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WTO AND THE DEVELOPING NATIONS
Isn’t it time to practice what one preaches?
By SYED M. ASLAM
Oct 06 - 12, 2003
Has the WTO has really failed the developing nations. Has it aligned itself with the rich nations to undermine the interests of the poor nations. If the ending of the recent ministering meeting at Cancun is any indication WTO’s failure to force the rich to do away with their huge farm subsidies, which the organisation says is not mandated with, has only strengthened the resolve of the developing nations to forge a unity. It can not also enforce existing rules on dumping thus allowing the rich countries, the US in particular to flooding poor countries with agricultural products at half the cost of production, pushing local farmers out of their own markets. The group of G-22, formed just weeks before the latest Cancun round, lead by China has appeared as the united voice in the South to demand that their concerns should not only be heard but their interests should also be protected. That also explains the reason why South African Finance Minister, Trevor Manuel, called Cancun ‘not a failure’. "I don’t think Cancun was a failure for developing countries. I think that we were able to demonstrate very strongly that we are a force, that we represent the majority of the world’s people, and that there will be no agreement about us, without us."
The unified voice of dissent by the developing world seem also to be acknowledged by such international lending agencies as the World Bank and the International Monetary Fund, almost two-thirds votes of whom are controlled by the directors from the rich countries. This has been possible because the minority directors from the developing and poor countries have started to become more vocal as evident from the annual meetings of the WB and IMF in Dubai this week.
According to reports published in the media, the US and EU collectively give a huge $ 400 billion subsidies to their farmers. The US alone provides around $ 4 billion subsidies to its 25,000 cotton farms a year to keep the prices of the precious commodity suppressed in the global market by as much as 25 per cent. That explains the reason why four African cotton producing nations — Barkina Faso, Mali, Benin and Chad — submitted a proposal for the elimination of cotton subsidy and other support on the agenda at the Cancun. The proposal was supported by Pakistan, a major cotton producer itself, as well as Canada, Australia, Argentina, Cameroon, South Africa, Bangladesh, Senegal and India.
Just how important the abolishment, or at least slashing, of farm subsidies is to the poor cotton producers is evident from minister designate of Barkina Fas, Jean Baptiste Compaore’s statement. In an interview Compaore called ‘Cancun’ a ‘disappointment’ saying that the livelihood of 40 per cent of his country’s population dependents on cotton for livelihood. "And if cotton is threatened, then the very objectives that we are all trying to achieve are going to be jeopardised under the [UN] Millennium Goals."
He was alluding to goals set by the UN 13 years ago in 1990 that including cutting the number of world hungry by half and providing full primary schooling to all children by 2015. Threatening jobs by offering huge farm subsidies by the rich nations pose real threats to the developing countries can be understood well by the case argued by Compaore for his country.
Sugarcane farming and sugar industry is a relevant case for Pakistan. Sugarcane is the top fourth cash crop. It employs tens of thousands of persons. The low per acre yield, low sucrose content and over production, however, are some of the major problems of this industry in Pakistan. Despite over production locally produced sugar cannot be exported because of high production, costs way above the prices of the commodity in the international market which hardly crosses Rs 10 a kilogram. Even without subsidies to their farmers by the rich nations, Pakistani sugarcane farmers could not compete with their counterparts in the developed world which enjoy far superior per acre yield and much higher sucrose content. In addition, sugar production in the country exceeds its demand by almost twice and with prospects for exports this over production becomes a heavy liability when one understands that sugarcane is a highly water-intensive crop where water supply seriously short at times.
While the need for efficiency can hardly be over-emphasised, the fact remains that the demand for the abolishment of the farm subsidies by the rich, the developing is an attempt by the poor nations for survival. They are fighting for the cause of world’s poor farmers. The growing dissent among ranks and files has seem to catch the attention of the World Bank President James Wolfenson who had said, "I think that the issue is serious, and it’s one for our shareholders to decide in terms of voting."
A soothing statement indeed. However, if trends are any indication it looks more like an attempt to lessen the growing pressure for reforms for voting rights at the executive board of the Bank by the developing countries. The matter was to have been put on the agenda at the Bank’s meeting in April but was shelved at the last minute.
The failed ministerial meeting at Cancun has also made the Managing Director of the IMF, Horst Kohler, say at the latest meeting in Dubai that "the breakdown of the trade talks in Cancun must be a wake-up call for the international community... More than ever, success will depend on the leadership of the major industrial countries — and agriculture remains the key to unlocking decisive progress."
Isn’t it time to practice what one preaches?