The West’s fake concern

by Rajiv Dogra

(November 24, New Delhi, Sri Lanka Guardian) Having failed to keep their economies afloat, developed countries of the West are now proposing intrusive controls over the economies of developing countries. For evidence, look at the document adopted at the G-20 Summit in Washington, DC

The exhilarating thing about international conferences is their feel-good factor. The late night sessions, the opportunity to be seated in the same room as the leaders you otherwise see only on television, the possibility of being wooed by major countries (when they want you to concede in the conference document) — all this is so heady.

Moreover, everyone gets the chance to speak. So besides contributing to the punctuation marks in the final document, you can also claim to the audience back home that the crucial inclusions or exclusions in the text were the result of your intervention. Most conferences are high on symbolism and tepid on performance, yet for the participants words are enough.

One advantage of attending international conferences is that for those few days the problems at home seem so remote and marginal compared to the global issues that you are engaged in. In any case that lofty global purpose is so much more alluring than the heat and dust of the domestic situation. It’s probably true of other countries too. But our delegations take themselves excessively seriously, and upon their return they claim invariably that their participation in the conference was a resounding success.

Likewise, we have done exceedingly well at the recent G-20 Summit in Washington. There was also the unexpected bonus of being able to say goodbye again to Mr George W Bush. It is another matter that at the dinner table and in the photo-op the pride of the place was given to Saudi Arabia, Brazil and China.

Prior to the meeting some had believed that the G-20 Summit would result in a fundamental change in the world financial institutions. There was also the hope that at the summit major countries might announce a substantial transfer of funds to the developing countries. Some went even further to suggest that since the responsibility for the current financial crisis was that of the West, and more particularly of the US, they should as penance compensate the rest of the world. All this was wishful thinking on a hopeless scale.

Naturally, each hope was belied. It had to be so. You can’t change the world at 24-day notice. In fact you can’t even organise a photo-op at 24-day notice — look how they forgot to include the Argentinean President in the first photo shoot.

The Bretton Woods arrangement took many years to materialise. A world war and many years of thought and careful planning intervened in between. Over the last six decades these institutions have served the world well, and the Western world even more so. Why should the West then give up its hegemony? In our enthusiasm we sometimes forget that the rules of the great games of the world do not change under temporary setbacks.

The West may accommodate a little to appease a few from the developing world at some stage, but it will not accept any fundamental shift. If restructuring of the global institutions was that simple, we would have long since become a permanent member of the UN Security Council.

And insofar as the other hopes are concerned, it is always good to remember that in the real world no country parts with its money easily. In the 1970s the developed world had committed to set aside 0.7 per cent of its GDP annually for aid to the developing countries. For all practical purposes that remains a ritualistic aim; even the developing world hesitates to remind them of it any longer. Some years ago the world had also set itself some lofty goals called the MDGs — Millennium Development Goals. These promises are remarkable for the degree of inaction on them.

It is therefore unrealistic to expect quick and concrete results from a hastily planned summit like this. And it will be naïve to hope that a lame duck President would be able to rein in during his last two months all that he had unleashed in the previous eight years.

Still, the G-20 Summit was not a wasted opportunity. For some, it was more than a social occasion. They achieved what they had planned to from the summit. For Mr Bush himself it was an attempt at salvaging, just a little, his otherwise disastrous economic legacy. For the major European players it was an opportunity to wriggle concessions out of a cornered US.

Their objectives were clear from before the summit, they were well chalked out and clearly defined. France wanted tighter accountancy systems globally and a strengthened role for the rating agencies. Britain was opposed to bail-outs and in favour of economic stimulus. Germany wanted greater surveillance of hedge funds.

The nine-page document adopted at the summit is a tribute to their success. It emphasises the need to strengthen the accountancy systems, placing special emphasis on the role of the private sector. The regulatory regime recommended in the document could well be the thin end of the wedge for intrusive policies. The credit agencies could gain further in importance. All these are areas where the West is already in a monopoly position. The new vigour that the document purports to implant could make them the standard-setters and the presiding deities for years to come.

But the real punch is in the tail of the document. The final paragraph says: “Advanced economies, the IMF, and other international organisations should provide capacity-building programmes for emerging market economies and developing countries on the formulation and the implementation of new major regulations, consistent with international standards.”

Is this not a recipe for intrusive oversight? There are many other inclusions which should make us sit up and worry. But suffice it to say that we should give the document a careful second look. It may contain many more surprises.

However, the larger question that arises is whether we are right in scaring our population to economic death.

Shouldn’t we turn our focus on the issues that face us on financial, economic and industrial front and the solutions that we can device on our own? History does not contain examples of countries that have flourished on the largesse of others. It does not work for people and it has never worked for nation states. We have to fight our own demons. Our biggest weakness has been and remains our woeful infrastructure, the first calling card of any country. It was through massive investment in infrastructure that European states rose from the ashes of World War II. We too can begin to conquer poverty once we have the roads that actually take us places and the power plants that produce enough to light up a billion lives.

Then, and only then, will we be free of the intrusive interest of others.

-- The writer is a senior diplomat who has served as India’s Ambassador to various countries.
- Sri Lanka Guardian