GLOBALIZATION AND EQUITY
A VIEW FROM NORWAY
Valter Angell
Norwegian Institute of International
Affairs - NUPI
Three strands of reflections
1. The history of globalization
Key features
2. Norway and globalization
Anything to learn?
3. The future of globalization
Towards a new order?
My basic premise
• The need for a holistic approach and to
understand the political economy
– IDEOLOGY/POLITICS
– THEORY
– POWER
The basic model of the 40-ties
• A system designed by economists
– In powerful nations
• Formed by historical experiences
– Stability
– Multilateralism
Globalization started
focus on trade
• Liberalization is good
– For a nation, because the gains for the consumers
are larger than the losses for the producers
– From Adam Smith to Bhagwati
– By compensations, everybody is better off,
• Assumptions
Marginal costs of money is equal
Perfect competition
Entry, knowledge
Later-Symmetric information
• And, if the transfer is done!
Key historical points
• ITO failed –
– Havanna Charter not ratified
• 1947 27 nations negotiate in Geneva
– The General Agreement on Tariffs and Trade
– GATT
– MFN clause
• I–I–I
– Tariffs reduced
– A powerless organization takes form
1950 - 60
• Commodities left out
– The Haberler report
•
•
•
•
New countries joins
A Part IV of GATT is added /1964
The first UNCTAD is taking place
But, no real concessions to south
The turbulent 70-ties
• Limits to growth
• The commodity crisis
– OPEC OIL
• The new international economic order
– NIEO
– Fair and equitable prices
• Resolution 93 IV UNCTAD IV
– The Common Fund for Commodities - CFC
NIEO/ a break with the past
• New political institutions
– 10 commodities - stable and equitable prices
– Global buffer stocks
– Intervention in the market
• With support from the north / for a while
• OPECs power declined,
• CFC 1980 / A weak resolution
– Result – a small office in Amsterdam
– Project support / no intervention in the marked
GATT/WTO 1980/90
• The Uruguay-round
– The voice from the south is heard
– Tarification of trade obstacles
– Further reduction of industrial tariffs
• GATT=WTO (pluss..)
Present
• The Doha round – the development round
• Agriculture is the key
– Marked access in the north(300> Mia. USD)
Elimination of export subsidies
– The right to protection of developing
economies (Good? Jagdish?)
• Collapse
– And after Bush?
• The end of a system controlled by north?
Where we are now?
• Most countries members of WTO
• DC understands the benefits of
international trade
– Still their tariffs high
• North has lost its grip
– Protection in the North
– Agricultural subsidies 350 bill. USD
• Museveni –Trade, no aid
80
70
Bound tariff average
60
50
40
y = -0.0009x + 34.69
R2 = 0.1051
30
20
10
0
0
10000
20000
30000
Income per capita (2001, USD)
Melchior 2005
40000
India: Openness vs. GDP per capita, 1975-2002
16
15
14
Imports, % of GDP
13
12
11
10
9
8
7
6
1000
1200
1400
1600
1800
2000
GDP per capita (PPP, constant $)
Melchior 2006
2200
2400
Melchior 2006
Norway and globalization
Two faces
• Norway, from bottom to top, in 200 years
– UNDP criteria questionable
• Natural resources, capital and labor
important
– and the economic system (Sweden,
Denmark, Finland)
• Growth and equity
Key elements
• Ownership to land
• Democratic institutions working
• The interdependence between capital,
government and labor accepted
– Negotiated settlements
• Education to all
A smooth transformation?
• The international dimension always a
factor
– When land become scarce, migration
– When capital shortage, foreign investment
– When food shortage occurred, imports
• Now,
– surplus capital - oil revenues invested abroad
– Lack of labor, imports
The Nordic Model
• We are all social democrats
• The welfare state
– Understanding the system
– The interdependence between key actors
– Role of the public sector
– Stability / no strikes
– Good governance
• Deficiencies? Yes!
The Nordic Model
GOVERNMENT
CAPITAL
LABOR
Norway and the south
• Words and deeds
– Declarations and realities
– ODA, almost 1 pst. of GNP
– Trade……
• In international organizations
– THE BIG WORDS /
• GENDER, ENVIRONMENT, GOOD
GOVERNANCE, PEACE ETC.
In trade
• GATT / enabling clause
• Having GSP
– Watch the clauses / in Norwegian
• The farmers rule……….
– 30.000, <2% of GDP
• No trade
– Multifunctionality
– Read / disfunctionality
The future of globalization
Towards a new order?
• GATT 1947 27 countries
• Today 150
• WTO’s 2006 report highlights developing
countries’ growing role in world trade
– Today the real dynamism in trade is to be
found in the developing world, where Brazil,
China, India, Malaysia, Mexico and Thailand
all posted double digit growth in exports.
WTR Dec. 2006 Lamy
• Concerning the role of developing
countries, Lamy mentions the formation of
powerful negotiating groups like the G-90,
the G-33 and the G-20 that illustrate that
this is an organization in which all
Members can not only state their case, but
can achieve meaningful objectives on their
path towards development.
The future
• What will happen in Asia?
• Standing together
– In G-20
– In G-90
• Going alone?
– Multilateralism and or regionalism
• Breaking history?
– Being big and good?
• Taking care of all?