Economic Globalization and Human Rights

(Speech at the Danish Parliament on the 50th Anniversary of the Universal Declaration on Human Rights, December 10, 1998)

I’d like to start by referring to what we might call the "traditional" concept of human rights: freedom of press, speech and assembly, entitlement to due process of law and other legal protections. The World Bank’s articles of agreement have traditionally constrained us in these areas. The articles to which all our member countries subscribe specifically stipulates that "Only economic considerations shall be relevant" and that we "shall not interfere in the political affairs of any member country, nor shall (we) be influenced in (our) decisions by the political character of the member country."

Consequently our contribution has, in the past, been in the area of the fundamental right to basic necessities for an adequate standard of living, including employment, nutrition, shelter, health care and education. These rights are of critical importance and are enshrined in the preamble to the Universal Declaration of Human Rights, which refers to the dignity and worth of the human person and the promotion of social progress and better standards of life.

However, what has become clear in recent years is the linkage between these different types of human rights. Many public services will only reach the poor if governments are capable of delivering them without the obstacles of corruption. Laws created to end child labor will be more effective if parents are not living in grinding poverty. And legal rights are better pursued in effective court systems. In other words, we at the World Bank are acutely aware that to carry out our economic mandate, we should appropriately address other issues that help people live in a more civilized, just and transparent society.

I was asked to speak about economic globalization, but I don’t believe you can really separate this from the other aspects of globalization – I’m referring particularly to the world of instant global communications.

On balance, I would argue that globalization is a positive force for improved human rights. Earlier this week, I was in Hong Kong where they are suffering from East Asian ‘flu, but they haven’t caught pneumonia there like their neighbors. Nevertheless the talk there is of nothing but the severe economic downturn in the region. Some 25 million people in Indonesia and Thailand alone have fallen back into poverty in the past year, sparked in the first instance by foreign money being suddenly withdrawn from those markets. It is reasonable, therefore, to argue that the volatility of global capital flows is to blame for the loss of the fundamental right of these people for freedom from want. In other words they are victims of the fallout of globalization.

But you also need to look at the other side of the story. Economic integration of these countries had a powerful effect on their economic growth and poverty reduction. There is no known case of any country successfully reducing poverty without economic growth. Foreign investment in the East Asian Tigers jumped from $20 billion (DKr 120 billion) to $100 billion (DKr 600 billion) in less than a decade. This, combined with the sound investments they made in education particularly, led to enormous benefits for the poor. The number of people living below the poverty line fell from 700 million to less than 350 million in less than twenty years.

Over the past year, we have learned that the capital flows are not enough. They need to be going into well-run financial sectors to reduce their volatility. Market confidence must be maintained. The challenge now in East Asia -- and everywhere else too – is to build strong government institutions, clear and enforceable regulations, and transparent corporate governance. These, coupled with a free and vocal press, are required to ensure that governments and companies are competent and are kept honest so that growth can be sustained and the benefits can be equitably distributed. While these measures are an economic priority, they help create conditions that are valuable to a much fuller range of what I referred to earlier as "traditional" human rights.

Globalization also poses a challenge to multinational corporations. We all recall the horrors of Bhopal and the instances of international companies taking advantage of lax local labor laws to exploit poorly paid workers. All of us: governments, international bodies, trade unions, NGOs, the media, and, above all, the companies themselves, must work to ensure that globalization is a force to improve labor standards to the highest common level throughout the world.

We now recognize that corruption -- as a misallocation of resources -- is a clear economic issue. Entrepreneurs cannot prosper if goods are held up at ports and transit points by bribes. What use is increased health spending if ministry officials steal medical supplies? Environmental programs are useless if timber contracts are sold under the table.

So we are working with our borrowers to design institutions and systems that cut down on the incentive for and the capability of public officials to engage in corruption. We work with governments to improve accounting and audit, procurement and so on. Corruption eventually scares away investors, both foreign and domestic, capital disappears, jobs are lost and the poor are hit the hardest.

One of the greatest causes of the perpetuation of poverty is simply the exclusion of the poor from many of the rights that we take for granted. Access to credit is critical and we are working with others to expand the work of bodies like the Grameen Bank, which make loans to very poor people. Access to justice is also critical. No human rights can be guaranteed without a strong, accessible and independent judiciary. A country’s legal system should be the ultimate guarantor of equality under the law between rich and poor, the powerful and the weak and the state and the citizen. We have provided substantial support for judicial reform projects in a number of countries. In Guatemala for instance we are involving civil society including indigenous communities in an effort to establish a modern judicial system as an outcome of the 1996 peace accords.

Amartya Sen, who this morning received the Nobel Economics prize, has said

" There has never been a famine in any country that has had a democracy with a relatively free press….I know of no exception"

The open exchange of ideas and information is the cornerstone of freedom. At one fundamental level, tragically millions of children die of diarrhea because parents lack information on simple oral rehydration techniques.

At another level, the ability for images to flashed around the world in seconds and the Internet which respects no national border guards are outcomes of globalization that have become weapons in the war against human rights abuses. Less than a decade ago, the television pictures of one country after another in Eastern and Central Europe throwing off the yokes of dictatorial government must surely have speeded the process among their neighbors. Hi-8 video of human rights abuses shot by local citizens in Africa, using Japanese camcorders costing a few thousand Kronor, can be seen on TV screens around the world. In other words, globalization of communications is making it more difficult for governments to abuse their people without the rest of the world finding out.

I have spent time in Bosnia and heard the tragic stories of what happened at Srebenica from the lips of the widows of the victims. Arguably, our ability to see the horrors of what happened there and elsewhere in Bosnia helped to goad the West into bringing the warring sides to Dayton. Long before the globalization of communications --186 years ago – the battle of New Orleans was fought while news of the treaty of Paris, which had already ended the war, was crossing the Atlantic by boat! We have come a long way since then.

Well-trained, professionally managed, and independent news media can inject usable knowledge into the economy and accountability into the political process. The World Bank’s Economic Development Institute has investigative journalism workshops in Uganda, Tanzania, Malawi, Benin, and Mauritius and has also organized National Integrity Systems workshops in Africa and South Asia – to bring national consensus to transparency and openness in government decision making.

The World Bank is helping poor people from being excluded from the benefits of a globally integrated economy. Access to credit, access to justice, access to knowledge and to the media, access to education, especially for girls who are so often excluded, access to property rights. These are critical as is the need to protect the vulnerable, whether they be women and children, or the victims of war. We are working in all these areas, invariably with NGOs. And, in the aftermath of the East Asian crisis, we have made a major commitment, not only to improve financial openness and corporate governance, but also to build systems to protect displaced workers and other vulnerable groups who are victims of the downside of globalization.

I was in Copenhagen a few weeks ago when 39 countries agreed on the funding for the part of the World Bank that lends to the poorest countries. This lending for the next three years will take place in a framework of:

• A strong commitment to equitable growth

• A preponderance of lending for education, health, and social protection with a strong gender component,

• Participation by ordinary people in determining policies which will affect their lives, and

• An emphasis on good governance.

All of these priorities can contribute directly to the fulfillment of many of the rights articulated in the Universal Declaration.

Speaking to the delegates, Danish Minister for development Cooperation, Poul Nielson, described it as the "Copenhagen Consensus". I hope our discussions this afternoon will contribute if not to another Copenhagen Consensus, at least to a better understanding of the interactions between global economics and human rights. The poor must always be at the forefront in our efforts to ensure that globalization is a force for prosperity for all.

Globalisation –
Good or Bad?
(Speech at Worldaware Conference, London,
4 March, 2004)

Beyond Compliance – Creating an ethical business environment
(Speech at OECD-SECODAM Conference, Mexico City, 19 September, 2002)

Economic Globalization and Human Rights
(Speech at the Danish Parliament on the 50th Anniversary of the Universal Declaration on Human Rights, December 10, 1998)

Matching the reality and rhetoric surrounding water resources and services – how to achieve an informed public debate.
(Keynote address to the Asia-Pacific Forum of Environmental Journalists, Dhaka, Bangladesh, May 8, 2006)