16

SUSTAINABLE GLOBALIZATION? THE GLOBAL POLITICS OF DEVELOPMENT AND EXCLUSION IN THE NEW WORLD ORDER
ANTHONY McGREW

Figure 16.1 Mr Salamet, a rickshaw owner in a town east of Jakarta, has a hard life made more so by the Asian crisis.

In the autumn of 1997 the Tiger economies of East Asia succumbed to their worst economic crisis since the 1930s depression - likely to be remembered as the Second Great Crash of the twentieth century. Talk of the 'Pacific Century' and expectations of continued rising affluence gave way to the crushing realities of bankruptcy, financial turmoil, downsizing, unemployment and rising poverty as the crisis cascaded through the region. In the five decades since the end of the Second World War most peoples in the region had experienced rising living standards, on

a wave of unprecedented economic growth, but almost 'in the blink of an eye' poverty and unemployment returned to levels not witnessed in at least two generations. The human and social consequences of the crisis have been dire. For Mr Salamet (Figure 16.1), a rickshaw owner in Mojokerto (400 miles East of Jakarta), the Asian crisis meant the collapse of his livelihood, witnessing his mother's agonizing death because he was unable to afford the prescribed painkillers, and watching his children go hungry (Kristof & Wyatt, 1999). What went wrong?

POVERTY AND DEVELOPMENT INTO THE 21ST CENTURY

The causes of the East Asian crash are hotly disputed. But almost all accounts acknowledge that, notwithstanding the role of domestic factors, 'On balance, most causes for the Crash are to be found in the recent monetary and financial history of Asia faced with globalization' (Godement, 1999, p.21). In particular, as these countries became more integrated into the global economy they also became more vulnerable to world financial markets and the ebb and flow of investor confidence. Few countries today, even the largest economies, can withstand concerted speculative attacks on their currencies when trade on the world's foreign exchange markets, at $1.5 trillion per day, dwarfs national foreign exchange reserves. Moreover, the globalization of finance, production and trade ensures that a crisis in one economy is speedily transmitted to others. In East Asia this so-called 'contagion effect' amplified the crash. Economic difficulties in Thailand provoked foreign banks and investors, fearing bad times ahead, to withdraw their money from other economies, causing massive currency devaluations and stock markets to crash. In just a few months the fallout of the crash had also engulfed other emerging economies, such as South Africa, Russia, and Brazil, precipitating what the then US President Clinton noted was 'the most serious [global] financial crisis in half a century' (Kristof & Wyatt, 1999). In so doing the Asian crash provoked a great debate about the benefits of unfettered global markets, the regulation of global finance and the prospects for sustainable development in a globalized economy. For some commentators the crash signalled the end of the East Asian development experiment - the developmental state - which had appealed to many other developing states: in other words, the Asian tigers had been tamed by global finance. Moreover, contrary to many predictions of the 1980s - that the rise of East Asia signified the demise of the Third World as a geopolitical bloc in world politics - some argued that the crash would reinvigorate Third World solidarity since it reinforced the growing perception that globalization was simply a new expression of Western imperialism (Burbach et

al., 1997). In contrast, others argued that the very existence of a global contagion effect from the crash demonstrated just how fundamentally globalization had transformed the world - for the fortunes of core and periphery, in an epoch of instantaneous global finance, have become deeply entwined. Globalization invites a fundamental questioning of the prospects for developing economies and the world's poorest peoples in an era marked by powerful forces of world- wide economic, political and cultural interconnectedness, over which they have little direct political control. Indeed, contemporary patterns of globalization even throw 'into question the possibilities of a national development strategy5 (Dickson, 1997, p. 155). Exploring and critically assessing the implications of globalization for patterns of global inequality and the prospects for sustainable development is the central task of this chapter. This involves addressing a number of key issues but in particular: What exactly is globalization and what is driving it? Is it simply a new form ofWestern imperialism and global hegemony? To what extent does globalization create new winners and losers in the global economy? How far is it transforming the pattern of North-South relations and the conditions for sustainable national development? How have developing countries and the world's poorest peoples responded to globalization? Can globalization be tamed?

1 6. 1 What is globalization?
As the East Asian crash demonstrated, today developments in one region of the world can come to have profound consequences for the life chances of individuals or communities in distant parts of the globe. Globalization refers to this growing sense of interconnectedness. It also tends to be associated with a perception of powerlessness and chronic insecurity in that the speed and scale of contemporary global social

346

16 SUSTAINABLE GLOBALIZATION?

and economic change as in the East Asian crisis of 199798 appear to overwhelm governments, politicians and communities. The unevenness of globalization compounds such insecurities since it would appear that the strong are becoming stronger and the weak weaker as the benefits of globalization accrue to a relatively small proportion of the worlds population whilst global poverty and social exclusion continue to increase (Dickson, 1997; UNDP, 1997b). Not surprisingly, therefore, the notion of globalization is the subject of charged public and academic debate. But the rhetoric of controversy often conceals more than it reveals. Indeed, the very idea of globalization tends, if at all, to be ill defined in such debates. Yet globalization, as a concept, is deceptively simple: it refers to the ways in which developments in one region can rapidly come to have significant consequences for the security and well-being of communities in quite distant regions of the globe. As Alan Greenspan, head of the US Federal Reserve at the height of the East Asian crisis, succinctly put it: there can be no islands of prosperity in an ocean of economic instability. In this sense globalization expresses the widening scope, deepening impact and speeding up of interregional flows and networks of interaction within all realms of social activity from the cultural to the criminal (Box 16.1). Of course globalization involves much more than simply interconnectedness or a shrinking world, for it captures a sense that world-wide connectivity is very much a permanent or institutionalized feature of modern existence. In this regard it signifies the deepening enmeshment of societies in a web of world-wide flows of capital, goods, migrants, ideas, images, weapons, criminal activity and pollution, amongst other things. Neither is it simply an economic phenomenon. On the contrary, it is evident in all the key arenas of modern life: the economic, political, legal, cultural, military, and the ecological. Accordingly, it has to be understood as a highly differentiated process in so far as distinctive patterns of globalization exist in each of these arenas. Nor, as Frank reminds us, is globaliz-

Box 16.1 The four dimensions of globalization Globalization is characterized by four types of change. 1 It involves a stretching of social, political and economic activities across political frontiers, regions and continents. 2 It suggests the intensification, or the growing magnitude, of interconnectedness, i.e. flows of trade, investment, finance, migration, culture, etc. 3 The growing extensity and intensity of global interconnectedness can be linked to a speeding up of global interactions and processes, as the evolution of world-wide systems of transport and communication increases the velocity of the diffusion of ideas, goods, information, capital and people. 4 The growing extensity, intensity and velocity of global interactions is associated with their deepening impact such that the effects of distant events can be highly significant elsewhere and even the most local developments may come to have enormous global consequences. In this sense, the boundaries between domestic matters and global affairs become increasingly blurred.

ation a new phenomenon, for we live in one world, and have done so for a long time (Frank, 1998, p.29). But over time globalization has been organized and institutionalized in quite different ways, from the global empires of the nineteenth century to the present when world empires have given way to the freedoms of the global market, laissez-faire economics, and multinational capital. In this sense contemporary globalization is organized and reproduced through distinctive mechanisms and infrastructures of control, from the International Monetary Fund (IMF), the World Trade Organization (WTO), to the Internet, global corporations and non-government organizations.

347

POVERTY AND DEVELOPMENT INTO THE 21ST CENTURY

To this extent contemporary globalization generates constraints upon what governments and communities can do whilst simultaneously opening up new opportunities and possibilities. But some are more constrained than others and some have greater resources than others to exploit these opportunities since globalization is a highly uneven process: it results in clear winners and losers, not just between countries but within and across them. For the most affluent it may very well entail a shrinking world jet travel, global TV and the World Wide Web but for the majority of people it tends to be associated with a profound sense of disempowerment as their fate is sealed by deliberations and decision-making in chancelleries, boardrooms, and bureaucracies many thousands of miles away. As the East Asian crisis of 199798 demonstrated, key sites of global power, such as the International Monetary Fund and the World Bank, are quite literally oceans apart from the communities whose destiny they shape. To this extent globalization nurtures a sense of alienation that Power is elsewhere, untouchable (Walker, 1988, p.134; Box 16.2). Globalization: A process (or set of processes) which embodies a transformation in the spatial organization of social relations and transactions assessed in terms of their extensity, intensity, velocity and impact generating transcontinental or interregional flows and networks of activity, interaction, and the exercise of power.

Box 16.2 Whats driving globalization? Globalization today is driven by a confluence of forces: 1 Economic shifts. The natural tendency of capitalism to expand is expressed increasingly in the information age in the need of business, large and small, to compete in regional and global markets. 2 Technological shifts. The move towards post-industrial economies and the informatics revolution greatly facilitates globalization in every domain from the economic to the criminal. 3 Political shifts. The last two decades have witnessed a dramatic shift away from state intervention to the market as the emphasis upon deregulation, privatization and economic liberalization continue to make economies and societies more open to the world. 4 Cultural shifts. Fuelled by the above developments, an awareness has grown among national lites and many citizens groups or social movements (such as the global environmental movement represented by, for example, Greenpeace) that the fate of nations and communities is increasingly bound up with the dynamics of the global economy and the global environment.

For these reasons globalization has to be understood as a process which both unites and divides peoples and communities; it does not automatically follow that humanity is becoming a single global community of fate. Indeed, there is much evidence to suggest that its consequences are much less benign. Conceived as a process of creative destruction, globalization arguably engenders a more unruly world and a more unequal one (UNDP, 1997b; Herod et al., 1998). But the consequences of globalization remain hotly disputed.

16.2 Globalization, inequality and world order

There are broadly, within the existing literature, three distinct accounts of how globalization conditions patterns of global inequality and world order. The neoliberal school tends to view economic globalization as a benign force for change which, through free trade and capital mobility, is creating a global market civilization in which prosperity, wealth, power and liberal democracy are being diffused around the globe. In the process a new liberal world order is being

348

16

SUSTAINABLE GLOBALIZATION?

constructed in which peace and an enduring harmony of interests will win out in the long term. In contrast, the radical school tends to conceive these very same developments as nothing more than an expression of Western - largely American - imperialism in which corporate empires and global markets have come to replace the world empires of the industrial era. Rather than prefiguring peace and an emerging harmony of interests, the radical account suggests the world is becoming ever more fragmented and unruly as the gap between the increasingly affluent North and increasingly impoverished South escalates. Finally, the transformationalist school suggests both these accounts overlook the ways in which contemporary globalization is reordering the relations between rich and poor, North and South, dominant and subordinate states in the global system. As a consequence neither of the other schools offers a convincing analysis of the changing architecture of world order and thereby the changing context of development in the twenty-first century. Let us explore these three accounts a little more fully. A summary is given in Table 16.2 at the end of the section.
The neoliberal analysis

national networks of production, trade and finance, governments have to adopt more market-friendly policies to attract much needed foreign capital. In this 'borderless' global economy governments are relegated to little more than transmission belts for global capitalism or catalysts for nurturing the competitive advantages of their national economies. This vision of a 'global market civilization' has been reinforced by the policies of the major institutions ofglobal economic governance, namely the IMF, World Bank and the G7 - at least up to the mid 1990s. Underlying their structural adjustment programmes has been a neoliberal development strategy - referred to as the Washington consensus - which prioritizes the opening up of national economies to global market forces and the requirement for limited government intervention in the management of the economy. The combination of structural adjustment programmes and the discipline of global market forces effectively constrains the development strategies which states may pursue. In this regard globalization significantly erodes the sovereignty and autonomy of states. National governments, in this view, are thus fast becoming 'a transitional mode of organization for managing economic affairs' (Ohmae, 1995). Within this analysis there is a recognition that the dynamics of global market forces generates losers as well as winners. Nevertheless, in general, the analysis points to the growing diffusion of wealth and affluence in the world economy - the trickle-down effect. By historical standards global poverty, it is argued, has fallen more in the last 50 years than in the past 500, and the welfare of people in almost all regions has improved significantly over the last few decades. Rather than the old North-South fracture, a new world-wide division of labour is said to be replacing the traditional core-periphery model of global economic relations. As a result, what was called the 'third world' is becoming increasingly differentiated: embracing newly industrialized, emerging, least developed and 'fourth world' economies. South Korea is now a member of the OECD, the Western club of 'rich'

For neoliberals, contemporary globalization defines a new epoch in human history in which market capitalism, following the collapse of state socialism in Eastern Europe and the Soviet Union, has triumphed across the globe such that there is no longer a viable alternative development path. This is a conception of globalization which reflects an economic interpretation and celebrates the emergence of a single global market and the principles of free trade, capital mobility, and global competition as the harbingers of modernization and development. Pointing to the East Asian economic miracle and the Latin American experience of the 1990s, the neoliberals emphasize that successful development issues from openness to global capital and competitive forces and closer integration within the global economy. For as globalization brings about a progressive denationalization of economies, through the establishment of trans-

349

16

SUSTAINABLE GLOBALIZATION?

immiseration ofthe poorest peoples in the world who bear the brunt, as the East Asian crash highlighted, of the 'boom and bust' logic of modern global capitalism. This 'new world order' is an 'unruly' one as poverty increases, the conflict between North and South deepens, and the affluent West, through various mechanisms from NATO to the World Bank, resorts to a kind of 'global riot control' to consolidate its power and secure its economic fortunes. Contemporary globalization, in the radical view, is thus implicated in the intensification of global poverty, deprivation, conflict and violence: in effect the consolidation, rather than the demise, of the Third World.
The transformationalist analysis

Rejecting both the proposition that contemporary globalization is simply a new Western imperialism and that it is a path to a single global market civilization, the transformationalist argument emphasizes its historically unique characteristics. In particular, transformationalists point to the unprecedented intensity and geographical embrace of contemporary processes of globalization, not just in the economic domain but within all aspects of social life from the cultural, security, and environmental, to the criminal, legal, and political. As Nierop puts it, 'Virtually all countries in the world, if not all parts of their territory and all segments of their society, are now functionally part of that larger [global] system in one or more respects' (Nierop, 1994, p. 171). Yet it is also recognized that globalization is highly uneven in its embrace and its effects. Contemporary globalization, in this analysis, is associated with a shift in the configuration of global power relations; that is, more complex and dynamic patterns of global hierarchy and stratification. Developing countries now account for a significant proportion of global exports, and through integration into transnational production networks have become extensions of, as well as competitors to, business in metropolitan economies. The role of'maquiladores' - offshore production plants - in boosting Mexico's exports to the US is a case in point. The old North-South

hierarchy is arguably giving way to a new global division oflabour in which the 'familiar pyramid ofthe core-periphery hierarchy is no longer a geographic but a social division of the world economy' (Hoogvelt, 1997). To talk ofNorth and South, or First World and Third World, is to overlook the ways in which globalization is transforming old hierarchies by forging new patterns of inclusion and exclusion which cut into and reach across all the countries and regions of the world. This is not to deny that the world remains highly unequal. On the contrary, it acknowledges that instead of core-periphery, a more accurate analogy for this globalizing world might be a nested arrangement of four concentric circles - each cutting across all regions and societies - and constituted by the world's elites, the affluent middle-class, the marginalized and the dispossessed respectively (Hoogvelt, 1997). North and South, First World/Third World are no longer 'out there' but nestled together 'right here' in all the world's urban areas. While inequalities of power and differential access to resources between states and societies remain considerable, they no longer mirror (not that they ever did) a crude North-South geopolitical division of the world. Such a crude division conceals the reality of very significant regional concentrations of wealth and military power in the 'South' alongside the enormous growth of poverty and social exclusion in the 'North'. Moreover, as the financial contagion effects of the East Asian crash showed, under conditions ofcontemporary globalization, economic prosperity in the North cannot be insulated from the consequences of national economic policy choices on the so-called periphery. Accordingly, globalization has transformed the context of national development in two ways. Firstly, in an interconnected world order, development is no longer just a third world matter but has become 'increasingly applicable to other parts of the world.. .The question of development is thus a shared one' (Dickson, 1997, p.154). Secondly, there is no longer a clear separation between domestic and international matters, so that governments have had to rethink how best to achieve national goals in an interconnected

POVERTY AND DEVELOPMENT INTO THE 21ST CENTURY

world. In response, a new development consensus is emerging - often referred to as the postWashington or Geneva consensus - which recognizes development as a shared global challenge and responsibility amongst states and societies, North or South, industrializing as well as post-industrial. Whether globalization is creating the political preconditions for a 'global New Deal' between rich and poor in the world economy remains to be seen. For the recognition of a shared fate does not necessarily lead to enhanced global solidarity or co-operation; on the contrary, it may engender greater competition, rivalry and conflict between states and peoples. Moreover, to the extent that globalization enmeshes states North and South - in a plethora of transnational networks and systems, from the financial to the ecological, which are beyond their immediate control, it may make it more difficult for them to achieve their domestic and development policy objectives. The growth ofcross-border problems too, combined with the expanding jurisdiction of institutions of global and regional governance, further alters the context of domestic governance and politics for rich and poor states alike, although in quite different ways. This does not mean that states are becoming less important or less powerful. On the contrary, their roles and functions are changing as they seek coherent strategies for engaging with a globalizing world and an emerging framework of multi-layered governance, in which governments share the political stage with a host of other public and private agencies, domestic and transnational, from Greenpeace and the World Development Movement to General Motors and the World Health Organization (Table 16.1). As such, over the coming decades, 'we can expect to see more and more of a different kind of state taking shape in the world arena, one that is reconstituting its power at the centre of alliances formed either within or outside the nation-state' (Weiss, 1998). In this respect globalization is held to be transforming state power and with it the global context of development.

Table 16.1 1994

State and corporate power,

Total GDP or corporate sales (US$ billions)

Country or corporation

Indonesia General Motors Turkey Denmark Ford South Africa Toyota Exxon Royal Dutch/Shell Norway Poland Portugal
IBM

174.6 168.8 149.8 146.1 137.1 123.3

m.j
110.0
109.8

Malaysia Venezuela Pakistan Unilever Nestle Sony

Egypt
Nigeria
Top five corporations Least developed countries South Asia Sub-Saharan Africa

109.6 92.8 91.6 72.0 68.5 59.0 57.1 49.7 47.8 47.6 43.9 30.4
87?. 4 76.6 451.3 246.8

Source: UNDP (1997) Human Development Report 1997, Oxford University Press, Oxford, p.92.

16

SUSTAINABLE GLOBALIZATION?

Table 16.2 Globalization and development: summary of three accounts

Neoliberal What's new? Power of national governments Driving forces of globalization North-South relations A global market civilization Declining both North and South Capitalism and technology Erosion of North-South differences Spreading affluence Radical The empire strikes back Expanding (North) and declining (South) G7 states and transnational capital Increasing immiseration and marginalization of the Third World Erosion of global and national solidarity Transformationalist Development as a shared concern Reconfiguration of state power North and South Modernity New patterns of inclusion and exclusion; erosion of North-South hierarchy New forms of transnational solidarity

Prospects for global solidarity

16.3 One world of development or many?

Each of the above analyses of globalization (summarized in Table 16.2) expresses distinctive positions on several contentious issues: 1 whether the very idea of the Third World as a geopolitical or analytical category 'has become an anachronism' (Stallings, 1995, p.349); 2 the capacity of governments to realize sustainable national development strategies in a globalizing world; and 3 the architecture of the 'new world order' and its implications for the global politics of development. This section will explore these issues further, reflecting upon which, if any, of the above analyses offers a convincing account of the global context of development today.
The 'end of the Third World' and the globalization of poverty

old North-South hierarchy in world politics. Except for the most ardent champions of neoliberal economics, people rarely take the phrase to refer to the ending of global poverty. Indeed, whilst the relationship between globalization and world poverty is enormously complicated, there is general acknowledgement that globalization is strongly associated with an intensification of global inequality (Bradshaw & Wallace, 1996; Castells, 1996; Dickson, 1997; Hoogvelt, 1997; UNDP, 1997b; Birdsall, 1998). The evidence also indicates that growing poverty is no longer confined to the South (the 'third world'), but is on the rise in the affluent North. Globalization is generating new patterns of inclusion and exclusion in the global political economy which transcend the North-South divide but which nevertheless result in widening disparities in life chances across the globe. Paradoxically, contemporary patterns of globalization are associated both with a more affluent world and with growing global inequality. Although in the last fifty years poverty has declined 'more than in the previous 500', that decline has been highly uneven (UNDP, 1997b, p.2). Three related global patterns are evident: the growing polarization between the richest and poorest in the world economy; the segmentation of the global workforce into the winners

The phrase 'the end of the Third World' is used in several quite different ways. It may refer to the growing differentiation between the economic fortunes of countries in the South, or to the demise of a coherent geopolitical coalition of developing states, or to the reordering of the

POVERTY AND DEVELOPMENT INTO THE 21ST CENTURY

and losers from economic globalization and the growing marginalization of the losers from the benefits of development (Castells, 1998). As the UNDP Human Development Report states, all the key indices of human development 'have advanced strongly in the past few decades' and these 'advances are found in all regions of the world' (UNDP, 1997b, pp.2-3). However, at the same time the ratio of the incomes of the world's poorest peoples to the richest has more than doubled from 30:1 in 1960 to a staggering 78:1 by the mid 1990s (ibid., p.9). Furthermore, the richest 20% of the world's people have seen their share ofworld income increase from 70% in 1960 to 85% in 1996 whilst the poorest 20% have had to get by on a dwindling proportion of world income down from 2.3 % in 1960 to 1.4% in 1996 (Castells, 1998, p.81). Whilst the polarization between rich and poor in the global economy is intensifying, there is also evidence to suggest that those countries largely by-passed by globalization are amongst the poorest (Birdsall, 1998). In this respect globalization is reordering developing countries into clear winners and losers such that it operates to the advantage of the 'more dynamic and powerful countries in the North and the South' (UNDP, 1997b, p.87). This pattern of exclusion is also replicated within countries, both North and South, as communities and locales closely integrated into global production networks and markets reap significant rewards while others survive on the margins. Accordingly, within OECD economies, inequality, unemployment and social exclusion have increased as many lowskilled and semi-skilled jobs have been relocated to more profitable ventures in developing countries (Rodrik, 1997; Castells, 1998). Thus globalization brings with it a horizontal segmentation of the workforce, within rich and poor countries alike, into winners and losers from global capitalism. As Castells observes: "Globalization proceeds selectively, including and excluding segments of economies and societies in and out of the networks of information, wealth, and power that characterize the new dominant system."
(Castells, 1998, p. 162)

One consequence of this segmentation is that some economies, locales, communities, and social groups have become increasingly marginalized from the dynamics of the global economy. Even though few countries remain largely outside global networks of trade, investment and governance, the unevenness of contemporary globalization effectively excludes some territories and communities regardless of their geographical location. Paradoxically, there may be little worse than being exploited apart from not being exploited at all. For even the fate of those disenfranchized from globalization is nevertheless ultimately bound up with its dynamics. Globalization is beginning to transform the old North-South hierarchy as it creates new patterns of domination and subordination, inclusion and exclusion, between and across the world's major regions and economic spaces (Figure 16.3). Rather than a single core, the contemporary world order is dominated by multiple centres - North America, Western Europe and East Asia - each embodying different forms of capitalism and each associated with subordinate economies. But globalization creates new patterns of inclusion and exclusion which transcend this geographic division of global economic space, erecting the foundations of new global social structure. As Hoogvelt concludes, "Globalization has rearranged the architecture ofworld order. Economic, social and power relations have been recast to resemble not a pyramid but a three-tier structure of concentric circles. All three circles cut across national and regional boundaries. In the core circle we find the elites of all continents...They are encircled by a fluid, larger social layer who labour in insecure forms of employment, thrown into cut-throat competition in the global market...The third, and largest, concentric circle comprises those who are already effectively excluded from the global system."
(Hoogvelt, 1997, pp.239-40)

354

16

SUSTAINABLE GLOBALIZATION?

of development into a matter 'which impacts on all societies' such that it is increasingly a shared global concern (Dickson, 1997, p. 162). In so doing it is also reconfiguring both the agenda and the politics of development.
From 'Tiersmondisme' to the global politics of sustainable development

From the 1960s through the late 1970s the NonAligned Movement and the Group of 77 (G77; now a grouping of over 120 developing states) nurtured a remarkable political solidarity amongst newly independent and subordinate states within the United Nations system (Box 16.3). This solidarity reflected a strong collective identity emerging out of a set of common development problems and reactions against a
Box 16.3 The non-aligned movement and the Group of 77 The non-aligned movement (NAM) was formed in 1955 in the early period of the Cold War between the USA and the Soviet Union. The Bandung Conference brought together many newly independent states and those wishing to stay outside the EastWest conflict. Until the end ofthe Cold War the NAM met regularly and acted as a voice and pressure group for the subordinate states in the world order, most especially in the Third World. Following the end of the Cold War the NAM has become less politically significant although it remains an important voice for a global New Deal between rich and poor as well as an expression ofglobal solidarity amongst developing states. The Group of 77 (G77) came into existence in 1964 at the inaugural meeting of the UN Conference on Trade and Development (UNCTAD). Initially composed of 71 states it has since grown to a membership of over 120. The G77 acts an important caucus within the UN for promoting the interests of developing states across the entire agenda of global issues. It remains a significant force within UN politics and an important expression of global solidarity amongst the world's poorer states.

Figure 16.3 New patterns of inclusion. In a remote part of northern Kenya, a Samburu warrior makes a call on his mobile telephone.

In this respect, the term 'third world', understood as a geopolitical category, is somewhat misleading. What separates rich and poor in the global economy no longer translates into a simple geopolitical fault line in world politics between North and South, First World and Third World. However, the original meaning of the term 'third world', rooted in the notion of the 'Third Estate' - the dispossessed - current during the French Revolution, remains decidedly apt as an accurate label for all those communities (across all regions) marginalized and disenfranchized by the forces of economic globalization. To talk of the 'end of the Third World' in this latter sense is thus somewhat premature. Today the globalization of poverty, amongst other factors, transforms the question

POVERTY AND DEVELOPMENT INTO THE 21ST CENTURY

world order dominated by the Great Contest between capitalism and state socialism: the USA and the Soviet Union respectively. Using its political muscle as a voting majority within the UN, the G77 sought successfully to make development and the eradication of global inequality a key priority of the UN and its specialized agencies, such as the World Health Organization, UNICEF, and the International Labour Organization (ILO) amongst others. This issued from a singular political strategy, often referred to as 'Tiersmondisme'(or Thirdworldism), which sought to contest and overturn the terms of economic engagement between North and South. At its zenith Tiersmondisme' realized some significant achievements, from the creation of UNCTAD, a key forum within which deliberations on North-South issues and negotiated reforms could be progressed, to an agreed system of generalized trade preferences to provide developing economies with preferential access to Western markets. These initial successes also fuelled the demands for a more radical restructuring of North-South relations. In 1974, exploiting the potential vulnerability of the industrialized economies to the new-found commodity power so dramatically deployed by OPEC in its quadrupling of the price of oil in 1973, the G77 and NAM proposed a radical agenda for change. Agreed at the Sixth Special Session of the UN General Assembly in 1974, the Declaration on the Establishment of a New International Economic Order (NIEO) called for fundamental changes to the governance and rules of the global economic order to prioritize social justice over global market forces. There followed a period ofintensifying diplomatic confrontation between North and South. But no significant advance was made in fundamentally altering the terms of economic engagement between the developed and developing world. As Halliday observes, 'The campaign for a NIEO...achieved none of its stated goals and was, by the early 1980s...in practice as dead as the League of Nations' (Halliday, 1989, p.21). Since then 'Tiersmondisme', faced with accelerating global-

ization and growing diversity within the G77 and NAM, has been in full retreat. In part the failure of 'Tiersmondisme' was also significantly due to the major G7 countries, most especially the United States, refusing to implement a number of agreed reforms, and their growing preference for bilateral or regional dialogues - as opposed to the multilateralism of UN fora in which they were in a permanent minority. But, by the 1990s, the G7's desire to make progress with global trade liberalization, and the dismantling of barriers to global capital, gave renewed impetus to multilateralism as the primary vehicle for rule-making and governance of a rapidly globalizing world economy. At the same time, accelerating globalization and the impact of structural adjustment programmes had intensified the enmeshment of most developing countries within global economic networks such that the ideology of delinking and import substitution growth, so dominant during the campaign for a NIEO, came to lack political credibility. In particular, for those industrializing economies increasingly reliant on trade the fear of losing an effective voice in the Uruguay round of trade negotiations - which sought to establish new rules and arrangements for governing global trade matters in the form of the World Trade Organization - encouraged a reluctant return to multilateralism. Underlying this shift was a perception, amongst both the G7 and many developing states, that globalization was altering the terms of engagement between rich and poor states in the global economy. By the early 1990s there was growing recognition that the globalization of trade, finance and production had significant consequences for economies in both North and South. With the increasing mobility of capital, a new global division of labour began to emerge as manufacturing production in Europe, Japan and the US moved offshore. By the late 1990s, according to ILO estimates, almost 50% of manufacturing jobs were located in developing economies whilst over 60% of developing country exports to the industrialized world were manufactured goods,

16

SUSTAINABLE GLOBALIZATION?

a twelvefold increase in less than four decades (UNDP, 1998b, p. 17). For the G7 governments, globalization brought not only increased competition between their own economies but also increased competition from newly industrializing economies in Asia and Latin America. The intensification of global trade and the expanding reach of global production networks links the fate of workers and economies North and South more closely together. Similarly, the globalization of finance, as the 1997 East Asian crisis so graphically demonstrated, brings with it a sense of shared fates since loan defaults or currency speculation on the periphery can so readily trigger financial instability and turmoil across the globe. This is not to ignore the very different degrees of vulnerability between rich and poor states to these developments or their differential capacities to deflect or manage them. Nevertheless this reconfiguration of the terms of North-South economic engagement has begun to transform the politics of development. Reinforcing this reconfiguration is a broadening agenda of global issues which cut across traditional North-South constituencies. As Ravenhill asserts, 'The changing global agenda...offers a growing number of issues on which there are mutual interests between North and South and on which the co-operation of the Southern countries will be necessary if the industrialized countries are to attain their goals' (Ravenhill, 1990). Many environmental issues, from global warming to the trade in hazardous waste, have generated a 'new power dynamics between developed and developing countries' (Miller, 1998, p. 175). In so far as collective action, or adherence to common rules, is required for effective policy responses to such problems, developing states have acquired 'the potential to deny the industrialized countries their environmental objectives' (ibid., p.177). The global ban on exports of hazardous waste from North to South and the Global Environmental Facility are indicative of 'hard-fought victories for Third World states' (ibid., p. 187).

On a range of issues, from the proliferation of weapons of mass destruction, humanitarian emergencies, money laundering, labour standards, genetic engineering, agricultural subsidies and debt issues, to the reform of the international financial architecture, the old NorthSouth hierarchy is giving way to a more complex configuration of interests and power in the determination of global policy outcomes. On agricultural trade matters, for instance, many poorer states have found themselves allied to the US in WTO deliberations in pressing the EU to reduce barriers to 'free trade' on agricultural products. Moreover, where issues cut across different institutional jurisdictions, as with trade (WTO) and labour standards (ILO), the complexities ofglobal rule-making multiply. In these circumstances those with the most power on one issue may find themselves forced to compromise because of the need to make trade-offs on other issues in a different arena. Under conditions of contemporaryglobalizationeffective globalgovernance and compliance with global rules 'requires the co-operation of the so-called 'havenots'. This cannot be achieved through the hierarchical arrangements of old' (Woods, 1999, p.21). Furthermore, as the decisions of both public and private global agencies, such as the WTO or Standard and Poor (the international credit rating agency), touch more directly upon the welfare, values or interests of peoples around the globe this has triggered a corresponding globalization of political activity. Whilst governments and intergovernmental bodies, from WHO to UNEP, may be the primary locus of political authority in the world order they are not necessarily the most powerful or the sole participants in global rule-making. On the contrary they share the global political arena with a plethora of private associations constituting an emerging transnational civil society, embracing amongst others citizen groups, corporations, trade unions, employers organizations, professional organizations, industrial organizations, social movements, NGOs and international pressure groups of all kinds. As the scope and

357

POVERTY AND DEVELOPMENT INTO THE 21ST CENTURY

scale of global governance has expanded over the last five decades so too has the growth of transnational civil society; a global politics has emerged (Figure 16.4).

500

INGOs

5000

o o 400 o
4000 5'

D>

300

3000 9

200

2000

c3
' states
100

1000 o'

1900

1920

1940

1960

1980

2000

Figure 16.4 The growth of states, intergovernmental organizations and international non-governmental organizations in the twentieth century.

ers agreed to a new debt write-off plan, largely in response to the Jubilee 2000 campaign. Pressure from transnational civil society has also led in recent years to a 'greening' of international development agencies and policies. But even on issues which appear to invite serious North-South confrontation, such as the legislation of minimal international labour standards, political activity transcends the 'developed versus developing" divide. Governments, unions, development organizations, employers associations, business, environmental organizations, and human rights groups from both North and South, along with several international agencies such as the ILO, have been pressing within and outside the WTO for a social clause in trade agreements to restrict practices such as child labour, whilst an opposing coalition of governments, unions, consumer associations, business associations, and development agencies from both North and South, together with international bodies such as the World Bank, have sought to prevent the adoption of any such social clauses in international trade or equivalent agreements. Although globalization has created the infrastructure of a less state-centric and a more fluid or pluralistic form of global politics, which transcends a North-South division of the globe, it is nevertheless a form of politics still beset by significant disparities in power, influence and access to resources. In this respect the rich and powerful, whether in the North or the South, have much greater potential to set global agendas and influence the terms of globalization than do the poor and the excluded. Nevertheless the infrastructure of global politics creates a political space in which a 'globalization from below* can seek to contest global agendas and to bring to account the citadels of power. Just as globalization is transforming the terms of North-South engagement, making redundant the strategy of'Tiersmondisme', so it has established the infrastructure for a global politics of development in which the struggle for justice and the democratization of world order is joined by states and peoples from across the world's major regions.

Today, development issues and struggles over the terms of globalization are matters of global politics. On a raft of issues, governments and international institutions can be seen to be reacting to the pressures emanating from transnational civil society. On the question of the highly indebted poor countries, NGOs and churches, from both the North and South, established the Jubilee 2000 campaign to lobby G7 governments, the EU and the major international financial institutions to write off such debt. Mobilizing political pressure on G7 governments, building coalitions between development agencies and garnering the diplomatic support of the major G77 nations ensured the issue was kept at the forefront of key deliberations on the reform of international finance throughout the late 1990s. At the G7 Cologne summit in June 1999 the major economic play-

16

SUSTAINABLE GLOBALIZATION?

The end of the developmental state?

In the wake of the East Asian crash, the adjustment policies adopted by many governments and corporations in the region, from Japan to South Korea, have involved significant changes to the Asian model of capitalism (Godement, 1999; Mallett, 1999). In Japan 'risutoru' (corporate restructuring) and 'gaiatsu' (international pressure) have become almost everyday terms. Such changes have emphasized more market-friendly policies and a more limited role for government in the management of the domestic economy. This, for many neoliberals, represents an important 'victory for free market capitalism since, until the crash, the bigger East Asian economies demonstrated that it was possible, in a globalizing economy, to achieve rapid economic growth through strong state direction of the economy while simultaneously maintaining social cohesion and equity. The developmental state model represented a distinctive brand of capitalism which differed in significant ways from its European and American counterparts. Whilst it would be rash to write the obituary of the Asian model it is nevertheless clear that the regional crash has precipitated its transformation. Globalization therefore has significant consequences for how economies are governed and the capacity of states - their sovereignty and autonomy - to shape their own destiny. Amongst subordinate states, the constraints of world order, whether in the age of empires or the Cold War era, have always figured large in the determination of national policy. Moreover, whilst many of the poorest states in the world have all the constitutional and legal attributes of statehood, a significant number lack the vital capacities and resources to act as such, being in Jackson's words 'quasi-states' (Jackson, 1990). In a number of regions, amongst them sub-Saharan Africa, globalization has not so much emasculated the state but bypassed it since only weak state structures exist. But for the majority of developing and developed states alike the intensification of globalization in recent decades poses a distinct challenge to their capacity for self-governance,although, of course, their resources to meet that challenge vary con-

siderably. It is not that global financial markets or institutions dictate the specific policies of governments but rather that they configure the agenda or the parameters within which national strategic choices are made. For many states 'the real choice.. .is not how best to fight globalization but how best to manage it' (Haass & Liton, 1998). Governments in developing economies, such as that ofMalaysia, which have sought to pursue policies contrary to the orthodox prescriptions of key international agencies, such as the World Bank and IMF, have had to revise their economic strategies in case much needed flows of foreign capital dry up and production is shifted elsewhere. As Grugel observes of Latin America, 'the options appear to governing elites to have shrunk to either successful liberalization or unsuccessful liberalization; any search for alternatives has disappeared from domestic agendas' (Grugel, 1991). But even G7 governments, nominally the architects of globalization, often find themselves its Victims'. As Rodrik concludes in his study of G7 nations and globalization, 'The point that government policies lose their effectiveness in highly open economies should not be controversial' (Rodrik, 1997). This is not to argue, as do many hyperglobalizers, that globalization spells the end of the nation-state or effective national economic policies. The myth ofthe powerless state, emasculated by global forces, is popular but ultimately both misleading and dangerous (Weiss, 1998). Misleading because it ignores the limits to globalization; and dangerous because it fuels xenophobia and a futile search for autarky which, as the 1930s demonstrated, tends to invite conflict and even war. Far from globalization leading to 'the end of the state', it is stimulating a range of strategic political responses and, in some fundamental respects, a more activist state. In this context, it makes more sense to speak about the transformation of state power. Together with the conclusions of the two preceding subsections, this suggests that the transformationalist analysis, discussed above, may well provide a better purchase on the changing global context of development than either neoliberalism or radicalism.

359

POVERTY AND DEVELOPMENT INTO THE 21ST CENTURY

This becomes even more evident in considering how developing states have responded to the dynamics of contemporary globalization.

16.4 Sustainable development in a globalizing era

With the failure of 'Tiersmondisme', and the changing context of national development, governments and citizens in developing states are rethinking development strategies in relation to how they engage with a globalizing world. This has produced three distinct but (largely) mutually reinforcing strategic responses: regulation, regionalism and resistance. These will be examined briefly in turn.
Regulating globalization

Whereas the campaign for the NIEO sought to rewrite the rules of world order, today the struggle is largely over the terms of globalization, especially in relation to the form and content of globalregulation (Woods, 1999). Amongstdeveloping countries there has been a determined effort to exploit the rules of the system in order to advance development goals. This has been combined with collective attempts to achieve reforms to both the institutions and the rules of global economic governance. In respect of the former, the WTO is increasingly being used by developing countries and those interests damaged by free trade to ensure that industrialized countries abide by multilateral trade rules. One of the more recent high profile cases, significant for its broader political implications, was the WTO's striking down of US legal prohibitions on shrimp imports from a number of Asian countries whose industries failed to comply with the requirements of the US Endangered Species Act - a law which sought to protect dolphins, often the victims of indiscriminate shrimp fishing (WTO, 1998). Governments in the emerging economies of Asia and Latin America are increasingly resorting to the WTO trade dispute settlement mechanisms in their conflicts with the EU and the US, since in a rule-based system might has less chance of

trumping right. Of course these mechanisms do not seek to replace free trade with fair trade but they do provide weaker states with an instrument through which to ensure the compliance of more powerful states with the rules of the game. By contrast, the WTO is also used by the more powerful to annul some of the traditional protection that the poorest states have received. In 1999 the WTO forced the EU to abandon its system of preferences for Caribbean banana producers, following the 'banana war' between the US and the EU. Besides 'working through the system' there is growing collective political pressure from G77 governments for reforms to both the rules and the institutions of global economic governance. Following the East Asian crash in 1997, reforms to the rules and architecture of global finance became a major topic of deliberation within the IMF, World Bank, and other multilateral fora. On this occasion the global financial instability resulting from the Asian crash crystallized a growing international consensus, from the G7 to the G77, that reform was essential, although there was much less agreement about what could or should be done to alleviate the systemic risks inherent in a world of instantaneous capital mobility. Some significant reforms were agreed in mid 1999 but these fell far short of the demands of many industrializing states such as Malaysia, or unions in G7 states, for global controls on destabilizing short-term capital flows, i.e. hot money. Alongside reforming the rules of the global economy there is also an on-going debate about representation in the institutions of global economic governance. There are growing demands to give emerging and developing states greater representation in key decision-making bodies. In the case of the IMF there have been moves to widen consultation and participation in rulemaking beyond the G7 to embrace the more representative G22 - a formal grouping which includes the major developing states from each world region. The NAM have also recently formed the G15 of leading developing states which seeks to establish a role as a kind of'poor man's G7' at the global level (Sindharan, 1998).

360

16

SUSTAINABLE GLOBALIZATION?

But it is not simply wider governmental representation that is at issue, for the World Bank and the WTO are also under pressure from NGOs to adopt institutional reforms to make them more accountable to peoples, not just states (McGrew, 1999). These developments reflect one of the most fundamental challenges of globalization for existing modes of global governance, namely how to balance effectiveness with legitimacy when the latter requires some notion of representative and accountable decisionmaking (Governance, 1995; Held, 1995; Keohane, 1998).
Regionalizing globalization

Whereas Tiersmondisme' sought to build global solidarity amongst developing nations and ultimately a degree of delinking from the global capitalist economy, recent years have witnessed a profound shift towards regionalism as a political strategy for engaging with a globalizing world. The regionalist project, as it has become

known, is under way on all continents (see Table 16.3) although it is much more advanced in Europe than elsewhere and follows very different kinds of models in different parts of the world. Underlying the shift towards regionalism amongst developing states and emerging economies, in particular, is a recognition that, in a more interconnected and less stable world order, effective development policies are 'possible only in concert with others, such as regional trading groups...By forming such groups, poor countries.. .combine increased competition with economies of scale and a better division of labour - while retaining some protection from competition from more advanced countries' (UNDP, 1997b, p.91). Regionalism also potentially enhances the bargaining power of subordinate states within the institutions of global economic governance. By comparison with the strategy of 'Tiersmondisme' it also supports a form of international solidarity which can take account of the enormous diversity amongst

Table 16.3

Major regional arrangements since 1980

Acronym Date of formation

Organization of East Caribbean States Gulf Co-operation Council Economic Community of West African States South Asian Association for Regional Co-operation Arab Maghreb Union Asia-Pacific Economic Co-operation Latin American Integration Association Visegrad group Southern African Development Community Common Market for East and Southern Africa Association of Caribbean States Group of 3 - Colombia, Mexico, Venezuela North American Free Trade Area Economic and Monetary Community of Central Africa Union economique et monetaire ouest-africaine South American Common Market

OECS

1981 1982 1983 1985 1989 1989 1990 1991 1992 1993 1994 1994 1994 1994 1994 1995

GCC
ECOWAS SAARC

AMU
APEC ALADI SADC COMESA

ACS
NAFTA CEMAC UEMOA MERCOSUR

Source: Adapted from Elazar, D. (1998) Constitutionalizing Globalization, Rowman and Littlefield, New York.

POVERTY AND DEVELOPMENT INTO THE 21ST CENTURY

developing states, in terms of levels of industrialization, geopolitical situation and forms of governance. Amin refers to this new regionalism as 'polycentric regionalism' since it is a strategy for further eroding the old North-South hierarchy and building a more pluralistic world order (Amin, 1997). Furthermore, rather than being constructed in opposition to globalization, it is buttressed by a growing enmeshment in the global political economy. The new regionalism constitutes a form of 'open regionalism' with the object of deepening global engagement and at the same time creating an institutional and political capacity to 'modify the conditions of globalization'(Gamble & Payne, 1991; Amin, 1997, p.75). This is evident in the growing intensity of interregional diplomacy, such as that between MERCOSUR and the EU, as regional groups seek to establish open trading and investment areas embracing all their member states. Regionalism, in a variety of different forms, is advancing at different speeds on all continents creating a complex system of multilayered governance at the world level (Fawcett & Hurrell, 1995; Rowlands, 1998; Held et al, 1999). It represents what Elazar calls a mechanism for 'constitutionalizing globalization'; that is, a political strategy for disciplining globalization to accord more closely with the political priorities of sustainable development (Elazar, 1998). However, the limits to regionalism are all too evident in the potential it has to intensify inter-regional competition and conflict as well as to erode global solidarity. As a political strategy for developing countries faced with a globalizing world, regionalism is thus by no means purely benign.
Resisting globalization

communities resist and contest the terms of neoliberal economic globalization by building transnational alliances and coalitions to promote an alternative programme which aims 'to make markets work for people, not people for markets' (UNDP, 1997b, p.91). A good illustration of this was the global campaign against the Multilateral Agreement on Investment (MAI), a proposed international treaty to remove national barriers to the globalization of business, which brought together a coalition of social, environmental, women's and development movements from all continents to mobilize, lobby and protest against its adoption. Partly as a consequence of the effective global mobilization ofopposition, the MAI negotiations collapsed in 1998. What connects the diverse forces which constitute this 'globalization from below' is an alternative vision of development which starts from the assumption that 'all economics is local' and which seeks above all the empowerment of peoples, human security and environmental sustainability. But there are also significant divisions and differences between these social movements, not least on grounds of gender, culture and priorities (Cheru, 1997). Moreover, not all advocacy movements have progressive aims, since many racist, xenophobic, and reactionary groups also seek to combat the 'tide of globalization'. Despite this, from the corridors of the WTO and the Cabinet room of 10 Downing Street to the boardrooms of Del Monte and Monsanto, 'globalization from below' has become a significant political force which has to be reckoned with.

16.5 Conclusion: towards a global 'New Deal' or 'global anarchy'?

As the new millennium unfolds, one of the most pressing questions confronting the international community is whether it 'can manage the globalization process in a way that...offers a more equal sharing in its benefits', i.e. engendering sustainable globalization (UNCTAD, 1998, p.5). As globalization transforms the context of national economic governance it invites the prospect ofa global 'New Deal' between rich and poor

As the agencies of transnational civil society become more active on development issues they 'challenge traditional approaches to development which place the state at the centre of the process' (Dickson, 1997, p.155). Recent years have witnessed a vigorous 'globalization from below' as social movements, citizens groups and

16

SUSTAINABLE GLOBALIZATION?

states and peoples, as sustainable development increasingly becomes a shared concern. The alternative is an increasingly fragmented and unruly world 'generating enormous misery, deprivation and violence' - a dystopia best captured in the phrase 'the new barbarism' (Burbach et al., 1997, p.142). Of course these are, in many respects, extreme scenarios of future world order. Nevertheless they constitute two ways of thinking about the future which continue to inform much contemporary political discussion about globalization and its consequences for development. In some respects both scenarios capture elements of the lived experience of globalization for communities and societies on all the world's continents. But which tendency, if any, is likely to prevail? Given that today the poorest countries and peoples are also the least enmeshed in global networks, a strategy of delinking for the next century 'will not be the basis for growth...but of increasing poverty'(Stallings, 1995, p.388). Furthermore, as the neoliberal credo of globalization comes under growing challenge in the wake of the East Asian crisis, there is evidence of a shift in attitudes and thinking within the institutions of global governance towards more effective regulation of globalization consonant with the requirements of social democracy and sustainable development. UNCTAD recently concluded that: 'There are already encouraging signs of a greater readiness on the part of

advanced countries and the major international institutions...to work for shared and cooperative goals which address directly the needs of the developing and least developed countries and their peoples' (UNCTAD, 1998, p.7). This 'post-Washington consensus', though far from radical, expresses a shared political concern in many of the world's capitals with the socially divisive and destabilizing consequences ofunfettered global capitalism. This search for a form of 'sustainable globalization' (i.e. conducive to social justice, human security and environmental protection) also reflects a self-realization within G7 capitals that 'it is highly implausible to believe that, over the medium term, the 15% of the world's population living in the OECD world can insulate itself from the instability and insecurity of the rest, not to mention growing social divisions within it (Hurrell, 1999, p.270). But this new development consensus is an inherently fragile political creation since there are powerful constituencies - both public and private within all regions weighed against it. In these circumstances a more just and secure world order is far from preordained but, on the contrary, is still to be struggled for. Acknowledging this, a recent UNDP report nevertheless concludes that 'Inequality is not inherent in globalization' (UNDP, 1997b, p.82). However, whilst some of the political preconditions for sustainable globalization may be in place, as yet it remains an unrealized ambition.

Summary
1 Globalization refers to the growing sense of interconnectedness between all parts of the world and the associated feelings of powerlessness and insecurity in the face of the spread and scale of global change. It is driven by a combination of economic forces (the tendency ofcapitalism to expand), technological change (the informatics revolution), political shifts (away from state intervention towards economic liberalization) and increasing global awareness among national elites and social movements. Globalization is a process of increasing extensity, intensity, velocity and impact of global interactions. It both unites and divides, arguably creating a more unruly and unequal world.

363

POVERTY AND DEVELOPMENT INTO THE 21ST CENTURY

2 There are three accounts of how globalization affects inequality and world order. Neoliberals view globalization as a progressive force for creating prosperity in a global market civilization. Inequalities are gradually overcome and what was the 'third world' is increasingly differentiated as some countries successfully industrialize. Radicals suggest that globalization means exclusion, deepening inequality and a reinforced division of the world into core and periphery: a new form of Western imperialism which dominates and exploits through multinational capital and instruments of global governance such as the World Bank and IMF. Transformationalists argue that globalization really is new; it has changed the configuration of global power so that there are growing concentrations of wealth and power in parts of the South and increasing social exclusion and poverty in parts of the North. There is also a changed role for states, which now share global political space with multinational corporations, intergovernmental agencies, NGOs and social movements. 3 It is argued that on a number of issues transformationalism provides a better explanation for global changes than the other accounts. Thus the globalization of poverty is a matter of new forms of social exclusion cutting across North and South rather than either a general spread of prosperity or the reinforcement of previous divisions. The North-South politics of'tiersmondisme' promoted by 'third world' states has been replaced by a global politics of sustainable development promoted by a coalition of interests within states and groups and organizations from transnational civil society. Finally, rather than signalling the demise of the state, globalization has stimulated a more activist state, with a range of options for engaging with other actors within the constraints of the global arena. 4 There are three main strategies for managing globalization. Regulation can mean developing states both attempting to reform the international institutions which embody the rules of the global system and trying to see those rules enforced favourably. Regionalism replaces global solidarity among all developing countries with effective economic groupings on a regional basis. Resistance refers to challenges 'from below' as social movements, citizens' groups and communities build transnational alliances to contest the neoliberal vision of globalization and promote an alternative programme. 5 A crucial question for the twenty-first century is whether globalization can be managed in the interests of equity and sustainability. This can only be achieved if the major global actors and social forces accept that unfettered global capitalism will tend to cause fragmentation and chaos, and work with others for cooperative goals which directly address the needs of the poor and excluded. So far such progress has been limited.

364