r e s t s .
The biggest
Norwegian company, S t o r e b r a n d , is r e p o r t e d to h a v e a l a r g e r
t u r n o v e r on its activities in d e v e l o p i n g c o u n t r i e s , especially
C e n t r a l America, than in N o r w a y .
S h i p p i n g is the most .important s e r v i c e s e c t o r in S c a n d i n a v i a n - T h i r d World r e l a t i o n s .
Sweden and N o r w a y , and also
Denmark, h a v e important shipbuilding s e c t o r s that to some
e x t e n t d e p e n d on e x p o r t s to d e v e l o p i n g c o u n t r i e s .
More
importantly, their merchant fleets l a r g e l y depend on t r a n s p o r t
of raw materials between d e v e l o p i n g and industrialized c o u n tries.
N i n e t y - t h r e e p e r c e n t of the Norwegian and about half
the S w e d i s h fleet is e n g a g e d in transport between foreign
p o r t s ; more than 80 p e r c e n t of the Swedish fleet is e n g a g e d in
s u c h t r a n s p o r t . ( A k t u e l t i handelspolitiken, n o . 5, 1974) A c c o r d i n g to estimates, 83.4 p e r c e n t of the Norwegian tonnage
( s h i p s o v e r 500 g r o s s r e g i s t e r e d tons only) was e n g a g e d in
t r a n s p o r t loading or unloading in a developing c o u n t r y port in
1978.
The net income to Norwegian s h i p o w n e r s of transport
with d e v e l o p i n g countries can be estimated at more than 2
billion k r o n e r p e r y e a r ( 1 9 7 7 ) .
T h e code on liner c o n f e r e n c e s does not seriously affect
the s h i p p i n g i n d u s t r y , since only 3 p e r c e n t of the Norwegian
tonnage is e n g a g e d in that m a r k e t .
It is feared that the liner
conference formula will be applied to other s h i p p i n g t r a d e s ,
especially tank and b u l k , which has prompted the government
to side with the S h i p o w n e r s ' Association and oppose the c o d e .
A t U N C T A D V , the Norwegian Foreign Minister, Mr. F r y d e n l u n d , announced that the government is now p r e p a r e d to
a c c e d e to the code p r o v i d e d the alternative formula which
Norway has s p o n s o r e d , a 40/60 d i v i s i o n , is a c c e p t e d .
This
formula p r e s u p p o s e s that d e v e l o p i n g countries r e c e i v e 40
p e r c e n t of the t r a d e , while the r e s t is to be subject to i n ternational competition, in p r a c t i c e among s h i p o w n e r s in the
70
WESTERN EUROPE AND THE NIEO
industrialized world.
Whether s h i p o w n e r s and the government
will e v e n t u a l l y a c c e p t this formula for tank and bulk t r a n s p o r t
is not c l e a r .
T h e r e are political r e a s o n s , i n c l u d i n g p r e s s u r e from
d e v e l o p i n g c o u n t r i e s , behind this c h a n g e i n p o l i c y .
Another
probable e x p l a n a t i o n , h o w e v e r , is the fact that since the
mid-1970s, S c a n d i n a v i a n s h i p o w n e r s h a v e i n c r e a s i n g l y Invested
in and become e s t a b l i s h e d in d e v e l o p i n g c o u n t r i e s to c a p t u r e
or p r e s e r v e f r e i g h t markets and to i n c r e a s e profitability by
avoiding r e g u l a t i o n s , t a x e s , and the h i g h c o s t s o f o p e r a t i n g
from the home c o u n t r y .
So f a r , v e r y few Scandinavian s h i p s
h a v e been r e g i s t e r e d i n f l a g - o f - c o n v e n i e n c e o r o p e n - r e g i s t r y
c o u n t r i e s ; at the b e g i n n i n g of 1978, the number of s u c h
r e g i s t r a t i o n s w e r e 36 for Norway and 9 for S w e d e n . (24) E v e n
t h e s e r e g i s t r a t i o n s , h o w e v e r , ' seem to be on the i n c r e a s e .
THE MAIN O B S T A C L E S TO THE NIEO IN SCANDINAVIA
P r e s e n t Policies:
An O v e r v i e w
We h a v e d e s c r i b e d and d i s c u s s e d t h e actual policies of the
S c a n d i n a v i a n c o u n t r i e s toward d e v e l o p i n g c o u n t r i e s in some
selected areas.
T h e conclusions to be d r a w n can be summarized t h u s :
1.
2.
3.
4.
5.
There is,
r e l a t i v e t o other i n d u s t r i a l i z e d c o u n t r i e s ,
p r o g r e s s i v e n e s s in S w e d e n and Norway in their officially
stated policy.
In actual life, h o w e v e r , the p r o g r e s s i v e c h a r a c t e r of
S c a n d i n a v i a n policy is modified by the realities of the
international economy and the n e c e s s i t y to compete in a
t o u g h international e n v i r o n m e n t .
Scandinavian capital
does not b e h a v e much differently from capital in o t h e r
industrialized countries.
The s t a t e , a mixed economy, is
as much the a s s i s t a n t of capital as i t s m a s t e r .
In all the Scandinavian c o u n t r i e s , labor p l a y s an i n fluential r o l e .
O r g a n i z e d labor seems in many i s s u e a r e a s
to s h a r e common i n t e r e s t s with c a p i t a l , although in some
c a s e s d i v e r g i n g i n t e r e s t s are important.
T h e a p p a r e n t contradictions b e t w e e n s t a t e d and actual
policy a r e p a r t l y e x p l a i n e d b y the n e c e s s i t y o f adapting
to the international e n v i r o n m e n t , which is d i v e r g e n t ,
p a r t l y by the need to accommodate conflicting g r o u p
i n t e r e s t s domestically.
T h e NIEO as an i s s u e is losing g r o u n d in political milieus
and the mass media.
T h e u r g e , b y capital especially and
in p a r t i c u l a r i n d u s t r y , to Internationalize the economy and
to compete within the "new international division of labor"
SCAN DIN A VIA/LIKE-MINDED C O U 1 N T K 1 K S .
71
is more and more becoming a major c o n c e r n .
In this
p r o c e s s , the i n t e r e s t s of capital and of labor may c o n flict.
T h i s may affect NIEO policies n e g a t i v e l y especially
as long as t h e r e is an economic c r i s i s , b u t it could also
g i v e rise to new coalitions between labor in S c a n d i n a v i a
and w o r k e r s and p e a s a n t s in developing c o u n t r i e s .
An i s s u e approach to Scandinavian policies would g i v e the
following o v e r a l l v i e w :
As far as development a s s i s t a n c e is
concerned,
the S c a n d i n a v i a n c o u n t r i e s are certainly p r o g r e s s i v e compared with o t h e r industrialized countries both in
the volume of ODA and how and to whom it is g i v e n .
There
i s , on the other hand, a g r o w i n g t e n d e n c y to link ODA to
e x p o r t and i n d u s t r y i n t e r e s t s in all the c o u n t r i e s .
This goes
along with an i n c r e a s i n g use of e x p o r t c r e d i t s , s t a t e s u b s i d i e s
for i n d u s t r y a n d , not the l e a s t , a g r o w i n g internationalization
of important i n d u s t r y and s e r v i c e s e c t o r s .
R e s t r i c t i v e policies
toward imports from d e v e l o p i n g countries are maintained and,
in some c a s e s , e v e n f u r t h e r h a r d e n e d .
At the same time,
trade policies toward other industrialized countries are f u r t h e r
liberalized a c c o r d i n g to the requirements imposed by i n ternational agreements within EFT A and with the European
Community.
T h e s t r u c t u r a l i s t c r i t i q u e of the p r e v a i l i n g world o r d e r is
less p r o n o u n c e d .
I n s t e a d , the s t r e s s is on i n t e r d e p e n d e n c e
and a "life-boat" view of the w o r l d .
S u c h a vision has been
p r e s e n t in Scandinavian world outlook but has g i v e n way to a
more critical view in the mid-70s.
T h e r e is still a willingness
to adopt a c o n c e s s i o n a r y attitude as long as it does not
seriously
hurt
national,
or
important
sectoral,
economic
interests.
When it d o e s , as when nationalization of foreign
investments and regulation of shipping m a r k e t s , the S c a n dinavian g o v e r n m e n t s seem p r e p a r e d to adopt a d e f e n s i v e ,
e v e n completely n e g a t i v e , a t t i t u d e .
T h e Economic C r i s i s
With s t r o n g labor unions and social democratic p a r t i e s the
i n t e r e s t s of o r g a n i z e d w o r k e r s are bound to h a v e an effect on
the economic p o l i c y .
How g r e a t is a matter of d i s p u t e .
The
s t r o n g Scandinavian emphasis on maintaining full employment
i s , h o w e v e r , an indication that the i n t e r e s t s of labor are
backed by the.state.
T h e relationship between a policy of full employment and
of fighting inflation has been a matter of debate for some time.
I n d u s t r y h a s made its influence felt in o r d e r to h a v e the
government more a c t i v e l y fight inflation.
A c c o r d i n g to i n d u s t r y , t h e high wage l e v e l seemed to p r i c e important s e c t o r s
of i n d u s t r y out of world m a r k e t s .
Wage i n c r e a s e s are now
72
WESTERN EUROPE AND THE NIEO
frozen with the s u p p o r t of t h e labor u n i o n s .
T h i s will last
until the s p r i n g of 1980.
T h e s u p p o r t of labor is conditioned
on the government b e i n g able to hold down inflation so that
w a g e e a r n e r ' s real income on the a v e r a g e is not r e d u c e d .
S e v e r a l economists and labor g r o u p s a r g u e that t h e lack of
competitiveness of Norwegian i n d u s t r i e s is not only d u e to h i g h
w a g e s but to the lack of marketing s k i l l s , bad management and
p l a n n i n g , and irrational use of r e s o u r c e s .
Sweden has had a slower g r o w t h in p r i c e s than Norway in
the same p e r i o d ; Finland and p a r t i c u l a r l y Denmark h a v e had
an e v e n slower g r o w t h . ( 2 5 )
T h e Danish policy has thus been
c l o s e r to the West German anti-inflation policy than the
S c a n d i n a v i a n full-employment p o l i c y , a conclusion that is
w a r r a n t e d if the cost t r e n d is compared with employment
f i g u r e s . We h a v e summarized data on some basic i n d i c a t o r s of
the economic and social situation in the Scandinavian c o u n t r i e s
and Finland, in table 4 . 4 .
T h e s e data show that w h e r e a s
Denmark a n d Finland h a v e unemployment f i g u r e s well a b o v e the
OECD a v e r a g e of about 5 p e r c e n t ( 1 9 7 8 ) , S w e d e n and Norway
a r e among the b e s t at maintaining full employment.
T h e r e are s t r o n g indications that the S w e d i s h and the
Norwegian policies a r e b e i n g c h a n g e d toward the West German
model - c u r b i n g inflation and a c c e p t i n g some unemployment as
unavoidable in o r d e r to improve the competitiveness of the
industry.
Norwegian unemployment f i g u r e s h a v e gone u p o v e r
the last y e a r and a r e e x p e c t e d to increase f u r t h e r , despite
r e c e n t Improvements in the e x p o r t s e c t o r .
T h e Norwegian
t r a d e balance has been extremely u n f a v o r a b l e , c a u s i n g s e v e r e
balance of payment p r o b l e m s , a g g r a v a t e d by commitments d u e
to a 20 billion dollar f o r e i g n debt ( 1 9 7 8 ) .
T h i s trade deficit
has b e e n c o n s i d e r a b l y r e d u c e d d u r i n g the first p a r t of 1979.
T h e S w e d i s h e x p e r i e n c e is similar.
T h e c r i s i s hit
S w e d e n later than in most o t h e r i n d u s t r i a l i z e d c o u n t r i e s
b e c a u s e the state i n t e r v e n e d to c h e c k it and b e c a u s e important
s e c t o r s o f t h e S w e d i s h e x p o r t i n d u s t r y had been r e s t r u c t u r i n g
o v e r the l a s t couple of d e c a d e s in o r d e r to maintain competitiveness internationally.
When it hit at the end of 1975
and d u r i n g 1 9 7 7 , it s p a r k e d off another round of demands for
rationalization
and
other
restructuring
measures.
State
i n t e r v e n t i o n , both in Norway and S w e d e n , is of a r a t h e r
short-terra t y p e and c a n n o t , t h e r e f o r e , be financed indefinitely.
If the r e c e n t improvements in the e x p o r t performance
do not p e r s i s t , d r a s t i c r e s t r u c t u r i n g measures will h a v e to be
taken.
NIEO demands will h a r d l y play a n y role in d i s c u s s i o n s
about t h e s e m e a s u r e s .
Capital is making plans a c c o r d i n g to
e x p e c t e d developments in the International division of labor
and for the measures t h e s e developments imply.
Irrespective
of w h e t h e r industrial investments meet NIEO p r i n c i p l e s s u c h as
a real t r a n s f e r of r e s o u r c e s , appropriate t e c h n o l o g y , maximum
T a b l e 4 . 4 . A Socioeconomic Profile of the Nordic C o u n t r i e s , 1978
(Indicators Calculated from L a t e s t Available Monthly Data)
Consumer
prices
Money
supply
Jobless
total
Industrial
production
Industrial
wages
Unemployment
rate
Percent
Percent change over 6
months earlier
Percent change over 12
months earlier
Export as percent
of import
1)
in latest
month
in same
month
last year
73
Finland
6.5
12
•20
+1.5
5.4
7.4
116
102
Norway
8.0
18
+60
+6.5
4.3
1.8
78
62
Sweden
7.5
11
0
-2
1.4
2.1
114
104
Denmark
7.0
19
-11
+20.4
3.0
9.9
77
79
2)
1) For Finland, Norway, and Sweden from "Labour sample force" and for Denmark from "Employment
office s t a t i s t i c s . " Figures from December 1978.
The figure according to the Norwegian employment
authorities went up to 2.2% for Sweden and 2.1% for Norway, as of April 1979.
2) For 1979, the Norwegian Bureau of Statistics reports on trade surplus as exports surpass imports for
the first time since the mid-70s.
Source:
VISION, January and February 1979;
ILO Labour Statistics, 1/1979.
74
WESTERN EUROPE AND THE NIEO
use of local r e s o u r c e s , e t c . , the mere location of i n d u s t r y in
d e v e l o p i n g c o u n t r i e s may be r e f e r r e d to by capital as sufficient proof that the NIEO is b e i n g implemented.
Host
g o v e r n m e n t s in many d e v e l o p i n g c o u n t r i e s seem willing to
a c c e p t foreign i n v e s t m e n t s almost u n c o n d i t i o n a l l y .
In o t h e r
w o r d s , NIEO may be used as an e x c u s e for internationalizing
and t r a n s f e r r i n g i n d u s t r i a l production to " l o w - c o s t c o u n t r i e s . "
T h u s it may be used to c o u n t e r a c t p r o t e s t s by labor w h i c h ,
t h r o u g h the positive attitude of the labor p a r t i e s , are p o litically committed to favor NIEO m e a s u r e s .
In a situation of h i g h and rising unemployment, labor will
be u n d e r p r e s s u r e .
On the one h a n d , it will want to fight
i n c r e a s i n g unemployment and oppose any job r u n a w a y s d i rectly.
Labor will t h u s be u n d e r p r e s s u r e to a c c e p t some
r e s t r u c t u r i n g for the s a k e of making i n d u s t r y more efficient
(competitive) and to s e c u r e j o b s . S i n c e d e v e l o p i n g c o u n t r i e s
do not p o s s e s s the same amount of b a r g a i n i n g power v i s - a - v i s
the S c a n d i n a v i a n s a s d o o t h e r i n d u s t r i a l i z e d c o u n t r i e s , t h e y
will p r o b a b l y lose out in competing for i n v e s t m e n t s and markets
u n l e s s they a r e accorded p a r t i c u l a r l y a d v a n t a g e o u s
conditions.
As a l r e a d y n o t e d , r e s t r u c t u r i n g h a s a l r e a d y gone a long
way in S w e d e n .
T h i s means that the potential for further
r e s t r u c t u r i n g may be limited.
E v e n if there were not e n o u g h
popular opposition to stop it, g o v e r n m e n t , l a b o r , and i n d u s t r y
may find it difficult to p r o c e e d for fear that the social fabric
will s u f f e r .
In N o r w a y , w h e r e r e s t r u c t u r i n g and adjustment h a v e not
b e e n c a r r i e d out as ambitiously as e l s e w h e r e in S c a n d i n a v i a ,
the potential may be g r e a t e r .
Y e t so far there has been
e f f e c t i v e popular opposition to i t .
Part of the explanation w h y
there was a majority "no" to EC e n t r y in 1972 is the f e e l i n g ,
S t r o n g e s t in the p e r i p h e r a l r e g i o n s and among i n d u s t r i a l
w o r k e r s , that e n t r y would mean centralization and o t h e r forms
of r e s t r u c t u r i n g r e p r e s e n t i n g a threat to employment in the
r e g i o n s where people l i v e . (26)
A d d i n g to that, small farmer
and fishing communities r e p r e s e n t another s t r o n g force a g a i n s t
restructuring.
F i n a l l y , some of the most l a b o r - i n t e n s i v e ,
l o w - s k i l l and low-profitability i n d u s t r i e s , which capital p r e s e n t s as c a n d i d a t e s for r e s t r u c t u r i n g , a r e located in communities which are t y p i c a l l y monocultural.
T h i s holds for
t e x t i l e , c l o t h i n g , c e r t a i n raw material p r o c e s s i n g i n d u s t r i e s , ,
and p a r t s of the p a p e r and wood i n d u s t r y .
Popular r e s i s t a n c e
to c h a n g e is p a r t i c u l a r l y s t r o n g in t h e s e r e g i o n s as long as no
public or p r i v a t e a g e n c y i n t e r v e n e s in the r e s t r u c t u r i n g
p r o c e s s to offer a l t e r n a t i v e employment.
T h e s o c i a l , c u l t u r a l , and economic p r o c e s s e s in the
S c a n d i n a v i a n s o c i e t i e s are r e l a t i v e l y t r a n s p a r e n t and i d e n t i fiable.
Y e t , the politics of these p r o c e s s e s at the m a c r o - l e v e l
are made up of a l l i a n c e s , and a v a r i e t y of social c o n t r a c t s . In
the mixed Scandinavian economies, the state is a set of admini s t r a t i v e s t r u c t u r e s that s e r v e as a framework for negotiating
the social o r d e r and the distribution of r e s o u r c e s , among
group
interests
and
between
interests
in
the
macros o c i e t y . (27)
N o r w a y ' s import of the 20 raw materials listed in the
UNCTAD of potential IPC candidates amount to 4.2 billion
N . k r . p e r y e a r , while N o r w a y ' s e x p o r t s ( p r a c t i c a l l y all o f i t
iron and c o p p e r ) amount to 700 million N . k r . ( 1 9 7 5 ) . A 100
p e r c e n t i n c r e a s e in the p r i c e s of these raw materials in world
markets r e p r e s e n t s an i n c r e a s e in the GNP of 1.0 p e r c e n t and
an i n c r e a s e in the consumer p r i c e index of 2.6 p e r c e n t . With
no tax r e d u c t i o n s to stimulate demand, employment would be
down 0.7 p e r c e n t ; balance of payment would be down by 500
million N . k r . , and the volume of the GNP would be r e d u c e d by
0.9 p e r c e n t .
With tax r e d u c t i o n s , the balance of payments
deficit will i n c r e a s e by 1.4 billion N . k r . , while GNP volume,
p r i v a t e consumption, and employment will remain s t a b l e . ( 2 8 )
With the p r e s s u r e on the employment market plus s e r i o u s
problems with the balance of p a y m e n t s , a major p r i c e hike on
raw materials would clearly meet with opposition. S u c h a h i k e ,
e v e n if it were l e s s than the 100 p e r c e n t used in the model,
would s a v e employment in some metal i n d u s t r y s e c t o r s .
But
d e s p i t e the political s t r e n g t h of t h e s e , they would not h a v e
l e v e r a g e e n o u g h - not e v e n within the Metalworkers' F e d eration - to g e t a price increase a c c e p t e d .
In another s t u d y , the e f f e c t s on capital, l a b o r , c o n s u m e r s , and macroeconomic parameters (balance of p a y m e n t s ,
e t c . ) were a n a l y z e d for imports of goods from "low-cost
c o u n t r i e s , " in p a r t i c u l a r d e v e l o p i n g c o u n t r i e s .
T w o alternat i v e s were c o n s i d e r e d :
i n c r e a s e d volume of imports with no
p r i c e c h a n g e , and r e d u c e d p r i c e s on imports t h r o u g h tariff
r e d u c t i o n s with no c h a n g e in volume.
T h e r e s u l t s show that
r e t u r n on capital is n e g a t i v e l y a f f e c t e d , in both c a s e s .
In
those b r a n c h e s that do not compete with l o w - p r i c e d imports,
h o w e v e r , capital o w n e r s would gain from an i n c r e a s e d import
volume, b e c a u s e t h e y would be u s i n g imported goods as i n p u t s
in their p r o d u c t i o n .
Consumers would gain from both measures as p r i v a t e
consumption I n c r e a s e s .
Employment would suffer under both
a l t e r n a t i v e s , which is o b v i o u s since low p r i c e d goods account
for most of the domestic i n d u s t r y ' s market.
T h e r e s u l t s show,
however,
that the unemployment-creating effect is widely
different in the two c a s e s :
The effect is almost four times as
much when Import p r i c e s are r e d u c e d as when the import
volume is i n c r e a s e d . (29)
T h e s e r e s u l t s a r e , n e e d l e s s to s a y , the r e s u l t of a n a l y s i s
with a s h o r t - t e r m p e r s p e c t i v e and based on a number of
assumptions that can b e q u e s t i o n e d .
They do g i v e , however,
some c l u e s to policy options and c h o i c e s . I n c r e a s e d volume of
Imports seems to be the t y p e of policy that c a u s e s the least
problems for the Norwegian economy. T h i s policy option seems
to be a d v a n t a g e o u s to other factions of capital than the one
running
the domestic market i n d u s t r y .
I n c r e a s e d market
a c c e s s seems to be the logical choice if some concession is to
be made to d e v e l o p i n g c o u n t r i e s ' demands.
So f a r , h o w e v e r ,
capital and labor in the s e c t o r s competing with l o w - p r i c e d
imports h a v e jointly and s u c c e s s f u l l y o p p o s e d s u c h measures
and h a v e s e c u r e d an i n c r e a s i n g l y protectionist policy from the
government.
T h i s seems to p r o v i d e e v i d e n c e that in q u e s t i o n s
where t h e r e is no s t r o n g v e s t e d i n t e r e s t domestically there is
no u r g e to make a c h a n g e .
T h e a n a l y s i s r e f e r r e d to h e r e seems to indicate that
i n c r e a s i n g p r o d u c t i v i t y p e r man-hour t h r o u g h technical i n novations could mean as much of a loss of employment as would
NIEO c o n c e s s i o n s . (30)
V e r y few people seem to be willing to
d i s c u s s the NIEO in terms of s u c h comparisons, y e t r e s t r u c t u r i n g due to technical innovation seems to be a c c e p t e d as
unavoidable.
T h e r e i s , h o w e v e r , a g r o w i n g questioning of
this in the S c a n d i n a v i a n s o c i e t i e s , among g r o u p s a c t i v e in the
ecological movement.
E v e n among w e l l - r e p u t e d economists,
there a r e v o i c e s who ask for more emphasis in c r i t e r i a o t h e r
than output efficiency and for j o b - c r e a t i o n in n o n - p r o d u c t i v e
b u t socially r e l e v a n t o c c u p a t i o n s .
In S w e d e n , h i g h e r p r i c e s on raw materials would benefit
comparatively l a r g e s e c t o r s of the e x p o r t economy, notably the
iron and f o r e s t r y i n d u s t r i e s .
T h e s e s e c t o r s are up against an
increasingly
competitive
international
climate
where
new
p r o d u c e r s with comparative a d v a n t a g e s offer a g r e a t e r output
at c h e a p e r p r i c e s .
O v e r p r o d u c t i o n combined with the coming
of new competitors t h u s enforce an open economy, which so far
has adjusted a c t i v e l y and sometimes a g g r e s s i v e l y to the
international environment.
A n o t h e r factor of i n c r e a s i n g importance to Sweden is that
comparative a d v a n t a g e s are no l o n g e r controlled nationally b u t
b y corporations o p e r a t i n g i n t e r n a t i o n a l l y .
S u c h corporate
know-how,
information,
organizational a b i l i t y ,
and
other
a d v a n t a g e s a r e internationally mobile b y n a t u r e .
The present
policy of capital in the Scandinavian c o u n t r i e s is to r e s e r v e
production in these countries for a d v a n c e d p r o d u c t s with a
h i g h - t e c h n o l o g y component.
T h e role of d e v e l o p i n g c o u n t r i e s - w h e t h e r the goal is r e f e r r e d to as the NIEO 25 p e r c e n t
t a r g e t or the establishment of a 'new international division of
labor
- would be to take o v e r l e s s t e c h n o l o g y - i n t e n s i v e
industries.
And the role of the s t a t e , as a s s i g n e d by i n dustrial l e a d e r s , would be to p r o v i d e new jobs for laid-off
labor in an e v e r e x p a n d i n g s e r v i c e s e c t o r , or simply to finance
more l e i s u r e time.
More and more people in the Scandinavian c o u n t r i e s
question the wisdom of s u c h a p o l i c y , which is going to lead to
1
77
i n c r e a s i n g conflict o v e r policy in these s o c i e t i e s .
Another
round of automation by the introduction of the l a r g e - s c a l e use
of microprocessing techniques will further e x a c e r b a t e this
conflict.
Public Opinion
During the last ten to fifteen y e a r s , Scandinavian public
opinion on development i s s u e s has been analyzed t h r o u g h
nation-wide polls and s t u d i e s .
T h e s e show a growing a w a r e n e s s of an i n c r e a s i n g although highly mixed s u p p o r t to action
in f a v o r of d e v e l o p i n g c o u n t r i e s .
Since the role of public
opinion in these matters is r e l a t i v e l y important, some major
t r e n d s in the evolution of public opinion will be d i s c u s s e d . We
will draw upon s t u d i e s of S w e d e n ( 3 1 , 3 2 ) and N o r w a y . (33,34,35)
T h e r e is considerable similarity between S w e d i s h and Norwegian
opinion g r o u p s . ( 3 6 , 3 7 )
Since we shall primarily make use of
Norwegian data, we may only make i n f e r e n c e s from this data
about the S w e d i s h c a s e .
Most of the polls h a v e c e n t e r e d on people's attitudes
toward development aid a p p r o p r i a t i o n s .
T h e r e has been an
i n c r e a s i n g l y positive trend in public opinion o v e r the y e a r s .
T h i s , h o w e v e r , is an o b s e r v a t i o n that is h i g h l y conditional in
at least two r e s p e c t s .
F i r s t , favorable attitudes are s h a r e d by
between 60 and 70 p e r c e n t of the p u b l i c , as long as the
question is put in general t e r m s .
When the actual volume
(amount e x p r e s s e d in millions of kroner) of aid is mentioned to
r e s p o n d e n t s , p o s i t i v e r e s p o n s e s d r o p to about 50 p e r c e n t .
T h i s 50/50 division of the public seems to be r e l a t i v e l y s t a b l e .
S e c o n d , an increase in ODA a p p r o p r i a t i o n s , a c c o r d i n g to
public opinion p o l l s , r a n k s low among measures to be taken by
the g o v e r n m e n t .
It does not seem to be a v e r y salient
issue.(38)
A few nationwide polls go somewhat d e e p e r into the
s t r u c t u r e of opinion.
T h e y reveal t h r e e or four explanations
for underdevelopment and p o v e r t y in the T h i r d World.
One
explanation v i e w s these phenomena as natural d e f i c i e n c i e s , and
a second view emphasizes e n d o g e n o u s political f a c t o r s .
A
third explanation views e x o g e n o u s factors as the main c o u r s e .
Finally t h e r e is a point of view that combines s e v e r a l of the
a b o v e listed f a c t o r s .
In a poll taken in 1977, 60 p e r c e n t
r e f e r r e d to e n d o g e n o u s deficiencies in developing countries as
the main explanation; illiteracy and overpopulation were the
two most cited f a c t o r s .
About 24 p e r c e n t mentioned e x o g e n o u s
f a c t o r s , s u c h as colonial rule and foreign exploitation, as the
main r e a s o n , while 7 p e r c e n t believed that the foremost reason
was to be found in natural f a c t o r s , s u c h as lack of r e s o u r c e s ,
climate, e t c .
78
When people were a s k e d which remedies t h e y t h o u g h t
were the most important, t h e y first of all mentioned t r a d e
reform. S i x t y - f o u r p e r c e n t thought this to be the most important NIEO i s s u e ; only 11 p e r c e n t r e f e r r e d to development
a i d . (39) T h e emphasis on t r a d e improvements is e v e n s t r o n g e r
in S w e d i s h public opinion. (40)
T h e Norwegian data may
indicate that p e o p l e s ' v i e w s are not v e r y c o n s i s t e n t .
If t h e y
s e e e n d o g e n o u s factors as the most important ones in e x p l a i n ing u n d e r d e v e l o p m e n t , c h a n g i n g those factors t h r o u g h inter
alia development aid would also seem to be more important.
Pollsters also a s k e d questions about market a c c e s s and
raw material p r i c e s .
On the market a c c e s s i s s u e , public
opinion in Norway* t a k e s a more l i b e r a l , less protectionist
standi
fifty p e r c e n t favor tariffs on goods imported from
other i n d u s t r i a l i z e d c o u n t r i e s , 25 p e r c e n t , only on imports
from d e v e l o p i n g c o u n t r i e s .
(A similar p a t t e r n has been shown
to a p p l y to United S t a t e s public o p i n i o n . ) (41) When the i s s u e
is shown as d o w n - t o - e a r t h , s u p p o r t of liberalism p r e d i c t a b l y
decreases.
T h u s , 31 p e r c e n t in a 1977 poll t h o u g h t that
textile or o t h e r manufactured goods o u g h t to be imported e v e n
if it c r e a t e d problems for Norwegian i n d u s t r y , while 41 p e r c e n t
thought otherwise.
T h e c o r r e s p o n d i n g f i g u r e s in a poll t a k e n
in 1964 were 24 and 66 p e r c e n t , r e s p e c t i v e l y . T h e r e w a s , in
o t h e r w o r d s , a s l i g h t increase in s u p p o r t for the NIEO. And
in the 1977 sample, the n e g a t i v e r e s p o n s e was r e d u c e d from 41
to 28 p e r c e n t when the option of the state g u a r a n t e e i n g new
j o b s was mentioned.
T h i s g e n e r a l public view c o n t r a s t s with that of a special
t a r g e t g r o u p , the t e x t i l e w o r k e r s .
No systematic s t u d y of
their view h a s been u n d e r t a k e n .
But it is symptomatic of
their attitude that some textile w o r k e r s p u b l i s h e d an a d vertisement in major Norwegian n e w s p a p e r s s t r o n g l y o p p o s i n g
NIEO d e m a n d s . Since o r g a n i z e d labor is h i g h l y Influential, the
s p e c i f i c g r o u p i n t e r e s t is l e s s promoted than the former when
the p r a c t i c a l state policy is determined.
On raw material p r i c e s , people seem to favor another
a s p e c t of liberal economic p o l i c y :
About 50 p e r c e n t of the
1977 sample t h o u g h t that p r i c e s o u g h t to be determined by the
market mechanism, while 36 p e r c e n t a c c o r d d e v e l o p i n g c o u n t r i e s the r i g h t to demand h i g h e r p r i c e s . Almost 75 p e r c e n t of
the public said t h e y a g r e e d that Norway should s u p p o r t the
demand for h i g h e r raw material p r i c e s , while only 15 p e r c e n t
said they were against i t .
T h e q u e s t i o n , h o w e v e r , may h a v e
been too p o s i t i v e l y l e a d i n g . ( 4 2 )
T h i r t y - t h r e e p e r c e n t of the Norwegian public b e l i e v e s
that conditions in d e v e l o p i n g c o u n t r i e s will affect them, while
about 40 p e r c e n t b e l i e v e they will n o t .
T h o s e who believe
they will be a f f e c t e d also point to h i g h e r p r i c e s for raw
materials as the most likely s o u r c e of Impact. T h e n e x t likely
s o u r c e is b e l i e v e d to be a c u t - d o w n in the consumption of
Western p r o d u c t s in d e v e l o p i n g c o u n t r i e s as a r e s u l t of h i g h e r
g r o w t h and t h u s g r e a t e r domestic use of r e s o u r c e s in the
developing countries.
Mass Consumerism v e r s u s the "New Life S t y l e "
In S w e d e n , a pamphlet was p u b l i s h e d in 1977 entitled "How
much is e n o u g h ? "
(Hur m y c k e t ar l a g o m ? ) .
T h e pamphlet
c r e a t e d a heated public debate as it a r g u e d for r e d u c e d
g r o w t h and consumption in a way which many found original
and p r o v o c a t i v e .
It advocated emphasizing quality of l i f e , not
only material living s t a n d a r d s . (43)
T h e Swedish intellectual
milieu has taken up the debate and drawn implications of the
"new life s t y l e " message both at the domestic(44) and the
international l e v e l . ( 4 5 , 4 6 )
Much the same attitude has d e v e l o p e d in Norway t h r o u g h out the 7 0 s .
T h e r e has been a g r o w i n g " g r e e n wave" b a s e d
on a coalition of c o n s e r v a t i o n i s t s , e c o l o g i s t s , and g r o u p s
a d v o c a t i n g r e d u c e d g r o w t h and an internally balanced e c o n omy.
T h i s coalition c u t s a c r o s s established p a r t y l i n e s , b u t
the new policy has in p a r t i c u l a r influenced two or three of the
parties.
In addition, a g r a s s - r o o t s movement called "Future in
Our Hands" (Fremtiden i v a r e hender) is playing an important
role as a mobilizing force and a p r e s s u r e - g r o u p on the political
milieu. (47)
T h e practical political impact of these new movements is
so far not g r e a t .
T h e reason for this seems to be a w e a k n e s s
in plans for the implementation of the new t h i n k i n g r a t h e r than
in a l a c k of popular s u p p o r t .
T h e inertia in the economic
s y s t e m and s t a t e p r a c t i c e i s v e r y c l e a r :
the d a y - t o - d a y
fighting of the c r i s i s and the need to think about maintaining
o n e ' s position at the next election t a k e s p r e c e d e n c e o v e r
long-term t h i n k i n g and p l a n n i n g .
T h e logic of the capitalist
s y s t e m is to p r o d u c e more and to consume more. T h i s is how
employment is p r e s e r v e d . T h i s recipe has been coupled with a
policy of stimulating demand as e x p r e s s e d under social d e mocracy in its r e s p o n s e to periodic economic s t a g n a t i o n .
T h e problem does not seem to be that the public feels
t h r e a t e n e d by a new p o l i c y , at least not at the general level of
thinking.
In a poll taken a few y e a r s a g o , 52 p e r c e n t of the
Norwegians t h o u g h t the l i v i n g s t a n d a r d in their c o u n t r y was
too h i g h , while 41 p e r c e n t found it appropriate and only 1
p e r c e n t t h o u g h t it too low.
T h e s e f i g u r e s are almost totally
matched b y S w e d i s h public opinion d a t a :
Forty-nine percent
were p r e p a r e d to r e d u c e their l i v i n g s t a n d a r d , while 35
p e r c e n t felt s y m p a t h y for the idea, 11 p e r c e n t opposed it
somewhat and only 3 p e r c e n t o p p o s e d it s t r o n g l y .
A l s o , problems of r e s o u r c e c o n s e r v a t i o n and pollution of
the environment now r a n k as i s s u e s o v e r which people are
v e r y much c o n c e r n e d .
T h e r e is latent s u p p o r t for the e c ological message that an i n c r e a s i n g l y material living s t a n d a r d
r e d u c e s the quality of life.
T h e s e i d e a s , h o w e v e r , do not y e t d e c i d e the election of
g o v e r n m e n t nor the p r a c t i c e s of the s t a t e .
T h e Missing L i n k :
No V e s t e d Popular I n t e r e s t
Labor union and social democratic l e a d e r s who a c t i v e l y promote
NIEO policies are few in number b u t not without i n f l u e n c e .
T h e y h a v e been f i g h t i n g a losing battle since 1977 and a c c o r d i n g to many of them the main reason is the lack of a
v e s t e d popular i n t e r e s t in N I E O - t y p e p o l i c i e s .
In o t h e r
w o r d s , the public has not g r a s p e d the v a l u e of i n t e r d e p e n d e n c e with the d e v e l o p i n g w o r l d .
A c c o r d i n g to this h y p o t h e s i s , what is l a c k i n g is a
network of l i n k a g e s between Norwegian w o r k e r s and c o n sumers.
A s the l a t t e r c a t e g o r y i s l a r g e l y u n o r g a n i z e d and the
former is well o r g a n i z e d , conflicts of i n t e r e s t may o c c u r . It is
the w o r k e r s ' d i s i n t e r e s t in NIEO policies that w o r r i e s pro-NIEO
leaders.
T h e i r solution is to c r e a t e markets in d e v e l o p i n g
c o u n t r i e s that Norwegian w o r k e r s can depend on for their
jobs.
If t h e s e w o r k e r s can be a s s u r e d of j o b s , they will be
p r e p a r e d to defend the i n t e r e s t s of d e v e l o p i n g c o u n t r i e s with
the same v i g o r as w o r k e r s in the e x p o r t s e c t o r defend t r a d e
interests of other industrialized countries in Norway.
T h e . l i n k a g e s t r a t e g y i s said t o b e p a r t l y behind the
s t r o n g effort to sell s h i p s to d e v e l o p i n g c o u n t r i e s . A c c o r d i n g
to one informant, h o w e v e r , the s t r a t e g y has not worked well
in this c a s e .
S h i p y a r d w o r k e r s h a v e not come out in f a v o r of
NIEO p o l i c i e s , although some labor g r o u p s in this i n d u s t r y are
c o n s i d e r e d among t h e most p r o g r e s s i v e and militant within
t h e i r labor f e d e r a t i o n .
C o n s u m e r s r e p r e s e n t a potential a l l y , b u t they lack
organization and h a v e little political l e v e r a g e . T h e r e are a few
consumer movements that h a v e potential.
In S w e d e n , r e l a t i v e l y s u c c e s s f u l campaigns to b o y c o t t South African goods
have been carried out.
In N o r w a y , a small nonprofit company
is importing Tanzanian instant c o f f e e , d i s t r i b u t i n g it t h r o u g h
some retail s t o r e chains and marketing it with the help of
volunteers.
T h e NIEO i s s u e became a major political i s s u e in S c a n d i navia only at the e n d of 1975 when r e p o r t s of the Lima
C o n f e r e n c e and the 7 t h Special S e s s i o n appeared in the media.
A preliminary content a n a l y s i s of the d e b a t e s on the foreign
minister's major s p e e c h to the Norwegian parliament r e v e a l s the
following o b s e r v a t i o n s :
F i r s t , the NIEO as an i s s u e r e c e i v e d
t h e h i g h e s t attention d u r i n g 1976 and 1977, p e a k i n g in 1 9 7 7 .
S e c o n d , the NIEO h a s been c o n s i d e r a b l y r e d u c e d in importance
as a foreign policy i s s u e as well as a domestic issue from 1978
onwards.
T h e c u r v e may h a v e p e a k e d h i g h e r in the case of Norway
than in the case of S w e d e n .
As one of the central Norwegian
policy makers put it, "We p u s h e d the NIEO i s s u e , in particular
the i s s u e of r e s t r u c t u r i n g at home, much too hard throughout
1976 and 1977 and almost got a boomerang effect out of i t .
People, especially industrial w o r k e r s , simply were not p r e p a r e d
for the m e s s a g e . "
T h i s g e n e r a l trend is probably equally
evident in the case of S w e d e n .
If these o b s e r v a t i o n s are
c o r r e c t , t h e r e is reason to e x p e c t l e s s a c t i v e s u p p o r t of NIEO
work
internationally
from
the
Scandinavian
governments.
At the l e v e l of politics, capital, and labor, NIEO s u p p o r t
is founded on a loose alliance of l e a d e r s who are dependent on
a s u p p o r t base that is d w i n d l i n g .
Moreover, other audiences
call for attention.
In both Norway and S w e d e n , there h a v e
been revitalizations of European continental b o n d s .
Almost
s e v e n y e a r s after a referendum t u r n e d down Norwegian
membership to the E C , the social democratic government
r e o p e n e d the debate on N o r w a y ' s relationship to the Community
s t r e s s i n g cultural and other t i e s .
At the same time, talks with
continental state and c o r p o r a t e l e a d e r s took place in o r d e r to
make o i l - f o r - i n d u s t r y investment deals with them. In S w e d e n ,
revitalization of EC ties are t a k i n g the form of the creation of
a new European Association s p o n s o r e d by social democratic and
l a b o r , as well as i n d u s t r i a l , l e a d e r s .
A c c o r d i n g to political
l e a d e r s in both c o u n t r i e s , t h e s e trends do not d i v e r t attention
and s u p p o r t from the NIEO.
For small c o u n t r i e s , h o w e v e r ,
the d a n g e r of an e i t h e r - o r solution is v e r y r e a l .
Resources
do not permit them to follow s e v e r a l lines of popular mobilization at the same time.
"Peer G y n t " Politics
The p i c t u r e that emerges from these o b s e r v a t i o n s is mixed and
a true mirror of the p r o c e s s e s at work in a mixed polity and
economy.
T h e r e are a p p a r e n t contradictions in the polity
r e g a r d i n g images and a t t i t u d e s .
On the one h a n d , t h e r e is
w i d e s p r e a d popular s u p p o r t for NIEO m e a s u r e s .
Restructuring
is called for on the b a s i s of efficiency and profitability, as
defined by c a p i t a l , not on the basis of a new conception of
society.
Nevertheless,
important g r o u p s d o harbor s u c h
c o n c e p t s and the future seems bound to offer more conflict
o v e r policy than was the c a s e d u r i n g the y e a r s of national
unity after World War II.
The
fragmentation
of
societal
goals
and
ideas
at
the
g r a s s - r o o t s is also r e p r e s e n t e d , t h o u g h to a l e s s e r e x t e n t , at
the h i g h e s t l e v e l s .
In that r e s p e c t , it was a matter of some
importance that a move to t r a n s f e r decision-making r e s p o n -
sibility on NIEO matters in Norway from the ministry of foreign
affairs to the ministry of t r a d e was b l o c k e d by political i n t e r vention t h r o u g h the Parliament.
T h e r e is a s t r o n g e r p r o NIEO mood in the former than in the l a t t e r since the l a t t e r
is known to follow a b u s i n e s s - a s - u s u a l policy when dealing
with d e v e l o p i n g c o u n t r i e s .
At the level of policy m a k e r s , the d i f f e r e n c e s of opinion
are e x p l a i n e d by the n e c e s s i t y to balance c o n t r a d i c t i n g g r o u p
i n t e r e s t s into one formula.
T h e solution is the Peer G y n t
posture.
I b s e n ' s a n t i - h e r o could a d d r e s s the main audience
and then p r e s e n t a different argument to the g a l l e r y in one
and the same s t r o k e .
T h e r e are Peer G y n t s all o v e r the world
and in all r a n k s ; the type is not only found in S c a n d i n a v i a .
But S c a n d i n a v i a n politicians h a v e to r e s p o n d to pro-NIEO
sentiments which c a r r y more weight in domestic policies than is
the case in o t h e r i n d u s t r i a l i z e d c o u n t r i e s with the e x c e p t i o n of
the N e t h e r l a n d s .
A good number of people really want to
p u s h the NIEO p u b l i c l y in o r d e r to c r e a t e a p r o g r e s s i v e
international image.
And the Norwegian g o v e r n m e n t promises
p r i o r i t y handling of i n d u s t r y ' s modernization plans and e x p o r t
d r i v e s and continues its policy of n o n i n t e r v e n t i o n in s h i p p i n g
affairs.
Both g o v e r n m e n t s at the same time k e e p r e p e a t i n g
their s t r o n g s u p p o r t for NIEO demands, a g r e a t number of
which are at o d d s with t h e measures j u s t mentioned.
One
month after the UNIDO meeting in Lima w h e r e the 25 p e r c e n t
goal was a g r e e d , the Norwegian government told Parliament
that the trade p a t t e r n with n o n - O E C D c o u n t r i e s would continue
u n c h a n g e d . ( P a r i . Report n o . 67, 1974-75)
Attention to NIEO is on the d e c l i n e .
T h i s is sometimes
c o v e r e d up in o r d e r not to c r e a t e more boomerangs from labor
or others.
One s u c h i s s u e , the p r o p o s e d readjustment fund,
has been d r o p p e d i n favor o f u s i n g e x i s t i n g f u n d s .
Readjustment m e a s u r e s would be met with h o s t i l i t y , w h e r e a s
u s i n g already e x i s t i n g funds would go u n n o t i c e d .
So f a r , no
s i n g l e case of NIEO-related readjustments h a v e been u n d e r taken.
B e c a u s e of e x t e r n a l and internal o b s t a c l e s to action, the
role of the S c a n d i n a v i a n g o v e r n m e n t s as mediators b e t w e e n the
c o r e n o r t h e r n and s o u t h e r n c o u n t r i e s i s s e v e r e l y r e s t r i c t e d .
T h e r e a r e , in addition, important c l e a v a g e s within the state
administration as to what policy to follow.
These cleavages
follow ideological or g e n e r a l political l i n e s .
One example of
this is a certain disagreement b e t w e e n those who wish to do
more in the "like-minded" g r o u p i n g and those who u r g e that
one should i n t e g r a t e e n t i r e l y in the OECD fold.
The latter
seem, in the practical political m a t t e r s , to h a v e gained g r o u n d
recently.
Another important s o u r c e of i n t r a - s t a t e conflict is
that different factions of state administrations are linked to
special s e c t o r i n t e r e s t s p u r s u i n g o p p o s i n g p o l i c i e s .
ALTERNATIVES
T h e main p u r p o s e of this r e p o r t has been to d e s c r i b e and
a n a l y z e o b s t a c l e s to the NIEO in S c a n d i n a v i a . The conclusion
to it can be formulated in two p a r t s :
f i r s t , among the i n d u s trialized c o u n t r i e s , the S c a n d i n a v i a n s are the most favorable to
NIEO demands; s e c o n d l y , in practical political action, their
b e h a v i o r does not differ a p p r e c i a b l y from that of other i n d u s t r i a l i z e d c o u n t r i e s , with the exception of development aid.
We also concluded that the r e a s o n s for this are to be found
both in e n d o g e n o u s and e x o g e n o u s f a c t o r s .
T h e argument is often h e a r d that with r e s p e c t to d e v e l o p i n g countries the S c a n d i n a v i a n s cannot operate alone, b u t
must coordinate action with the rest of the OECD c o u n t r i e s .
T h e y cannot do a n y t h i n g to promote NIEO internationally
unless o t h e r i n d u s t r i a l i z e d c o u n t r i e s do the same.
The implicit
r e a s o n for this is that this policy will c r e a t e a d i s a d v a n t a g e o u s
position to Scandinavian i n d u s t r i e s in International m a r k e t s .
T h e r e are a number of plausible reasons why the best
s t r a t e g y for d e v e l o p i n g c o u n t r i e s is to build t h r o u g h national,
c o l l e c t i v e , and regional s e l f - r e l i a n c e , and to r e l y less on the
international economic s y s t e m as an e n g i n e of g r o w t h and
development. (48,49)
S t i l l , t h e r e are l o g i c a l , economic as well
as political reasons to a d v o c a t e continued emphasis on taking
p a r t in the s y s t e m .
T h e Potentials and the Limitations of a "Like-minded
11
Group
Scandinavian NIEO politics at the 'international' level has
attempted to play the role of the moderator.
Sweden took part
in the C I E C , while N o r w a y ' s role at UNCTAD IV e a r n e d her
the chairmanship of the n o r t h - s o u t h committee.
T h e y both
belong to the s o f t - l i n e r s in OECD Group B and form the
b a c k b o n e of the "like-minded" g r o u p .
T h e s t a t e d goal of the g r o u p is to a d v a n c e the c a u s e of
the NIEO by e x e r t i n g political p r e s s u r e , not the least within
the O E C D . Its role is potentially g r e a t e r the more n o r t h - s o u t h
relations are c h a r a c t e r i z e d by confrontation.
T h i s is t r u e ,
h o w e v e r , only to a point.
If the confrontations were to
become too s t r o n g , t h e n the like-minded would h a v e to take
their national i n t e r e s t s into account and most likely side with
the r e s t of the n o r t h .
T h e like-minded approach is bound to
be g r a d u a l i s t .
T h e y are small c o u n t r i e s with little influence as
such.
Being small, t h e y also h a v e a v e s t e d i n t e r e s t in
p r e s e r v i n g the s y s t e m ;
T h e y are fragile because they are
open economies.
T h i s is why t h e y can b e t t e r s e e the need for
c h a n g e to accommodate NIEO demands.
At the same time,
h o w e v e r , t h e y h a v e to fall b a c k on b i g power positions in a
t o u g h n o r t h - s o u t h confrontation in o r d e r to be p r o t e c t e d .
A l s o , when negotiations move from principles to p r a c t i c a l
implementation, the like-minded seem to r e t r e a t to the imp e r a t i v e s of international competition.
Government h a s to s e e
to it that its policy does not g i v e i n d u s t r i e s a comparative
d i s a d v a n t a g e v i s - a - v i s competitors.
T h e like-minded position,
h o w e v e r , is c l o s e r to the maximum demands of the d e v e l o p i n g
countries.
T h e r e are o b v i o u s c o n s t r a i n t s o n the like-minded g r o u p .
F i r s t , one may question how like-minded t h e y really a r e .
At
some of the m e e t i n g s , the total number of participating c o u n tries r e a c h e d a d o z e n .
It included the United Kingdom u n d e r
the L a b o r g o v e r n m e n t . With the c u r r e n t B r i t i s h stand on some
k e y NIEO i s s u e s b e i n g closer to the United S t a t e s and West
German c o n s e r v a t i s m than the Scandinavian or Dutch p r o g r e s slvisra, one must r e a l l y ask whether t h i s g r o u p is s t r e t c h i n g
the concept of like-mindedness too f a r .
More members mean
potentially more weight and influence; b u t , as a matter of
f a c t , the impact of the g r o u p i n g has faded r a t h e r than i n c r e a s e d after it b e g a n with the original t h r e e , added the two
Nordic c o u n t r i e s , then included Belgium and A u s t r i a , and
finally ended up with the United Kingdom, Canada, A u s t r a l i a ,
and a few o t h e r s .
While the e x t e r n a l limitations, s u c h as the l a c k of i n fluence and the lack of international c o h e s i o n , are p r o b a b l y
the most s e r i o u s c o n s t r a i n t s , the like-minded also s u f f e r from
a l a c k of plan and p r o g r a m .
It i s , loosely defined, a t y p e of
consultation m a c h i n e r y , not an o r g a n i z a t i o n . S t e p s to create a
more o r g a n i z e d g r o u p would p r o b a b l y meet with s t r o n g o p position from o t h e r OECD c o u n t r i e s b e c a u s e it would be
c o n s i d e r e d as an inappropriate d i v i s i o n .
T h e lack of a
program could be e x p l a i n e d by the same r e a s o n i n g , b u t also
by the fact that the c o u n t r i e s b e l o n g i n g to the g r o u p are not
only competitors in international m a r k e t s ; they also h a v e
somewhat different domestic economic s y s t e m s .
T h e like-minded c o u n t r i e s did h a v e a program on the IPC
in Nairobi and a f t e r .
T h a t the final IPC vote in March 1979
did not meet the. e x p e c t a t i o n s set by the Nairobi resolution 93
is not proof that t h e like-minded are without influence when
p r o g r a m s a r e implemented.
It seems, h o w e v e r , that the g r o u p
lost some of the Nairobi spirit in the p r o c e s s of negotiating the
Common F u n d . Some v o i c e s , both in Norway and S w e d e n , a r e
q u e s t i o n i n g t h e wisdom of the g u i d i n g principle of the g r o u p to act as a moderator as often as the other p a r t i e s w i s h .
T h e s e people a s k whether the time h a s come for a g r o u p
s u c h as the like-minded c o u n t r i e s to play a more determined
role in the NIEO p r o c e s s .
As an example, N o r w a y ' s election
to important chairmanships in the negotiations may be more
c o n s t r a i n e d b e c a u s e of this role as moderator than some
foreign policy decision makers may d e s i r e .
Outside such
a role Norway would h a v e been more free to take political
initiatives on s u c h i s s u e s as the IPC question in Nairobi.
O t h e r s may question the wisdom of t r y i n g to pose as mediator
at all.
Realpolitik reasoning claims that big p o w e r s decide
w h e t h e r and how much the industrialized world shall concede
to d e v e l o p i n g c o u n t r i e s .
T h e r e is therefore no use in t r y i n g
to b r e a k out of the fold.
T h e r e are indications that this view is gaining g r o u n d .
T h e b i g g e s t Norwegian n e w s p a p e r , c o n s e r v a t i v e A f t e n p o s t e n ,
commented at the end of UNCTAD V that it would p r o b a b l y
mean the end of N o r w a y ' s mediation r o l e .
T h e reason a c c o r d i n g to the p a p e r , was to be found in the shipping policy
of the developing c o u n t r i e s that were opposed to Norwegian
interests.
( A f t e n p o s t e n , 5 J u n e 1979)
S w e d i s h capital had
l e s s reason to feel antagonized by the conference r e s u l t s since
p r a c t i c a l l y no concrete recommendation was made on i n t e r national r e s t r u c t u r i n g , so vital to its i n t e r e s t s .
In comments
by government spokesmen in both c o u n t r i e s , the conference
was c o n s i d e r e d a disappointing e v e n t , which did not leave
much hope for the continued n o r t h - s o u t h d i a l o g u e .
One may therefore e x p e c t more discussion and conflict in
S c a n d i n a v i a n societies both o v e r the content of the NIEO and
the s t r a t e g y to be adopted toward the demands of d e v e l o p i n g
countries.
T h e climate is becoming t o u g h e r .
T h e r e seems to
be l e s s room for the kind of "idealism" that some p a r t s of the
p o l i t y , s u p p o r t e d by some of the p u b l i c , h a v e b e e n a d v a n c i n g .
T h e evolution of Scandinavian NIEO policy d e p e n d s on the
n a t u r e and e x t e n t of p r e s s u r e , foreign as well as domestic,
and on the final outcome of the working of countervailing
f o r c e s on policy making at the l e v e l of government and
industry.
T h e Role of the Netherlands
As one of the founders of t h e like-minded g r o u p i n g and a
member of the E C , the Netherlands is in a potentially i n fluential position.
In p r a c t i c e , it has been in the forefront of
i n n o v a t i n g development aid policy in both q u a n t i t a t i v e and
qualitative t e r m s .
T h e Dutch government h a s also been
central in the negotiations that took place in the 7th Special
Session of the U . N . General Assembly in 1 9 7 5 .
T h e question now is how far and in which sense does the
Dutch political p r a c t i c e differ from that of the Scandinavian
c o u n t r i e s , and their "Peer G y n t s t r a t e g y . "
It is also a q u e s tion of whether the Dutch government can follow, not to
mention initiate, an e v e n t u a l like-minded program of implementing NIEO p r i n c i p l e s against the i n t e r e s t s of Dutch capital
and those of fellow EEC c o u n t r i e s .
T h e economy of the
N e t h e r l a n d s , p r o b a b l y e v e n more than that of Sweden is
d e p e n d e n t on the foreign production facilities and markets of
86
its T N C s .
And Dutch T N C s . notably S h e l l , Phillips, and
U n i l e v e r , a r e among the world l e a d e r s in their s e c t o r s .
Their
i n t e r e s t s are bound to h a v e an impact on state p o l i c i e s .
As it
i s , coordination within the EEC in matters related to d e veloping c o u n t r i e s is i n c r e a s i n g .
T h i s is a c k n o w l e d g e d in the
latest r e p o r t s on development policy in Denmark and Holland.
The Dutch g o v e r n m e n t report to Parliament (1979) s t a t e s :
It is inevitable that we shall i n c r e a s i n g l y place
our policies on cooperation with d e v e l o p i n g c o u n t r i e s
in a European (Community) c o n t e x t ; and i n d e e d , this
is a v e r y d e s i r a b l e t r e n d ,
( p . 17)
In the same r e p o r t , official Dutch a d h e r e n c e to the c o n s u l a tions of the like-minded g r o u p is affirmed.
The policy of the
like-minded h a s , a c c o r d i n g t o the g o v e r n m e n t ' s a s s e s s m e n t ,
"often p r o v e d to be v e r y close" to EEC p o l i c i e s .
Thus,
continued consultations among the like-minded "are in no way
detrimental to those t a k i n g place within the E E C . "
( p . 15)
If EEC policy in these matters i s , to a c o n s i d e r a b l e
e x t e n t , the r e s u l t of compromises between Bonn and P a r i s ,
then the potential for conflict between the EEC and the
like-minded,
n o n - E E C members cannot
be
underestimated.
T h e r e is a w i d e s p r e a d belief in S w e d i s h and Norwegian "NIEO
c i r c l e s " that the Dutch (and Danish) position on the IPC and
the Common Fund was noticeably w e a k e r than in Nairobi, when
the common EEC policy was e v o l v e d .
T r a d e policies are the r e s p o n s i b i l i t y of the Community.
The N e t h e r l a n d s , h o w e v e r , p r e s e r v e s a r e l a t i v e l y independent
position on development aid and was the first industrialized
c o u n t r y to i n t r o d u c e a special scheme for domestic r e s t r u c t u r ing in favor of d e v e l o p i n g c o u n t r i e s t h r o u g h public adjustment
assistance.
In these s e c t o r s t h e r e is room for a common
Scandinavian-Dutch policy.
On monetary and financial p r o b lems and on control o v e r T N C s , h o w e v e r , the Dutch position is
not d i f f e r e n t from that of other EEC c o u n t r i e s .
T h e emphasis
on r e g u l a t i o n , found among S w e d i s h and Norwegian Labor and
Social Democratic p a r t i e s h a s no parallel in the Dutch c a s e .
T h e r e , capital and c e n t e r - r i g h t i n t e r e s t s - a r e s t r o n g e r .
This
e x p l a i n s why the new Dutch g o v e r n m e n t , while s t r e s s i n g NIEO
p r i n c i p l e s , has put more emphasis on e x p o r t i n t e r e s t s , liberal
trade policies,
and interdependence
in
north-south relat i o n s . (50)
A c c o r d i n g to a document published by the Development
Cooperation Information Department of the Ministry of Foreign
A f f a i r s of the N e t h e r l a n d s G o v e r n m e n t , the Netherlands is
pursuing
a two-pronged
policy v i s - a - v i s the d e v e l o p i n g
countries.
Without wishing to infringe upon the s o v e r e i g n t y o f d e v e l o p i n g c o u n t r i e s o v e r their internal
a f f a i r s , the Government is c o n v i n c e d that the two
goals - a position of equality in international
economic relations and s p e e d y and direct relief for
the many h u n d r e d s of millions who are still e x i s t i n g
below the minimum level of s u b s i s t e n c e - can and
must be p u r s u e d simultaneously, and not c o n s e c u tively.
T h i s means that different s t r a t e g i e s must be
followed c o n c u r r e n t l y , calling for a t w o - p r o n g e d
policy d i r e c t e d t o w a r d s both m a c r o - s t r u c t u r e s and
the direct alleviation of p o v e r t y in the d e v e l o p i n g
countries.
T h e Government has chosen in favour of this "
t w o - p r o n g e d p o l i c y , for two r e a s o n s : f i r s t l y , b e c a u s e the p o v e r t y of the poorest population g r o u p s
is so g r i n d i n g that it would be inhumane to postpone
e f f o r t s to help them until after e x t e r n a l s t r u c t u r e s
h a v e been improved: s e c o n d l y , b e c a u s e measures
promoting a position of international equality for d e veloping c o u n t r i e s can in some c a s e s be implemented
in s u c h a way that they can at the same time
improve the position of the most v u l n e r a b l e sections
of the population.
For i n s t a n c e , development funds
could be used more often to finance measures
relating to primary commodity agreements when the
commodities c o n c e r n e d are of major importance for
t h e poorest d e v e l o p i n g c o u n t r i e s , which h a v e the
poorest populations.
S u c h a fusion of goals will not be possible in all
cases.
What will then be r e q u i r e d is to examine
s t r u c t u r a l measures on their own merits in conjunction with the wish of developing c o u n t r i e s to o c c u p y
a
position
of
greater
equality in international
economic r e l a t i o n s . (51)
While o r g a n i z e d labor is somewhat weaker in the Netherlands
than
in
Scandinavia,
various
p r i v a t e organizations
and
development action movements r e p r e s e n t Important p r e s s u r e
g r o u p s , which any Dutch government will h a v e to take into
account.
T h e y r e p r e s e n t a r e s e r v o i r of s u p p o r t for a
like-minded policy that could become a political force during
the 1980s if international and national conditions are f a v o r a b l e .
As t h i n g s stand at p r e s e n t , Dutch participation in a l i k e minded NIEO program a p p e a r s d e p e n d e n t on Scandinavian
governmental i n i t i a t i v e s , and s u p p o r t by an activist public
movement in the N e t h e r l a n d s .
88
S E L E C T I V E NORTH-SOUTH A P P R O A C H E S :
ROOM FOR A MINI-NIEO?
We assume that it is of importance to the continued NIEO
negotiations and the N o r t h - S o u t h dialogue that the S c a n dinavian c o u n t r i e s ,
p r e f e r a b l y with the s u p p o r t of o t h e r
like-minded c o u n t r i e s , maintain their pro-NIEO position.
We
also assume t h a t , not withstanding some c u r r e n t t r e n d s to the
c o n t r a r y , t h e r e is e n o u g h s u p p o r t for s u c h a policy in S c a n dinavia for a d i s c u s s i o n of alternative actions to be feasible.
New w a y s of b r e a k i n g the deadlock in the NIEO negotiations
must be d i s c u s s e d and s e r i o u s l y c o n s i d e r e d .
We now point to
some possible w a y s in which this could take p l a c e .
As noted a b o v e , it has been a k e y principle in the policy
of the S c a n d i n a v i a n and the like-minded countries to insist on
multi-lateral solutions in the implementation of the NIEO.
The
c a u c u s i n g that has taken p l a c e , e . g . , within Group B and
O E C D , has only o c c u r r e d at the l e v e l of d i s c u s s i o n s of p r i n c i p l e s and v o t i n g .
In some c i r c l e s , the idea of implementing
p a r t s of the NIEO p a c k a g e on a s e l e c t i v e basis has also been
discussed.(52)
A few h i g h - r a n k i n g Scandinavian politicians
h a v e informally participated in these d i s c u s s i o n s .
Through
new c h a n n e l s ,
s u c h as the International Foundation for
Development Action ( I F D A ) , and established o r g a n s s u c h as
the Dag Hammarskjold Foundation, t h e y h a v e met with official
and
semi-official
representatives
of d e v e l o p i n g c o u n t r i e s .
Building on these deliberations and on their own p r e liminary i d e a s , (53) three different schemes are p r o p o s e d , e a c h
of which could be implemented on a o n e - s e c t o r or a multisector basis:
1.
2.
3.
a s t r i c t l y bilateral arrangement between one Scandinavian
c o u n t r y and one or a few d e v e l o p i n g c o u n t r i e s ;
an arrangement between one Scandinavian c o u n t r y and all
d e v e l o p i n g c o u n t r i e s ; and
an arrangement that includes s e v e r a l Scandinavian a n d / o r
like-minded c o u n t r i e s and s e v e r a l or all d e v e l o p i n g c o u n tries.
T h e p u r p o s e of a l t e r n a t i v e 1 would be to p r e s e n t a model
or an initiative that might act as a t r i g g e r to other i n d u s trialized c o u n t r i e s .
T h e a l t e r n a t i v e p r e s e n t s a number of
political and other d i f f i c u l t i e s : It may smack of paternalism; it
may be u n a c c e p t a b l y s e l e c t i v e to o t h e r developing c o u n t r i e s ;
and it may b r e a k too much with internationally a c c e p t e d
nondiscrimination p r i n c i p l e s .
A l t e r n a t i v e 2 would be l e s s
subject to s u c h criticism, but only from the point of view of
developing countries.
To the e x t e n t that it contains c o n c e s s i o n a r y elements, which affect n e g a t i v e l y the international
position of i n d u s t r y in the g i v e n Scandinavian c o u n t r y ,
i n d u s t r y would no doubt oppose the scheme.
If it contains
elements that favor the c o u n t r y v i s - a - v i s o t h e r industrialized
c o u n t r i e s , the l a t t e r c o u n t r i e s would oppose it with r e f e r e n c e
to the n o n - d e s c r i p t i o n c l a u s e .
N e v e r t h e l e s s , both these a l t e r n a t i v e s h a v e p r e c e d e n t s in the field of development a i d , the Lome c o n v e n t i o n ,
the GSP s y s t e m , e t c .
One might, for i n s t a n c e , e x t e n d the
p r e s e n t ODA program to c o v e r fields o t h e r than technical and
financial a s s i s t a n c e .
To the e x t e n t that ODA is linked to
t r a d e , investment and o t h e r I s s u e s , this is de facto taking
place a l r e a d y . It seems quite possible to finance h i g h e r p r i c e s
for raw material imports by a p p r o p r i a t i n g for that p u r p o s e a
s h a r e of the funds that would otherwise- go to ODA.
The
difference between capital's e x p e c t a t i o n s for fair profitability
and competitiveness v i s - a - v i s foreign competitors, and a
d e v e l o p i n g c o u n t r y ' s e x p e c t a t i o n s c o n c e r n i n g p r i c e s and o t h e r
c o n c e s s i o n s , could b e c o v e r e d b y state i n t e r v e n t i o n s .
T h i s s u g g e s t i o n , which is not new to either capital or
g o v e r n m e n t , i n v i t e s a number of questions on criteria for what
s o r t of agreement is just for the developing c o u n t r y and
remunerative to the d e v e l o p e d one or its a g e n t .
Such questions would h a v e to be a n s w e r e d t h r o u g h n e g o t i a t i o n s .
Even
t e n t a t i v e a n s w e r s would be b e y o n d the scope of this s t u d y ,
b u t we wish to insist that they can be s o l v e d if the n e c e s s a r y
political will is t h e r e .
T h e third a l t e r n a t i v e is the p r e f e r r e d one of the t h r e e .
It comes closer than the o t h e r s to meeting the principle of
universalism.
It builds on the premise, questionable as it may
b e , that a g r o u p i n g s u c h as that of the like-minded c o u n t r i e s
p o s s e s s e s g r e a t e r political will to move to the s t a g e of implementation than do o t h e r industrialized c o u n t r i e s .
A l s o , it
somewhat r e d u c e s the fear of capital and labor that the
p a r t i c u l a r c o u n t r y from which they operate will h a v e to
s h o u l d e r new b u r d e n s that put them at a d i s a d v a n t a g e .
And,
for d e v e l o p i n g c o u n t r i e s it is the most i n t e r e s t i n g a l t e r n a t i v e ,
since i t i n v o l v e s s e v e r a l developed c o u n t r i e s a s p a r t n e r s .
T h e NIEO platform has a firm b a c k i n g , both formally and
l e g a l l y . T h e Lome convention is also a p r e c e d e n t for .a scheme
of this k i n d .
T h u s , the b a r r i e r s to a mini-NIEO along the
lines s u g g e s t e d in alternative three should by no means be
insurmountable.
T h e s e b a r r i e r s a r e mostly of a political
n a t u r e - which are surmountable in p r i n c i p l e .
T h e practical implications of the scheme, as well as its
c o n c r e t e c o n t e n t , would be a matter for negotiation.
An
important means to b r e a k the p r e s e n t d e a d - l o c k o v e r the NIEO
would be for the Scandinavian c o u n t r i e s to initiate d i s c u s s i o n s
of s u c h a s c h e m e .
It it were to be s e l e c t i v e in the s e n s e
that only a few of the d e v e l o p i n g c o u n t r i e s were to take p a r t ,
it might be politically difficult to make the s e l e c t i o n .
The
90
WESTERN EUROPE AND THE NIEO
c o u n t r i e s with which the S c a n d i n a v i a n g o v e r n m e n t s mostly deal
t h r o u g h their ODA p r o g r a m s would be a natural first c h o i c e .
Many of them meet the two p r i n c i p l e s of selection which both
Norway and S w e d e n employ - that the r e c i p i e n t is among the
least d e v e l o p e d or p o o r e s t c o u n t r i e s , and that t h e r e is a
political will to c a r r y out socially r e s p o n s i b l e domestic d e velopment policy.. G i v e n the limited size and r e s o u r c e s of the
S c a n d i n a v i a n c o u n t r i e s , and o f t h e s i x o r s e v e n c o r e , l i k e minded c o u n t r i e s , a s e l e c t i v e a p p r o a c h seems w a r r a n t e d .
It
would not mean a d e c i s i v e s t e p forward in p r a c t i c a l , c o n c r e t e
r e s u l t s in the s h o r t term.
It may, h o w e v e r , set the pace in
making it politically difficult for o t h e r OECD c o u n t r i e s not to
follow s u i t . As it was said in the b e g i n n i n g of 1979,
T h e c h a l l e n g e in front of us now is to translate
this u n d e r s t a n d i n g (of the mutual d e p e n d e n c e of
d e v e l o p e d and d e v e l o p i n g countries) into a framework of mutual commitments and o b l i g a t i o n s . (54)
S w e d e n and Norway may t a k e the initiative to d i s c u s s , and
later implement, a s e l e c t i v e scheme with four or five o t h e r
industrialized countries the N e t h e r l a n d s ,
Denmark and
Belgium from the EEC and Finland and p o s s i b l y A u s t r i a from
the o u t s i d e .
No final list of the d e v e l o p i n g c o u n t r i e s which
would be i n v i t e d to join can be made at this point.
But
c o n s i d e r i n g the c r i t e r i a set out a b o v e , c o u n t r i e s s u c h as
T a n z a n i a , A l g e r i a , S r i L a n k a , Jamaica, and Nicaragua could be
among the c o u n t r i e s i n v i t e d .
Domestic r e s t r u c t u r i n g and ODA could be chosen as a
point of d e p a r t u r e .
T h e s e are a r e a s where some initiatives
h a v e already been t a k e n , w h e r e o t h e r g r o u p i n g s ( s u c h a s the
EEC) do not y e t pose a s e r i o u s o b s t a c l e to action, and where
some minimum unity of policy h a s in fact been a c h i e v e d .
C l e a r l y , the Belgian adjustment policy is not the same as that
contemplated by N o r w a y ; on the o t h e r h a n d , is is not far from
the D u t c h . (55)
On the b a s i s of past e x p e r i e n c e in t h e s e
a r e a s , some scheme for the coordination of industrialization
policy and for policy on science and technology for d e v e l opment could be w o r k e d out in parallel legislation.
Assuming that this could be done among the s i x or s e v e n
i n d u s t r i a l i z e d c o u n t r i e s in the first place and then modified by
the invited d e v e l o p i n g c o u n t r i e s , a scheme could be worked
out for a p p l y i n g the a g r e e d p r i n c i p l e s , along lines set down in
the multilateral NIEO n e g o t i a t i o n s . T h i s could take the form of
a c o m p r e h e n s i v e development cooperation p r o g r a m .
Such a
program could be implemented on a multi- or on a bilateral
b a s i s , the former implying that s e v e r a l ( o r all) countries on
both s i d e s a p p l y it j o i n t l y ; the latter implying that it is
applied in c o u n t r y - t o - c o u n t r y projects w h e r e only two c o u n tries take p a r t .
Nordic g o v e r n m e n t s already c a r r y out joint
91
p r o j e c t s of technical, and financial a s s i s t a n c e in d e v e l o p i n g
countries.
Hence the former alternative is not u n t h i n k a b l e ,
a l t h o u g h the latter would normally be p r e f e r r e d .
In s u c h a program not only new development c o n c e p t s and
t h i n k i n g , but e v e n new channels and w a y s of cooperation can
be e x p l o r e d . One example is the field of t e c h n o l o g y . Existing
R I D as well as p r o d u c t i v e facilities should be e x p l o r e d with
a view to tap their potential for development a s s i s t a n c e . T h e
idea is to e n t e r into work that s e c u r e s employment in the
i n d u s t r i a l i z e d c o u n t r i e s while at the same time - and t h i s is
the primary goal - it c r e a t e s new c r e a t i v e and p r o d u c t i v e
c a p a c i t i e s in d e v e l o p i n g c o u n t r i e s .
By p l a y i n g deliberately on
small and medium-size firms which are not internationalized but
which h a v e a hitherto u n s u p p o s e d potential for development
a s s i s t a n c e , s u c h a program could also help to r e d u c e the
dominant position of T N C s in the n o r t h - s o u t h s y s t e m .
R e g a r d i n g o t h e r NIEO i s s u e s , coordination seems to be
more difficult.
Market a c c e s s and natural r e s o u r c e s are a
community r e s p o n s i b i l i t y in the case of the EEC c o u n t r i e s .
A n d while it may be possible to a g r e e on t r y i n g out small and
medium-sized firms in t r a n s f e r of r e s o u r c e s s c h e m e s , it will be
difficult to g e t the Netherlands and Sweden to significantly
r e d u c e the position of their big T N C s , not to s p e a k of r e g ulating them.
T h e corporations are bound to h a v e a dominant
role in n o r t h - s o u t h relations for some time to come.
The
q u e s t i o n is w h e t h e r the like-minded countries may also be able
to initiate new forms of T N C p r e s e n c e in the T h i r d World, that
g e t the b e s t from their performance, control their profit and
market s t r a t e g i e s to balance them with the n e e d s of T h i r d
World people for the satisfaction of basic n e e d s , s e l f - r e l i a n c e ,
and t h u s d e v e l o p m e n t .
In this connection d i r e c t investments by like-minded
c o u n t r y T N C s could be r e o r g a n i z e d into "fade out" joint e n t e r p r i s e s , an idea that has been taken up in the Andean P a c t .
A l s o , like-minded c o u n t r y T N C s should be a s k e d to enter into
social c o n t r a c t s with w o r k e r s in developing c o u n t r i e s on the
lines s u g g e s t e d inter alia by S w e d i s h l a b o r .
T h i s might take
t h e form of the like-minded governments a g r e e i n g on a "code
of c o n d u c t " for the operations of their p r i v a t e s e c t o r s in the
T h i r d World. . Without economic i n c e n t i v e s , s u c h a code could
h a r d l y become more binding than the one i n t r o d u c e d by O E C D .
B u t the possibility, of it could and should be e x p l o r e d .
B e s i d e s s e c u r e j o b s , labor in the d e v e l o p e d world wants
s e c u r e s u p p l i e s of r e s o u r c e s and input to production - a
c o n c e r n t h e y s h a r e with capital - and consumers want s e c u r e
s u p p l i e s of basic consumer g o o d s .
One possible way of
implementing the intentions of the I n t e g r a t e d Program of
Commodities, as it was s e t out before and d u r i n g U N C T A D I V ,
is to e n t e r into l o n g - t e r m s u p p l y and price agreements for raw
materials and food commodities.
By t y i n g s u c h agreements
e x p l i c i t l y to t h e S e c o n d Window fo t h e I P C and p r o v i d i n g
financial
and
technical
a s s i s t a n c e for d i v e r s i f i c a t i o n and
industrialization projects in d e v e l o p i n g c o u n t r i e s , t h e y would
g e t a c l e a r e r orientation toward the achievement of development
goals within the framework of the N I E O .
It is important to s t r e s s that the total impact of s u c h a
program should be beneficial first of all to d e v e l o p i n g c o u n t r i e s , b u t s e c o n d that it would not h a v e a s t r o n g l y n e g a t i v e
impact
on
the
participating industrialized countries.
In
economic t e r m s , s u c h a program would most p r o b a b l y not mean
as much to the economic viability of the Northern Economies as
the p r o c e s s of automation, and adjustment d u e to i n t e r - O E C D
competition.
T h e i s s u e , in final a n a l y s i s , is a matter of politics and
information.
So f a r , the political will to implement the NIEO is
not s t r o n g e n o u g h .
And the information about its e f f e c t s n e g a t i v e as well as p o s i t i v e - is not p e n e t r a t i n g the community
of w o r k e r s and c o n s u m e r s .
T h e social and political p r o c e s s e s
at work in the a d v a n c e d d e v e l o p e d societies must take new
d i r e c t i o n s before the political will is c r e a t e d and the i n f o r mation is p r e s e n t e d and a c c e p t e d .
T h e fate of the NIEO may
e v e n t u a l l y d e p e n d on w h e t h e r or not this v i c i o u s c i r c l e can be
broken.
ACKNOWLEDGMENTS
T h e author would like to thank the Nordic Cooperation Committee for International Relations, i n c l u d i n g Conflict and Peace
R e s e a r c h , for e x t e n d i n g financial s u p p o r t for the r e s e a r c h and
w r i t i n g of this s t u d y .
It is a r e v i s e d v e r s i o n of a draft
completed in May 1 9 7 9 . K jartan S t i g e n a c t e d as my r e s e a r c h
a s s i s t a n t ; he is r e s p o n s i b l e for the tables and f i g u r e s and
d r a f t e d p a r t s of the first s e c t i o n .
His a s s i s t a n c e has b e e n of
g r e a t h e l p . I am also indebted to Staff an L a e s t a d i u s of the
Office of F u t u r e S t u d i e s in Stockholm for a d v i c e on t h e
a n a l y s i s of S w e d e n ' s position, a n d to Hans-Henrik Holm,
S v e r r e J e r v e l l and Martin Saeter for comments on the draft
paper.
L a s t b u t not l e a s t , I should like to e x t e n d my t h a n k s
to those r e p r e s e n t a t i v e s of the public administration, the
b u s i n e s s community, l a b o r , and v a r i o u s p r i v a t e organizations
in S w e d e n , Norway as well as in Iceland who h a v e g r a n t e d
i n t e r v i e w s and p r o v i d e d important documentary information
upon r e q u e s t .
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WESTERN EUROPE AND THE NIEO