Monitoring The UN

Monitoring The UN > The UN and Sustainable Development

UNDP, Globalization and Trade

Background

UNDP`s primary mission is the alleviation of poverty. Defined as sustainable human development, poverty eradication goes beyond basic access to income, food and shelter. Sustainable human development is about acknowledging and enabling individuals to avail their economic, social, political, civil, and cultural rights. Defined differently, poverty is the incapacity of an individual to choose to live a healthy lifestyle, to acquire knowledge, and to participate in and benefit from the economic and social process. Such freedom of choice underlies the development of respect towards the self and others, creative expression, and a sense of dignity – basic elements underlying the full potential of human development. As mentioned in the Human Development Report 2000, “human rights are not, as has sometimes been argued, a reward of development. Rather, they are critical to achieving it.”

Addressing the embedded goals of poverty alleviation, sustainable human development, and human rights requires the generation of economic growth. While globalization has led to the generation of economic growth, evidence is mounting that a few already economically strong countries and excessively wealthy individuals are the only ones having reaped the benefits of globalization. The present model of globalization has further marginalized the poorest in developing and least-developed countries (LDC) as well as those within developed countries.

Acknowledging the negative impacts of globalization and, at the same time, its power to reverse the cycle of poverty, UNDP is aiming to “shape” the globalization process with social objectives, values of equity, and participation becoming the new bottom line. The organization has taken the lead role within the UN System to reach the target of reducing extreme world poverty by half by the year 2015. This ambitious target, reached at the Special Session of the United Nations General Assembly on Social Development (World Social Summit on Development +5 – WSSD) in June 2000, requires the access and active participation by developing countries in the global market.

Understanding Globalization

Defined as an economic process, globalization is the movement of capital and goods within and between countries. More largely defined, globalization is also the increased interdependence between people around the world and the creation of a new global governance structure. Globalization is a process that touches all spheres of society bringing about transformative changes in the economy, cultures, technology, and governance.

Globalization is not new. The breakdown of barriers between countries and the exchange of goods through trade is a process that has been ongoing since the beginning of troc.

However, it has progressed with considerable speed in the last quarter of a century. In addition, the context within which globalization presently operates is different. The speed of change is unprecedented and new technologies are themselves exacerbating the speed of change. This has brought such unplanned and unpredicted transformation in society that we have begun to believe that the “man made beast” of the globalization process is beyond our capacity to manage it for own species’ benefit.

Facts About the New Global Context

The Legitimacy Crisis of Globalization
The promises of economic growth convinced world leaders to believe in the capacity of globalization to solve other major growing problems such as the increasing level of poverty and the rapid degradation of the environment. This assurance of the creation of wealth took over the world’s agenda. However, in 1999, the protest in Seattle marked a turning point in the globalization trend. In addition to civil society groups (labour, human rights, environment, farmers, food safety, health, social justice, cultural, indigenous peoples, international development, etc.), people within governments and even industry are now questioning the capacity of the present model of globalization to address the concerns of humanity.

The highly organized protest in Seattle over the structure and substantive work of the World Trade Organization (WTO) worked in favour of UNDP’s desire to expand the debate on trade. Indeed, Seattle has forced inclusion in the discussions on trade and finances, considerations for social justice, equity, inclusion, sustainability, and other people-centered values. The “Battle in Seattle” brought to the world’s attention that alternatives to the present model of globalization are possible and available. The UNDP, with its sustainable human development approach, aims to represent such an alternative view of globalization, one that meets the needs of the poor and embraces a new set of underlying values such as those voiced in Seattle.

Information and Communications Technologies (ICTs) are a major force behind globalization. They have already generated multiple advances in the fields of health and education. In addition, typically isolated small businesses have now acquired access to markets. Civil Society groups have also improved their capacity to network, share information and plan joint actions. ICTs are a driving force of development in all fields. They are considered key to the economic development that is required to address the ills of developing countries. In India alone, software exports are expected to increase from $4 billion (2000 figure) to $100 billion in a five year period.

Beyond the expanded trade of commodities and technology, other financial and investment mechanisms are increasing the capital in developed and developing countries for economic development. Foreign Direct Investment (FDI) is, according to the United Nations Economic and Social Council (ECOSOC), one of the greatest sources of private capital on the global market reaching developing countries. FDI can generate and expand businesses, generate employment, etc. FDI is, however, complex and much work is presently underway to study its influence and potential role for development and poverty alleviation.

One of the key benefits of globalization is an increase in the capacity to choose. This is true at multiple levels. The breakdown of barriers to trade has allowed the global market to provide individuals, communities, and nations with access to an increased diversity of consumer goods, entertainment options, and information sources. These provide individuals with more power to choose and an increased capacity to understand these choices. The additional choices and their resulting benefits to individuals lead to an increased capacity for innovation and human advancement, themselves necessary for the growth of the economy. In Estonia for example, the establishment of a digital arts and science college will provide youth with the option to choose to stay in their community and country while acquiring the skills and the education they could only previously gain abroad. This project, entitled the Tiger Leap programme, will contribute to building a stronger community in Estonia.

Globalization is also enabling more interaction and a growing interdependence among nations and cultures. This can lead to the development of shared values, an appreciation of the diversity of world views, and the development, amidst the diversity, of a global commitment to equitable human development. The power of the Internet to Unify was demonstrated when the networking efforts of NGOs worldwide prevented the adoption of the Multilateral Agreement on Investments (MAI) by OECD countries.

Since globalization has been driven by a purely economic bottom line, its impacts on other sectors of society have been significant. It this section, a brief survey of the impacts of globalization on human rights, equity, human security, sustainability, development, governance and democracy is presented.

Globalization, according to the UNDP, has a much greater ability to contribute to growth than overseas development assistance, or aid money. While aid continues to be important, facilitating the participation of the developing world in the global economy has the capacity to alleviate the cycle of dependency on foreign aid. If globalization can be “shaped” than what is needed now are measures that will enable “right” trade and private investment policies for the development of globalization with a human face.

UNDP’s sustainable human development (SHD) approach introduces a whole new set of values as the foundation for global economic development activities. Contrary to the dominant model that aims mainly towards the growth in GDP, UNDP proposes that the ultimate goal of globalization be the improvement of peoples’ lives. The SHD approach also differs from the dominant model because it supports participation and equal partnership of developing countries as opposed to top-down and donor driven approaches.

UNDP has identified a strategy that will work towards expanding the benefits of international trade to meet the needs of the poor and factor in social and environmental objectives. The strategy, presented by the Administrator in a speech to the Ministers of Trade of Least Developed Countries in February 2000, is composed of six key steps.

1. The Development Step: This first step is an acknowledgment of the continued need for development assistance aid money for the development of the human and infrastructure capacity that developing countries need to participate in the global economy.

2. The Knowledge Step: One of the main forces of globalization has been identified as the impact of information and communication technologies (ICTs) on all sectors of society. Our economy is a knowledge based economy. The UNDP believes that ICTs offer a revolutionary opportunity to provide developing countries access to the global economy. ICTs can provide citizens of the developing world with the information needed to participate in the economy while providing access to ongoing opportunities to acquire more knowledge and bridge the knowledge divide that is now exacerbating the cycle of poverty. Click here to learn more about UNDP’s vision for and work in Information and Communication Technologies.

3. The Freedom Step: To provide developing countries the capacity to participate in the world economy, laws and institutions within a country must be transparent and honest and protect the freedom of its constituents. Such freedom and rights are fundamental for citizens to be active, informed and creative participants in the world economy. In a knowledge-based economy, access to information is central.

4. The Engagement Step: The UNDP believes in the importance of promoting and enabling an open debate about trade and globalization at the national level and also within civil society and other institutions. Encouraging national debates will enable each country to make informed trade-offs between, for example, culture and global integration. The rationale is that such national debates will permit the development of a social consensus that will allow selected policy priorities to be sustainable.

5. The Fair Trade Step: The participation of developing countries and particularly Least Developed Countries (LDCs) in global trade is impeded by numerous factors including their restricted human, institutional, and policy capacity. Another main impediment, which is linked with their capacity limitations, is their lack of participation in trade negotiations and disputes procedures. Very few LCD countries are members of the WTO compared with OECD countries. Legitimizing the WTO through fair representation is important.

6. The Global Legitimacy Step: The speed and transformative power of globalization has taken the world by surprise. Today, because of its many negative impacts, globalization is under a legitimacy crisis. The UNDP believes that globalization must be managed and that the principles that will drive the management of global trade must reflect a global consensus. There must be a shared understanding and support for an approach to globalization that takes into consideration social objectives, environmental protection, human rights, etc.

The Human Development Report 1999 identifies seven key challenges that require national and international intervention. These are to:

1. Strengthen policies and actions for human development, and adapt them to the new realities of the global economy

2. Reduce threats of financial volatility – of the boom and bust economy – and all its human costs

4. Enhance public action to develop technologies for human development and the eradication of poverty

6. Remedy the imbalances in the structures of global governance with new efforts to create a more inclusive system

7. Build a more coherent and democratic architecture for global governance in the 21st century

In partnership with UNCTAD, UNDP has developed the Globalization, Liberalization and Sustainable Human Development Programme. In order to increase the participation of LDCs in this initiative, the two organizations will join efforts to facilitate LDCs to develop and present their national globalization programmes and partnership initiatives at the Third United Nations Conference on LDCs.

Again with UNCTAD, UNDP is coordinating the Integrated Framework for Technical Assistance to Trade and LCDs. The objective of this initiative is to increase the capacity of developing countries to participate in trade negotiations and dispute procedures. This initiative will involve some form of collaboration with the WTO, and the World Bank.

UNDP is presently seeking partners to undertake a study on trade and development. The objective behind this study is to leverage the necessary support around the principles of trade that takes into account social objectives, environmental considerations, human rights, the empowerment of women, etc.

UNDP has been actively supporting the publication of National Human Development Reports. Support for these National Reports will be expanded since they are seen as important tools for policy development and capacity building at the national level.