Of globalisation and new insecurities Interview with Dr Guy Standing, Director, ILO Socio-Economic Security Programme.

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Sat Oct 30 2004 - 03:23:09 EDT

Vol:21 Iss:22 URL: http://www.flonnet.com/fl2122/stories/20041105000808000.htm

Of globalisation and new insecurities

Interview with Dr Guy Standing, Director, ILO Socio-Economic Security

Dr. Guy Standing, Director of the International Labour Organisation's
Socio-Economic Security Programme, which compiled the "Economic
Security for a Better World" report, spoke to T.K. Rajalakshmi on
what he thinks are some of the concerns facing democracies in the
21st century. Excerpts:


What has globalisation-induced growth meant for democracies the world over?

It has obviously meant adopting essentially what we call the
Washington Consensus, which means a policy of economic
liberalisation, relying much more on markets; a reduced role for the
state and, more important, for organisations and institutions; the
liberalisation of social policy; and, in recent years, the
privatisation of pension and health schemes and so on. Even in
developing countries with relatively small schemes, they have been
privatised. One of the big consequences of liberalisation has been
greater inequality. We believe that the inequality that has emerged
is actually underestimated by conventional methods of measuring
income distribution. Many of the inequalities are in access to
resources, benefits and forms of protection. They have become much
more differentiated according to wealth and status and hence they
compound many of the income inequalities. Globalisation has meant
much more open systems, much more liberalised, much more
individualised economic relationships. All these have compelled
governments to make their economies more competitive; firms more
competitive and individuals more competitive. This, in turn, has
created a lot of pressure on people to be better than others, to
outwit one another, encourage short-term opportunistic activities and
has created a sort of frenzy of competitiveness.

The worst form of this stress is what they call in Japan Karoshi.
This is literally death from overwork. We have seen an increase in
the number of suicides, and an increase in strain among people trying
to compete more with one another. We can see stresses and illnesses
associated with that all over the world. Globalisation as a system
has fostered a structure of economic activities without the
safeguards of either traditional community support systems or the
structures giving people a lot of protection.

I don't want to go from that point to argue that we want to reverse
what we know as globalisation and go back to some old discredited
system. The challenge is that globalisation is a new transformation
in which the old systems of protection, regulation and redistribution
are no longer functioning. We have new insecurities and we have to
deal with them before they become so destabilising that they threaten
human communities and the viability of the development process.

Should the insecurities you mentioned be challenged within the
framework of globalisation, or should one look for alternative models
of development?

I think the picture in ten years from now is going to be very
different. We cannot predict, but the existing situation is
non-sustainable in the long-term. Every time the world has evolved
with new economic forces, governments have learnt that they would
have to have new systems of redistribution. What that will be, we do
not yet know. But clearly, inequalities of wealth and income are the
grotesque aspects of globalisation. The key resources in the world
are finance capital and the access to economic resources. Finance
capital must be regulated in some way so that more people can
gradually have a share in the income generated by it. This is one of
the big challenges for the world at the moment.

Unless it is shared, the dynamics of inequalities will erode, in the
eyes of ordinary people, the legitimacy of a system that produces
those outcomes. Protection reforms will have to be made very
different. We have to move away from labour-based entitlements to
citizen-based rights and that means strengthening the trend towards
universalisation of basic security and realising that for any society
to be stable and profitable, there has to be a sense of social
solidarity. That means that winners will have to share [their gains]
with the losers; otherwise the losers will get so angry and
frustrated that they will threaten everybody. Social protection
reforms are going to be one of the most exciting policy areas in the
next few years.

How is social protection different from social security measures? Are
we not talking about the same concept?

Not exactly. Social protection is different from social security and
social assistance schemes. Both these models are under strain in the
new liberalised economies and flexible labour markets. Most people
are unable to make contributions to insurance schemes and social
assistance doesn't work as means-testing does not reach the poor. The
tendency of many a developing country government is to place faith in
populist measures like micro-credit and micro-insurance schemes. But
this does not help deal with the worst forms of insecurity - those
associated with systemic risks. Increasingly, we are dealing with
systemic risks where whole communities are being hit by major crises;
a whole county is hit. This turns people chronically insecure. We
cannot rely on old style social insurance and social security
schemes. We need a rights-based system of income transfers and
universal schemes so that everybody can participate and benefit from

There seems to be an increasing realisation that globalisation has
not worked and has caused a lot of distress and governments do not
seem to be reversing their policies. Why is this so?

Let me be the devil's advocate here. I think some countries are
beginning to wake up to the need to move to a new model where basic
securities are being given more attention. We should be encouraged by
what the Lula government is doing in Brazil. It is trying to address
grotesque inequalities in the country. We are reaching a stage where
more and more governments are realising that adopting an
international set of blueprints is not appropriate and that they need
to exert more national autonomy over their policymaking and escape
from the conditionalities imposed on them.

Also, there is increasing doubt among the advocates of the old model
underlying globalisation as evidence is stacking up that it has not
been working. This is when they start changing their tune. And the
stake for autonomy in policymaking increases. One is seeing that.
International financial agencies are no longer preaching a minimalist
state. They are suddenly finding that institutions are more valuable.
And they are promoting institutions, while only a few years ago the
message was: minimise the state. A very different set of tunes is
being heard now.

I think we are still in the midst of a huge global debate about the
role of the state, civil society in new forms of state and
accountability of governments. It is important for all of us to be
looking at the innovative skills emerging all over the world that
seem to be offering change in some direction. There is definitely an
associational revolution taking place where people are feeling that
the only way to gain security and gain the space and control over
their lives is to participate in those organisations that represent
those spaces. The most important asset that we have globally is the
anger of the youth. Every change for the better has come up when the
youth has stood up and said that these inequities are not acceptable
and that we do not wish to go through lives seeing them get worse.
The anger must be channelled. It is a beginning - whether against war
or against the ecological destruction of the planet. Our only hope is
that young people will stand up and demand the change.

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