Transcript Social Rights and Globalization

Globalization, Debt, and
Transnational Corporations:
the Unfinished Health and
Human Rights Agenda
Timothy H. Holtz, MD, MPH
Montefiore Medical Center
July 14, 2005
Outline
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Economic, social, and cultural rights
Globalization and its discontents
Overview of myths of growth
Background on debt, structural
adjustment, trade, and aid
 Impact of transnational corporations
(non-state actors) on health
What are economic rights?
 Right to a standard of living
 Right to work, just and favorable conditions of
work, protection against unemployment, fair
wages
 Right to social security
 Right to own property
 Freedom of peaceful assembly
What are social rights?
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Right to marry and form a family
Freedom of religion/expression
Right to rest and leisure
Right to education
What are cultural rights?
 Everyone has the right to freely participate in
the cultural life of the community, to enjoy the
arts, and to share in scientific advancement
and its benefits. (Article 27, UDHR)
 Everyone is entitled to a social and
international order in which the rights and
freedoms set forth in the Declaration can be
fully realized. (Article 28, UDHR)
Do we really live in a “global
village”?
*Marshall McLuhan
How does one define the concept of
“globalization” that we hear about every
day?
What does it mean that we live in a
“global economy.”
Does anyone know what this really
means?
Free markets make free men.
Milton Friedman
University of Chicago
Nobel Laureate, Neoliberal Economics
Globalization
“Globalization is the growing interdependence of
the world’s people through shrinking space,
shrinking time, and disappearing borders.”
Markets, the HDR states, have been allowed to
dominate the process, and the benefits and
opportunities have not been shared equally.
The result is that “global inequalities in income
and living standards have reached grotesque
proportions.”
1999 Human Development Report,
UN Development Program
Rats and roaches live by
competition under the laws of
supply and demand; it is the
privilege of human beings to live
under the laws of justice and mercy.
Wendell Berry
Development
 Is growth necessary for a just and fair
globalization?
 Is economic growth necessary for social
development?
 Is growth in GDP our only measure of
success in reducing poverty?
GNP and life expectancy
1979 Data
GNP and life expectancy
GNP per capita and Life Expectancy at Birth, 1994
74
$7,000
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
$-
52
Kerala
China
Sri Lanka Namibia
GNPpc
Brazil
S. Africa
Gabon
Life Exp.
From Development as Freedom, Amartya Sen 1999. Figures from Country Data World Bank, World Bank
Development Report, 1996
Globalization is….
“When the profit motives of market players get out
of hand, they challenge people’s ethics – and
sacrifice respect for justice and human rights.”
“More progress has been made in norms,
standards and policies for open global markets
than for people and their rights.”
“Patent laws pay little attention to the knowledge of
indigenous people. The result – a silent theft of
centuries of knowledge from developing to
developed countries.”
1999 Human Development Report, UN Development Program
Globalization also is...
 “The collapse of space, time, and borders
may be creating a global village, but not
everyone can be a citizen. The global,
professional elite now faces low borders, but
billions of others find borders as high as
ever.”
 “The new rules of globalization – and the
players writing them – focus on integrating
global markets, neglecting the needs of
people that markets cannot meet. The
process is concentrating power and
marginalizing the poor.”
1999 Human Development Report, UN Development Program
Growth
 Myth: neoliberal capitalism is the only
way to achieve economic growth (Does
everyone “know this to be true?”)
 Myth: Growth will automatically translate
into greater prosperity for all
 Myth: Growth is an sufficient objective
 Myth: Economic laws and markets
function independently of politics
Golden Age of Growth
 1945-1970 was golden age of capitalism,
industrialized countries grew at 5% annually
 Managed growth by governments (Keynes)
 High trade flows, low currency flows (restrict
mobility of capital)
 Oil crisis of 1973 heralded end of age
 Stagflation (high rates of inflation and
unemployment)
 Election of anti-state governments in UK and
US
Globalization = neoliberal capitalism
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High debt burden
Promotion of “free markets”
Relaxation of trade barriers
Reduction of subsidies for the poor
Privatization of public assets
Weakened role of government
Growing dominance of western-based
transnational capital
 Continued high military expenditures
The “global economy”
 Crushing debt burdens on poor countries
 “Free trade” theory elevated to dogma
 Diminished aid from rich countries to poor countries
 Accelerated capital flows and increased influence of
privatization of public assets
 Increasingly important role of transnational
corporations
I. Debt crisis (1982 to present)
 Commercial banks loaned vast amounts of
capital to developing nations at high
interested rates, not predicting….
 Changes in international economy
 Expanded bank lending, fueled by oil prices
 Increased government borrowing
…many countries stretched to thin - July 1982
Mexico defaults, heralding beginning of crisis
The crippling burden of debt
 Countries of Sub-Saharan Africa spent an average of
$12 billion annually on debt repayments from 19901995, while their total debt increased by $33 billion.
 For 27 highly- indebted nations, debt is greater than
their GNP.
 Tanzania’s debt service payments are nine times what
it spends on primary health care and four times what it
spends on primary education.
 Mozambique has a debt burden nine times the value
of its exports.
1998/9 Human Development Report, UN Development Program
Neoliberal diagnosis
 State playing too large a role
 Markets are being inhibited, state
intervention is preventing markets from
being efficient
 Government should stick only to
property rights and enforcing contracts
Neoliberal prescription
 Reduce role of state relative to the market
 Allow floating currency rates, and wages to
be determined by market forces and interest
rates
 Lift all barriers to trade and investment
(opposite of Adam Smith’s “invisible hand” –
free movement of labor but not capital)
International Financial Institutions
 “Bretton Woods Institutions,” NH, July 1944
 World Bank (WB)
 Support embedded liberalism
 “Free trade”, restrictions on capital mobility, and
domestic social contract
 Provided loans to countries for development
projects
 International Monetary Fund (IMF)
 Prevent currency fluctuations/devaluations
 Contain 1930-style economic crisis
 GATT – General Agreement on Tariffs and
Trade
World Bank program of “Structural Adjustment” of
the world’s poorest countries
 Re-orienting economies toward export production,
away from self sufficiency
 Removing restrictions on foreign investment
 Reduction of wages
 Cutting tariffs
 Imposing consumption taxes (value added tax/VAT)
 Eliminating price subsidies on essentials like food
and housing
 Devaluing local currency
 Privatizing state enterprises
 Deregulating gov’t oversight of economic activity
Structural adjustment report card
 75 countries had received loans by 1991
 30 in SSA, 18 in Latin America
 Overal debt increased, both official debt and
commercial debt
 Did not reduce debt, reduce poverty, or
increase growth
 New category HIPC – Bolivia, Burkina, Ivory
Coast, Guyana, Moz, Uganda
Growth for whom?
 Only 33 countries achieved sustained three
percent annual growth in gross national
product (GNP) per capita during 1980-1996.
 For 59 countries, mainly in sub-Saharan
Africa and the countries of the former Eastern
Bloc, GNP per capita declined from 1980 to
1996.
1999 Human Development Report, UN Development Program
Revised poverty agenda - 1990
 Labor intensive growth, invest in human capital,
promote social safety nets
 Enhanced Structural Adjustment Facility (ESAF)
 Enhanced Heavily Indebted Poor Countries Initiative
(HIPC) led by the G8
 Reduction of tariffs, elimination of state support for industry,
privatization of infrastructure to foreigners, removal of capital
controls, opening up of service sector to foreign investors
 Goal was to bring debt burden to “sustainable level,”
although HIPC failed to achieve goals
 Progress has still not been achieved, as many sub
Saharan African countries’s growth has been static
for the past 15 years
Investing in Health,
World Bank 1993
 Promoted cost-efficiency approach to health
care in developing countries in a world awash
with capital.
 Medical care defined as a commodity, and
health defined as the absence of disease.
 The concept of disability adjusted life years
(DALYs) promoted.
 Marked the entry of the World Bank in funding
large health care projects in poor countries,
such as vertical vaccine campaigns, TB
control, etc.
What are the health effects of the
IFIs?
 ESAFs have failed to significantly raise GDP
of participating countries
 ESAFs have failed to reduce external debt
burden of most highly indebted countries
 Social safety nets are nonexistent: for
education, health, housing, social security
 “Cost-effectiveness” calculus further hurts the
most vulnerable populations, violates their
social rights, and results in continued
stagnating health outcomes
II. World Trade: separate worlds
 48 poorest countries account for 0.4%
of global exports
 Share of world’s exports by least
developed nations fell from 15% in 1968
to 13% in 1998
 Transnational trade (globalized
economy) reaches AT MOST only 1/3 of
the world’s population
“Free trade”
 More trade between nations in late
1800s than there is now
 46% of world trade is between EU, US,
and Japan (OECD)
 Actually 30-40% of “trade” consists of
transactions within same TNC, trading
with their own affiliates
More on trade
 Most new manufacturing growth comes from
NICs (SK, HK, RoC, Sing.)
 Single commodity exports account for half of
export earnings for many countries
 The record shows, however, that the US, Rep
of S Korea, Taiwan, & Japan ALL developed
under restricted and protective trade laws
World Trade Organization
 WTO created in 1990 to supersede GATT
 Set up to manage world trade system
 Extensive set of regulations and rules are
required (free is a misnomer)
 Many argue these rules are set up to benefit
the powerful, the TNCs, big finance capital
from West
 All meetings held closed door
III. Diminishing aid from the West
 US is steadily decreasing its annual
contribution in foreign development aid,
which is now at 16 cents for every $100
 Many other countries, especially
Scandinavia, devote over 80 cents/$100 of
their GNP for foreign aid
 Blair proposal is to increase aid to 70 cents
for every $100 by 2015
 Given historical US rates, we will never
achieve that level
IV. Global finance capital
 Dramatic increase in movement of
capital
 Principle of free trade to capital?
 Daily trading in foreign exchange is over
$2 trillion per day
 Control of capital is increasingly
centralized
Transnational Capital Flows
 Currency flows reach trillions of dollars every
day, mainly between developed countries.
 Foreign direct investment (FDI) reached
$XXX billion in XXXX
 FDI is dominated by TNCs
 58% of it went to developed nations, and just
5% to the transition economies of Central and
Eastern Europe
Foreign Direct Investment (FDI)
 FDI in developing countries increased from
$18.3 billion in 1983 to $149 billion in 1997
 FDI to developing countries is highly
concentrated: 80% went to only 10 countries,
with China as the largest recipient
 The 100 smallest countries received less than
1% of worldwide FDI
 Only 5% of FDI to developing countries goes
to Africa
New poverty agenda – 2000s
 Caps on health and education
expenditures, esp staffing
 User fees
 Liberalization of imports
 Export driven growth
 Structural adjustment in disguise?
G8 (G7?) Communique – July 2005
 Bilateral Debt cancellation
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Limited number of countries (18)
Conditionalities
Strict surveillance and transparency requirements
“Good governance” (aka “anti-corruption”)
 “Free trade”
 Further liberalize economy
 Lower trade barriers
 Increasing development aid?
 Bush left without any further commitment of funds
Alternative Global Equity Agenda 2005
 Complete multilateral debt cancellation
 Unconditional cancellation of all sovereign
developing country debt
 Cap on debt servicing level
 Fair trade justice
 End of conditionalities on trade and tariffs
 Ending of agricultural subsidies
 Adequate aid (> 0.7%) to meet need
Source: Adbusters
“I see in the near future a crisis approaching
that unnerves me and causes me to tremble for
the safety of my country. Corporations have
been enthroned and an era of corruption in high
places will follow, and the money power of the
country will endeavor to prolong its reign by
working upon the prejudices of the people until
all wealth is aggregated in a few hands and the
Republic is destroyed.”
President Abraham Lincoln, November 21,
1864, letter to Colonel William F. Elkins.
V. Transnational Corporations
TNCs
 “Non-state actors”
 Characteristics
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Economic power
International character
Impact of activities
Regulatory difficulty in LDCs
TNC Economic Power-1
 Of the 100 largest economies in the world, 51
are corporations (sales versus gross
domestic product/GDP)
 The top 200 corporations’ sales are growing
at a faster rate than global economic activity
 The top 200s’ combined sales are 18 times
the size of the combined annual income of
1.2 billion people living in severe poverty
 US firms dominate the top 200 (82), while
Japanese firms are second with 41
TNC Economic Power-2
 The sales of the Top 200 are the equivalent of
28% of world economic activity, they only
employ 0.8% of the world’s workforce
 Between 1983 and 1999 Top 200 profits grew
by 362%, but employment grew by only 14%
 44 of 82 US Corporations in the Top 200 did
not pay full taxes; Seven actually paid <0% Texaco, Chevron, Pepsico, Enron, McKesson,
Wal-Mart
TNC International Character
 The top corporations earn 40-50% of their
yearly profits from sales overseas
 Assets of TNCs are also located overseas,
33% of pharmaceutical industry, and 75% of
electrical industry
 Many examples of individual factories and
entire industries moving overseas to benefit
from reduced wages, lower standards, higher
profit margin
Takeover in Nigeria
 150 Ugborodo and Arutan women successfully shut
down a Chevron/Texaco oil plant in Escavros for
several weeks in June/July 2002 by occupying an
pipeline terminal, trapping 150 workers inside
 Demands: Jobs for locals and electricity for their
villages
 Damage to Nigerian environment and health of
villagers throughout Niger River Delta from oil and
gas drilling is extensive
New York Times, July 14, 2002, Foreign Desk
Gas flaring in Ogoniland,
Niger River Delta,
December 2002
Credit: Owens Wiwa
HR Impact of TNC Activities-1
 Civil and political violations
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Violate right to self-determination
Violate freedom of association
Perpetuate racial discrimination
Genocide against indigenous peoples
Violate right of people to dispose of the natural
wealth
 Bodily harm to people opposed to TNC by security
forces
HR Impact of TNC Activities-2
 Violations of ESC rights
 Right to work freely chosen
 Right to just and favorable working conditions, fair
wages, equal pay for equal work, safe and health
working conditions, reasonable limit on working
hours
 Right to education
 Right of children to be protected from economic
and social exploitation
 Right to an adequate standard of living for
individuals and their families
HR Impact of TNC Activities-3
 Indirect impact
 Pursuit of export oriented economic
policies
 Destruction of environment
 Urbanization
 Engaging in business with repressive
regimes
TNCs and Repressive Regimes
 Loans to repressive regimes
 Breaking sanctions against repressive
regimes
 Buying from repressive regimes
 Selling to repressive regimes
 Lending credibility to repressive regimes
Health and Human Rights Impact
of TNC Activities-1
 Oil/power exploration
 Texaco-Gulf in Ecuador – environmental
destruction
 BP in Colombia – private security abuses
 Royal Dutch Shell in the Niger Delta – murder and
environmental destruction
 Mining industry
 Freeport-MacMoRan in PNG – mine tailings
 Chemical Industry
 Union Carbide - Bhopal Disaster 1984
 Manufacturing industry
 Wal-Mart, Disney, K-Mart, Kathy Lee Gifford
Health Impact of TNC Activities-2
 Maquiladora sector on US-Mexican border has
blossomed to over 2,500 factories
 Assembly plants, part of export processing strategy
to develop Mexico (though most people there live in
squalor)
 90% are owned by US corporations, though often
subcontracted work; Korean corporations also
common
 Preferential tariffs, low taxation, lax environmental
standards
Health Impact of TNC Activities-3
 Maquiladora sector characterized by low wages, poor
working conditions, environmental abuse, poor
infrastructure
 Human rights issues center around fair wages, right
to organize, hazardous working conditions, disclosure
of hazardous waste, safety training, infrequent
occupational inspections, occupational compensation
for injury, sexual harassment, child labor, housing
conditions
 Health issues center around repetitive strain,
noise/solvent/toxic waste pollution, miscarriages, skin
disorders, pulmonary disease/asthma, depression
Approaches to regulate TNC
abuses
 “Social Responsibility” approach
 Promotional, use rational persuasion and moral
argumentation
 TNCs to sign corporate codes of conduct
 “Social Accountability” approach
 TNCs can’t self-monitor, need independent accounting
 “Economic threat” approach
 TNCs only respond when profits threatened with boycotts,
etc.
 “Punitive” approach
 Sanctions, selective purchasing laws, divestment campaigns
Regulating TNCs-1
 Commission on Transnational Corporations in 1975
formed draft code – focused on bribery, disclosure of
dangerous processes, and export of hazardous
products and factories
 Blocked by Reagan administration and died a sudden
death
 As “Non-state actors” they cannot be held
accountable to same standards as states in UN
 Voluntary codes exist, but no enforcement
 Declaration and Guidelines on International Investments and
Transnational Enterprises (OECD)
 Tripartite Declaration on Principles of Transnational
Enterprises and Social Policy (ILO)
 WHO/UNICEF code on infant formula marketing
TNC Response to Criticism
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Avoidance
Resistance
Acquiescence
Compromise
Corporate Codes of Conduct
Bare essentials
 Employment standards – nondiscrimination, working hours,
compulsory labor, fair wages, child labor, freedom of
association, healthy workplace guidelines, excessive
punishment guidelines
 Environmental standards – protection of biosphere, energy
conservation, sustainable use of resources, risk reduction,
disposal of waste
 Internal compliance regulations – personnel to monitor
compliance, business partners to abide by standards
(outsourcing), audit instruments to be used on site
 Country assessment guidelines – assessment of performance of
all affiliates, gathering information from all sources
 Independent monitoring
Amnesty International HR
Principles for TNCs/companies-1
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Explicit company policy/UDHR
Security/law enforcement policy
Community engagement
Freedom from discrimination
Freedom from slavery
HR Principles for Companies, Amnesty International
HR Principles for
TNCs/companies-2
 Healthy and safe work environment
 Freedom of association and right to
collective bargaining
 Just and favorable working conditions,
including security and fair
compensation/wages
 Freedom from child labor
 Monitoring human rights policy
HR Principles for Companies, Amnesty International
Corporate Codes of Conduct
Current problems
 Lack of uniform language
 Lack of compulsory enforcement
mechanisms
 Lack of language on sexual harassment
 Fair wage/living wage clauses often
inadequate and vague
 Codes do not cover contractors and
outsourcers
 ***Lack of independent monitoring***
Do we really live in a “global
village”?
*Marshall McLuhan
“People say, what is the sense of our
small effort? They cannot see that we
must lay one brick at a time, take one
step at a time. A pebble cast into a pond
causes ripples that spread in all
directions. Each one of our thoughts,
words, and deeds is like that. No one
has the right to sit down and feel
hopeless. There is so much work to do!”
Dorothy Day
Summary
 Civil-Political rights and Social-EconomicCultural rights are interdependent and
indivisible, cannot have one without the other
 Neoliberal capitalism and its “aid system”
imposes many constraints on poor countries
in promoting and protecting health rights
 Globalization brings with it many human
rights issues not generally discussed
 Transnational corporations and other nonstate actors have health and human rights
impacts that should and can be monitored
Militarism
 $781 billion spent per year on military
expenditures
 78% of expenditures done by
developed countries
 The US exports over $50 billion in arms
every year, more than all other
countries combined
1998 Human Development Report, UN Development Program
Health costs of the weapons race
 “War is bad for public health”
 Majority of casualties since 1900 have been civilians,
more so in the last 50 years
 75-90% of casualties since 1980 have been civilians
 Health care facilities are targets in wars, ie El
Salvador, Nicaragua, Mozambique, Philippines
 Arms not only kill, but do chronic damage
 Landmine injuries cripple victims for life
 Arms fought with small arms have long lasting effects, ie
Rwanda, Sierra Leone
Arms exports
 The US exports over $50 billion in arms every year,
more than all other countries combined
 Many of these exports are to developing nations,
especially those in conflict, human rights violations
common
 Of 24 countries which experienced at least one
armed conflict in 1997, the US had sold arms to 21
out of 24
 US taxpayers spent $7.6 billion in 1995 to promote
and finance weapons exports – taxpayers underwrite
the R&D of weapons, subsidize the costs, privatize
the profits, and employ thousands of government
staff whose main jobs are to promote US arms sales
1998 Human Development Report, UN Development Program
Share of world arms exports by
US, 1984-1996
Indirect costs of weapons race
 Diversion of resources from developing countries
budgets into weapons, away from social needs
 Some countries spend 5-10% of the GNP on military
expenditures (Sivard’s Military and Social
Expenditures yearly almanac)
 Damage to the environment/hazardous waste, from
weapons manufacturing as well as use (in US as well
as abroad)
 Create of climate of violence/crime, ie El Salvador
What can we do?
 Document the effects of war on health and
public health
 Disseminate this information widely
 Work for peace! Not militarism
 SIGN THE LANDMINE TREATY!!
Code of Conduct in arms sales
 “Code of Conduct” needed to ensure that arms do not
fall into wrong hands
 Code would prohibit arms exports to any government
that does not meet criteria set out by law: democratic
government, respect for human rights of citizens,
non-aggression, and participation in the UN Register
of Conventional Arms.
 Many supporters, Nobel Laureate Oscar Arias
Sanchez, Rep Cynthia McKinney from Georgia, Rep.
Rohrbacher from California