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| NAM more relevant than ever before | | |
Nagesh Kumar & Ramgopal Agarwala
In a unipolar world, checks and balances can only be provided by a large grouping of countries like the Non-Aligned Movement. It can also help developing countries pursue an independent development strategy.
AT A recent luncheon organised in New Delhi by Aspen Institute, India, Madeline Albright, former United States Secretary of State, remarked that she used to ask mockingly the Indian Ambassador to the United Nations, "Now that the cold war is over what are you non-aligned from?" This is typical of the perception that the Non-Aligned Movement (NAM) was a product of the cold war era and is no longer relevant today. Actually, the opposite may be nearer the mark: after the end of the cold war, NAM is politically more relevant and economically more viable than ever before.
Even a casual reading of the statements from NAM leaders shows that the movement was basically about charting an independent path. NAM countries did not want to be taken for granted by either of the blocs, both of which were trying to spread their political and economic systems. The key word here is "aligned" which implies unquestioning adherence irrespective of the merit of the bloc on any particular issue. NAM rejected that blind adherence. Non-alignment does not exclude cooperation or engagement. In fact most of the NAM countries were cooperating with both blocs to varying degrees throughout the cold war period. NAM was certainly not about confrontation with either bloc.
The emergence of a unipolar world in the post-cold war era has made the NAM philosophy more relevant than ever before because now there are no checks and balances that were provided earlier by the competing powers. Monopoly power has a tendency to corrupt the powerful and checks are needed to restore the balance. In the current unipolar world no individual country can provide that check. Only a large group of countries such as NAM can do that.
In addition to being politically relevant, NAM is also economically more viable than ever before. During the cold war era, NAM countries were dependent on the two blocs for economic aid. This dependence often compromised the political independence of the NAM countries. Now NAM countries are financially much stronger. In fact, the much-cherished goal of self-reliance of the South is within reach now and it is high time that NAM focusses on an agenda for economic cooperation in the South.
In 1961, when NAM was launched, the South was on the periphery of the North, mostly weak and powerless in the world arena. Now the South has emerged as an important player on the world economic stage. In terms of GDP, saving, investment, exports, imports, foreign exchange reserves, financial assets at home and abroad, quality and size of its corporate world, IT sector, and capability in manufacturing, the South has rapidly emerged although there are variations across countries. It appears to be catching up with the North. However this will be possible only if the South can work together as a bloc in the vital areas such as trade, finance, investment, energy, technology, and designing of development strategy. In a recent Policy Brief, RIS has elaborated a set of proposals for seizing the new opportunities for South-South cooperation, as highlighted below.
South-South trade as an engine of growth. The emergence of the South with supply capabilities in a wide range of goods and services as well as a growing centre of final demand has made intra-South trade a viable trade strategy. It already accounts for 43 per cent of the South's global trade. What is needed now is to make a new vigorous push to it especially in the context of the collapse of Doha Round negotiations. The starting point for such a push could be the Global System of Trade Preferences (GSTP), which was conceived in the 1980s. Progress on GSTP so far has been slow because of the positive list type approach adopted. The time has come to give a new thrust to deepen and broaden its scope and coverage to more products following a negative list approach, deeper concessions, and more widespread participation of members. It can also link regional groups of developing countries and could be accompanied by greater activism for trade facilitation and export financing.
South-South FDI and technology transfers for enhancing supply capacities. The emergence of developing country enterprises as outward investors is an important development of the past decade as it widens their options. Emerging multinational entreprises generally provide to their lesser developed hosts access to intermediate and generally more appropriate and cheaper technologies and skills. For promoting such Foreign Direct Investment, developing countries could evolve a South Investment Treaty providing post-establishment national treatment, investment protection and dispute settlement, and avoidance of double taxation. The G-77 Chamber of Commerce and Industry and the NAM Business Forum should play an effective role by organising South trade fairs and interaction meetings regularly besides web-based information portals on opportunities.
South bank
The South now holds more than $2 trillion as foreign exchange reserves, on which it is earning a very low rate of return. The old idea of a South Bank — a financial institution of the South, by the South, and for the South — now looks much more plausible. If only half of the current foreign exchange reserves of the South ($1 trillion) are deposited in this Bank and a Southern SDR worth $2 trillion is created over a five-year period, the seigniorage earned by the South could easily amount to about $40 billion year i.e. equal to the ODA. The South Bank can also play a crucial role in financing infrastructure investment, balance of payment support, and intellectual co-operation among the developing countries.
Building capabilities for harnessing fruits of modern technologies. Cooperation in human resource development, pooling their resources and capabilities for joint R&D on common problems, and exchange of experiences could be instrumental in harnessing the fruits of new core technologies such as ICT and biotechnologies. A number of examples are now available of pro-poor use of ICTs by rural communities facilitated by community-owned computers with visual or graphic interface, use of public fixed line and mobile telephone bureaus as sources of rural employment as well as for increasing the virtual teledensity, use of mobile phones by fisherfolks, use of internet for e-governance such as computerization of land records, among many other applications.
South-South cooperation for energy security. The South is the major producer of energy and with its rapidly growing economies, soon it is likely to become the major consumer of energy. Yet the South depends critically on intermediation by the Northern multinational enterprises for managing supply as well as marketing of the energy products. As a result, the South often ends up paying a premium price on the supply it receives and faces the risk of supply shortfall in case of disruption in energy supply. There is an urgent need for enhancing South-South cooperation, which can overcome the resistance of Northern multinational enterprises and provide a level playing field to the newly emerging companies of the South by giving them market-oriented opportunities in obtaining prospecting, development, transportation and marketing rights and thus enhance energy security of the South.
Increasing South's bargaining power in multilateral trade negotiations. The process of decision-making in the multilateral trade negotiations has been highly asymmetric. Although the decision-making should be by consensus, conventionally the leading trading nations such as the U.S. and European Union exercise a disproportionate weight in agenda setting and decision making process. To level the playing field in the negotiations, coalitions of developing countries should begin to set agenda of the trade talks by bringing issues of their concern on the negotiating table and contribute to evolving a system that is more responsive to the development needs. There is also a need for setting up a watchdog by NAM jointly with G-77 to scrutinise the implementation of WTO commitments by developed countries and, where appropriate, to bring them to the WTO's dispute settlement mechanism on behalf of developing countries. They could also seek a reform of the decision-making process in the multilateral trade negotiations.
Exchanging development experiences. Different developing countries have accumulated a large body of experiences in fostering equitable development and pro-poor growth and moderating adverse effects of the process of globalisation over the past decades. A NAM network of think-tanks on international economic issues could facilitate exchange of such development experiences and become a source of ideas for consideration of the policy-making bodies of the Movement on a regular basis.
To conclude, NAM appears to be far more relevant today for both political and economic reasons for enabling developing countries to pursue an independent development strategy. The South has emerged as a more confident participant in the international division of labour in the 21st Century. It has accumulated resources, experiences and capacity to shape its destiny more decisively than in the past. South-South Cooperation (SSC) can help in exploiting their synergies for mutual benefit and assist the South in meeting the many challenges it is facing. As a global forum of the South, NAM has a major role in fostering the SSC. Hopefully the Havana Summit will be able to give a much needed push to the biggest coalition of developing countries to move on to the collective development agenda.
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