Strategic change of direction required towards social and sustainable globalization

Development Policy03 Feb 2014Frans Bieckmann

After far-reaching cutbacks and a major shift in the mandate in favour of the Netherlands’ economic interests, Dutch development aid seems to be on its last legs. The relief troops have lost their way and are unable to mount a forceful counter-attack. Yet there is a dire need for a strategic change of direction towards social and sustainable globalization.

In the past three decades, in the wake of economic globalization, income inequality in the world – both within and between countries – has increased considerably. In that time, a series of cross-border problems have also become more urgent, problems that cry out for a resolute response from the ‘international community’. They relate to environment and climate, the scarcity of resources, energy and food, migration flows, transnational crime and terror, distribution issues, and a global financial system that is eroding itself from within.

Politicians – not only in the Netherlands, but in general – still widely live in the blissful delusion of the ‘end of history’: the course of economic, political and social development is more or less fixed, it is simply a matter of finding the right technical adjustments and applications to ease the road to progress. Even when the disastrous financial crisis finally also made itself felt in the heart of Europe and the US in 2008 (earlier crises had already struck hard in other parts of the world), that belief was never seriously shaken. The tectonic fractures in the financial and economic system were patched up with sticking plaster and disguised cosmetically, but there was no attempt to devise a well thought out alternative ‘grand narrative’.

And yet, this is a time to think again about the how the ‘big issues’ are interconnected. The world is changing at breakneck speed and no one knows in which direction it is moving. Every year, we parrot all the talk around yet another hype, from the economic threat of emerging powers (Oh wait, their growth is levelling out because it is partly related to money creation in the US), via hopeful democratic movements in the Middle East and North Africa (Oh wait, they’ve turned out to be conservative fundamentalists who have mobilized the masses behind them), to the internet as the bringer of freedom, democracy and enlightenment (Oh wait, it has proved to be the perfect vehicle for a wide variety of ‘Big Brothers’).

We have to be aware that we are in a global political and economic vacuum, a transition period in which no one knows exactly where it will end. We should start to think profoundly about where we have come from: what are the causes of the problems we are now facing? On the basis of what promises have we signed up for the current architecture of globalization, and is it not time to acknowledge that important promises have not been kept?

We also need to find a convincing answer to the question of how the Netherlands should relate to the current architecture of globalization, to persistent need and scarcity. In the search for a new, comprehensive political programme, a number of trends in current Dutch development policy can offer points of entry, such as a more economic approach to poverty and inequality, increasing attention for the political dimensions of development, and the first steps towards a policy focused on global public goods.

First of all, Dutch politicians too seem to have finally become aware that international economic relations and the opportunities available to the world’s poor are interconnected. The current government has, after all, chosen to link aid and trade under a single ministry. That brings policy coherence – so long advocated and so urgently necessary – closer but, for the time being at least, it tends to lean more towards the Netherlands’ economic interests than serve the goals of development cooperation. If you follow the flow of funding in development policy – mostly a better indicator than white papers and speeches that simply churn out politically correct concepts – you will see a shift of hundreds of millions of euros from civil society organizations to programmes that focus on the private sector.

There are also a number of positive trends in social and economic debates in the Netherlands. Greater attention is being paid to income inequality. And there is an embryonic awareness that economic growth does not automatically ‘trickle down’, as neoliberal economic theory has been promising us for several decades. The term ‘inclusive growth’ is a recurring theme in the policy documents of foreign trade and development cooperation minister Lilianne Ploumen, implying that we need to move towards another form of growth. Corporate social responsibility is still on the agenda, but has run aground in voluntary codes of conduct and ‘covenants’, though the minister continues to keep the issue alive by, for example, openly criticizing working conditions in countries like Bangladesh. Although it is one of Ploumen’s goals, the badly needed promotion of small and medium sized enterprises in poor countries is frustrated by a coalition partner that would rather see the fund set up for this purpose being used to support Dutch SMEs.

The second trend can be summed up as the ‘politicization of development’. In her policy, the minister places greater emphasis on the ‘watchdog’ function of development organizations. They should focus less on direct service provision in the South and more on lobby and advocacy: critically monitoring governments and businesses and ensuring that they ‘deliver’ to their citizens and customers. A promising trend which emphasizes the inherent political character of development is that it is not about technical progress and money, or capacity development to improve governance, but about power issues and distribution. Increased attention to a number of issues – including the functioning of tax systems (and the related legitimacy of the tax collector), an independent and critical media, respect for human rights, support for social and democratic movements and internet freedom – all fit within this trend. A separate category is greater attention to the empowerment of women, in which minister Ploumen is playing a prominent role.

This policy agenda seems, for the time being at least, to focus on democratization and influencing policy in the South and on monitoring incompetent and corrupt elites. But we need a social opposition here, too, to force political change: after all, income inequality is also increasing in Europe and, even more so, in the United States, and the reasons for that lie equally in the architecture of globalization that we have created. They are the consequence of an economic model that has not just ‘happened’ to us because of some unavoidable law of economics, but has been intentionally chosen as a basic principle of policy. In the past three decades, economic power has become enormously concentrated worldwide. There is an urgent need for watchdogs here, too; in The Hague, Brussels and Washington, a relatively small financial, economic and political elite has a disproportionate influence in the setting the rules of globalization.

A third, less explored and therefore more difficult to navigate (but also innovative and promising) area in that of global public goods. Traditional GPGs refer to climate, the oceans and other issues that cannot be understood or regulated within national borders and where long-term, shared public interests can sometimes clash with the pursuit of short-term private gain by economic or political actors. This would also appear to apply to the architecture of the global economic system, with growing wealth– together with rising inequality within and between countries – and increasing scarcity in the face of a swelling world population. Another policy area that is acquiring an increasingly cross-border nature is security: the most recent example of Mali shows once again that conflicts can no longer be solved with a limited (military) focus on a single country, but are closely related to developments elsewhere, in this case in the Sahel as a whole, West and North Africa, and further afield.

Global public goods, the global financial and economic system and international security can only be served by a principled shift towards social and sustainable globalization, and by operating strategically in a complex world in which a wide variety of economic and geopolitical interests are intermeshed. This requires accurate analysis of mutual interrelationships, independent and critical exchange of knowledge, a political standpoint on the architecture of globalization, and systematic monitoring of the various positions in that international game in order to identify like-minded players and potential allies. We simply do not possess the capacity for such strategic analyses – which go further than merely military intelligence – in the Netherlands and the need for it is hardly recognized.

In the coming period, steps will have to be taken towards social and sustainable globalization, in a form that combines all the ingredients described above in a logical whole. If that is successful, it can and must go far beyond development cooperation: it must be the foreign affairs component of a government-wide policy that makes the Netherlands, Europe and the rest of the world more just and sustainable and which is explicitly aimed at the strategic promotion of global arrangements which include the international economic and financial system. That means not more, but different, globalization, in other words globalization that makes it possible to regain ground on the ‘markets’, with more national policy space to offer not only an upper layer, but the population as a whole, the possibility of a life of human dignity.

Such a fundamental policy change can only be achieved by a visionary policy. You cannot expect a ministry of foreign affairs to reform itself to the far-reaching extent that is required. What can help is if there is pressure to pursue these reforms from wider Dutch society. Whether the development sector – together with environmental and human rights organizations that have also lost their way – succeeds in reinventing itself and initiating an intellectual and political offensive will quickly become clear. They will only achieve that if they can develop an integrated narrative together with more civil society organizations and sectors that operate on the domestic front. But let us above all give them the benefit of the doubt – who else can we expect to devote attention to those who are defenceless beyond our national borders?

The PDF of this article has been republished with permission of the editor from the Internationale Spectator. This is a monthly journal about international politics published by the Koninklijke Van Gorcum (Assen) on behalf of the Netherlands Institute of International Relations ‘Clingendael’ The Hague. For the Dutch version, please click here.