COMMISSION ON NEDLAC, SOCIAL DIALOGUE AND THE MULTI-LATERAL INSTITUTIONS WTO, IMF, WB, ILO

Facilitator: Thandi Marah. National Women's Coalition
Speaker: Professor Raymond Parsons, Overall Business Convenor
Respondent: Faizel Ismail, Deputy Director General, International Trade and Economic Development Division, Department of Trade and Industry.

1. OPENING AND WELCOME

The Chairperson opened the commission and welcomed those present. She introduced the speaker and the respondent to the commission and explained the procedure to be followed.

2. SUMMARY OF ISSUES RAISED BY PROFESSOR RAYMOND PARSONS

2.1. Social dialogue

The term "social dialogue" embraces a broad concept involving the interchange of ideas and consultations between and within nations. It is a process or mechanism for the amicable adjustment, internally or externally, of differences amongst nations, groups, ideologies, beliefs and interests.

2.2. Challenges facing social dialogue

Challenges that lie beyond the reach of national states range from financial volatility to trade and climate changes. There is a clear need to encourage coordinated international action whenever relevant as has become evident from the September 11 attacks in the United States.

Regional challenges

It has become imperative for the Southern African region to organise itself economically in a more competitive way, including a free Trade Area, because of the significant regional blocks that exist. Many plans for economic programmes implemented for the region and continent as a whole are facing obstacles that fail them. The constructive use of social dialogue can close the gap between expectation and realisation.

Social dialogue in Southern Africa still has a long way to go. Concerns have been raised about the lack of democracy and social dialogue in several SADC countries.

Among the difficulties experienced are perceptions of social dialogue by the partners, lack of political will and insufficient technical competence and commitment of the partners.

Effective social dialogue presupposes at least three parties, government, labour and business, but ideally it should be broader. It assumes that the parties are willing to cooperate, and are confident to select issues they wish to discuss. It further assumes that there is respect for basic principles of human and constitutional rights. Until those norms and values are shared, the prospects for social dialogue at a regional level are limited.

Limitations hamper on broader economic and social issues, because regional social dialogue ultimately has to be built on the foundations of national social dialogue if it is to have credibility and authority.

South Africa should seek to promote social dialogue in the region as part of the shared vision for the future. That could be done through NEDLAC or together with the International Labour Organisation (ILO). It could ensure that economic growth goes hand-in-hand with social progress and may also help ally some of the fears which neighbouring countries have of South Africa's dominance in the region.

Social dialogue does require time and patience. It needs to be supported by unequivocal commitment, including appropriate institutional reform and strategies, to secure the preconditions for social dialogue and remove the factors that hinder its effective functioning. Social dialogue structures should not be abandoned if they are not seen to provide a solution. Rather, it should be ensured that institutional frameworks for social dialogue work effectively.

The ILO programme for improving social dialogue could be brought in, which includes those aspects of strengthening representation, capacity and service, and joint institutions of governance.

Global challenges

Poverty - with globalisation the rich get richer and the number of very poor people has increased in absolute terms. Inequality is perceived to have increased both within, and between countries.

The rules of the World Trade Organisation (WTO) are regarded as unfair, compelling the poor countries to accept goods that destroy local jobs and by limiting their agricultural exports. The 50 least developed countries represent 10% of the world's population, but only 0,5% of world trade.

International Monetary Fund (IMF) and World Bank (WB) are believed to epitomise economic autocracy over indebted countries. The efforts to give debt relief are seen to be too little, too late and too prescriptive.

Globalisation is perceived to be too skewed in favour of multinational corporations, who pursue profit at the expense of poor countries and the destruction of the environment.

2.3. Conclusion

World Bank studies indicate that trade liberalisation benefits the poor as well as the rich in emerging economies. The poorest countries have suffered from too little globalisation, rather than too much and they are desperate for foreign investment. Economic mismanagement, corruption and civil war are equally to blame for poverty. There is no credible evidence, which equates openness to trade with inequality. Income and poverty levels look somewhat better if expressed as a proportion of the total population.

All these suggest that economic growth generated by globalisation makes the poor better off in relative and absolute terms, although falling far short from what we expect.

Only the globalisation of civil and democratic institutions, it is said, is likely to offer a way out of the global conflict between modernity and its crisis. By expanding democracy to the global market, it can promise participation and governance for those wishing to join the modern world, and to take advantage of its economic blessings.

The developed countries will have to find more effective ways of engaging developing countries on managing globalisation in ways which are perceived to be spearheading its benefits more widely. Some of this has already been done through the World Bank.

One immediate priority is the priority of trade talks in the WTO. Developed countries must not see it as all take and no give.

South Africa should encourage the ILO to take a leadership role in upgrading its interaction with bodies like the IMF and the WTO, in light of the changed circumstances.

The official architecture of globalisation needs to be more responsive to consultation and dialogue. A culture of social dialogue needs to be entrenched internationally.

3. SUMMARY OF ISSUES RAISED BY FAIZEL ISMAIL

3.1. Analysis of Globalisation

A general approach of analysing globalisation has been taken to be an increase in flows of trade, investment, and finance around the world. The process is not new but has intensified over the past few years.

The tendency in the global economy has been for the process to lead to increased intense marginalisation and inequality both within and between countries. African countries tend to be the ones more marginalised, as others become richer we become poorer and also more disengaged from the rest of the world.

The rules of the game are unfair. The WTO as a forum of engagement and the rules created through engagement between countries and the WTO have resulted in unfair trade rules. The game is played according to different rules. An example cited was that of industry and agriculture whereby the rules developed for industry are not applied to agriculture. The European countries have negotiated in the rules that they can continue to subsidise their agricultural industries by R1 billion dollars a day. That would make exporting to the European market difficult, as they subsidise their farmers and that makes it less costly for them to produce. Exporting agricultural products to third world markets is also difficult as farmers in the European markets export to the third world.

The rules on intellectual property rights are imbalanced and in favour of the multinationals and also against the majority of consumers of pharmaceutical products and drugs. That makes it impossible to have affordable and cheap drugs. The rules were negotiated at the last round of trade negotiations in a way that big companies were given patent rights to protect those products.

There are tremendous risks in the global economy resulting from peoples' perceptions. The threats in the world system have grown but there are also opportunities. It is possible for countries to develop and grow in the world economy. The US was a low risk country, which led to massive foreign investment, and thus has strengthened its currency. This was however changed by the terrorist attacks of 11 September. It poses an opportunity for countries like South Africa, which has through social dialogue, created an environment that has reduced the risks associated with development. The confidence has been evident as South Africa been asked to hold international conferences.

It is hoped that business would understand that as well and direct their investment in the Country.

3.2. Policy response to Globalisation

Strategic engagement in the world economy and system is needed, in order to be able to change some of the rules and the way the game is played. This could be done by mobilising the positive forces including developing countries and social forces within countries from the North.

In 1996 South Africa had attempted to build the balance of forces so as to change the imbalance of power by hosting a United Nations Conference for Trade and Development (UNCTAD). It is a forum of engagement for countries who engage in the WTO, and it is supposed to help countries prepare their positions before engaging at the WTO.

South Africa made a contribution at UNCTAD by arguing for the concept of development to be at the centre of trade and investment flows in the world economy, so that in any negotiation of the world economy social impacts of the policies should be looked at. There should be a way of managing the process so that the impact on society encourages development. The issue of environmental protection was also seen as important and a concept of sustainable development was adopted. Sustainable development is a positive relationship between trade, investment flows, economic and social and social development and environmental protection.

A concept of partnerships was also promoted at UNCTAD, as the world had changed and there were no longer tensions among north and south or east and west. It is possible to create partnerships between continents due to the greater interdependence between countries in the world economy. More developed and developing countries should also contribute to undeveloped countries. Hence a concept of tripartite partnerships was developed. It is a partnership between developed countries of the North, and both developing and some least developed countries in the south.

There have been interactions at the southern African level, to expand the domestic market and the capacity to manage interactions with the global economy, and thus increase competitiveness in the world economy. Another form of engagement by South Africa has been with the North, and that was by negotiating with the United Nations and the European Unions, so as to encourage greater flows of investment. Negotiations with the southern countries have mostly been on political discussions and not much has been done in terms of economic linkages although the process has commenced.

3.3. Social partners' interaction with multilateral institutions at a global level

At UNCTAD South Africa called for the inclusion of other partners as it was only a forum for negotiations between governments. It also called for the same structure to be developed within the WTO, which was also a forum of governments' negotiations. NGO's need to have a role in the processes so that governments could be more sensitive to the social impacts of the rules created at those forums.

Since the formation of the WTO there had been social interactions at ministerial meetings which encouraged a forum for NGOs. That would be the same even at next round of trade talks to be held in Doha. The NGO's would meet two days before the ministerial session and to date 720 NGOs have been confirmed to attend.

Policy coordination between the major UN institutions was also called for at UNCTAD. The process has now begun for the WTO, ILO, IMF and the ILO to interact and have a coordinated relationship.

With greater interaction by social forces both within countries at a national level and within institutions and between social forces and institutions at a global level, some of the objectives which have been set could be achieved.

4. SUMMARY OF THEMES DISCUSSED

4.1. The promotion of social dialogue at a regional level so as to integrate the regional economy to the global system.

4.2. Multilateral institutions' address of the priority issues of concern to South Africa, i.e. development, poverty alleviation, unemployment and HIV/AIDS.

4.3. How the trade rules can be influenced to ensure a beneficial outcome.

4.4. How a reciprocal and mutual relationship can be built that would ensure a common agenda, which could exploit the opportunity to turn things around for developing countries.

4.5. The strengthening of social dialogue within the business community to grow the production base and generate employment.

4.6. The access to globalisation, and harnessing of the flows in trade, skills and technology.

4.7. The strengthening of mechanical institutions in the region so as to develop a common agenda for the region. This would alleviate the mistrust caused by SADC countries towards South Africa in the negotiations of country deals in ways other than using the collective strength of the region.

4.8. The inclusion of agenda of other stakeholders constituting the social dialogue process. The mandate of other social partners to also be put forward in trade negotiations.

4.9. The decisions of excluding other NGOs in trade talks.

4.10 Exploration of the kinds of social dialogue existing in other countries.