Nexus - 0504 - New Times Magazine-pages

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investment; the removal of safeguards in stock markets that limit DANGERS OF TNC DEPENDENCY flash sell-offs and capital flight; and prevention against the adop- The OECD's haste in pushing the MAI through can also be tion of regulations which would restrict or control foreign invest- attributed to the fear that the deregulation wave may be losing ment in their countries. momentum. MAI negotiations started in 1995 at a time when Today, with the Asian economies more exposed, TNCs are buy- OECD countries were intoxicated by the signing of the GATT and ing out local companies at bargain prices and, at the same time, the birth of the WTO. Since then, although many more steps have gaining new market territory for themselves. been taken on the path towards a deregulated world market with- out borders for goods or capital flows, there are also increasing FUNDAMENTAL FLAWS OF THE MAI signs of a backlash arising from Southern governments and from The next few months will be decisive for the future of the MAI, people all over the world. the Multilateral Agreement on Investment. OECD negotiators The financial crisis in Asia was a painful lesson for the many appear determined not to extend the deadline for the negotiations Third World countries which had been forced to scrap the very a second time. They are racing against the clock to resolve con- regulations that could have prevented such a crash. Some govern- flicts between various countries, and are busily decorating the ments, including Thailand, have now started talking about the agreement with non-binding wording on social and environmental need to reintroduce regulation. standards in an attempt to neutralise the critique and improve the Critique of the deregulation model has also recently come from chances of getting the MAI through national parliaments. Any surprising corners: financial speculators George Soros and the further delay would leave MAI's future extremely uncertain. late Sir James Goldsmith, for example, have both repeatedly Experience has shown that additional time serves only to multiply warned against the social and environmental dangers of unbridled problems for the negotiators, as more and more negative impacts economic globalisation. of the MAI come to light. The next step includes voicing clearer alternatives, and advocat- Most recently, the European Parliament's queries about how the ing policies which reduce the current dangerous dependency upon MAI would affect future possibilities for improving social and transnational investment. Economic globalisation and deregula- environmental policies within the EU have brought problems with tion have created a vicious circle in which investment dependency the MAI to the surface. forces workers, communities and The multiplying number of pages governments into increasingly harsh of reservations demanded by national competition on wages, taxes, environ- delegations have placed the OECD's . mental protection and anything else rosy picture of a 'win-win' treaty in a The NGO plot to kill the MAI that might influence investment con- ating qoverments are at lant boom. has been termed ‘the Dracula on That international competitiveness ing wary of the impacts that the MAI strategy": simply, bringing is becoming the single most important indication of the fundamentaliy | _PUblic attention to a treaty that Fao Sos scenario for disaster and flawed character of the treaty. cannot stand up against the light. will unavoidably lead to a downwards MAI negotiators are likely to spiral in social and environmental announce a political agreement on standards, and delay or freeze desper- the MAI at the OECD's Ministerial ately needed progress in these areas. Conference in May. Over the next It is in reaction to this economic months they will focus on adding the finishing touches so that the | dependency upon TNCs that OECD governments have developed treaty can be officially signed in November 1998. This is obvi- the MAT in close cooperation with business lobby groups, and ously a highly undemocratic procedure and is symptomatic of the why they are now desperately trying to push it through before the entire process to date. public is clued in to what is happening. Although the rigid economic model that MAI signatory coun- Finally, TNC dependency is what is stimulating an increasing tries will be forced into may enjoy strong governmental support number of Third World countries to queue up to sign the MAI so today, it will likely attract growing critique over coming years as that they can receive a stamp of approval for having a first-class its social, environmental and political impacts become increasing- investment climate. ly visible. Joining the MAI involves a 20-year lock-in to a dereg- There are no lack of policy options for reducing TNC depen- ulated system in which countries are completely dependent upon dency and putting economic diversity and prosperity of local the global economy, foreign investments and foreign investors— communities first. These options include: community reinvest- in other words, upon TNCs. Countries facing economic problems ment rules; limits on company size to avoid unfair competition; or other challenges will be barred from seeking new solutions. subsidies for local production for local use; efficient taxation of This is not only undemocratic but also extremely dangerous. TNC profits to ensure that the local economy benefits from their Citizens' campaigns against the MAI are increasing in strength presence; regulation of capital flows; and numerous other current- day by day and in country after country, and the media are at last —_ly unfashionable policy options. Of course, these are the type of taking notice of the treaty. The NGO plot to kill the MAI has measures which would be banned if the MAI survives. been termed "the Dracula strategy": simply, bringing public MAT entails the institutionalisation of neoliberalism as the only attention to a treaty that cannot stand up against the light. option—the creation of a global economic constitution that is the Thus far, the response from OECD governments to the increas- equivalent of economic monoculture. ing pressure has been the addition of non-binding language to the The struggle against the MAI has demonstrated the enormous treaty's preamble and elsewhere, but most NGOs recognise these necessity and potential for grassroots globalisation on these com- as pseudo-solutions that do not change the fundamentally flawed _ plex, far-reaching issues. Information and strategies are being character of the MAT. shared among an increasingly strong network of citizens, NGOs, investment; the removal of safeguards in stock markets that limit flash sell-offs and capital flight; and prevention against the adop- tion of regulations which would restrict or control foreign invest- ment in their countries. Today, with the Asian economies more exposed, TNCs are buy- ing out local companies at bargain prices and, at the same time, gaining new market territory for themselves. The NGO plot to kill the MAI has been termed “the Dracula JUNE - JULY 1998 NEXUS - 29