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I am author of the books Political Internet(Routledge, 2017), Intimate Speakers ( Fingerprint! 2017), has finished the typescript of three books—first, on Internet and sexuality; second, on the negative impacts of social media; and third, a novel—and is presently working on a narrative non-fiction with the working title Lovescape: Why India is afraid of love.

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Friday, November 29, 2013

WTO: A Critical Appriasal, Lecture points by Biju P R

WTO principles

Founded in 1995 after the 8-year “Uruguay Round” of talks, it succeeded the General Agreement on Tarrifs and Trade (GATT), which was created in 1948 to lower trade barriers. The scope of the WTO is greater, however, including services, agriculture, and intellectual property, not just trade in goods.
The main principles of the WTO boil down to the following:
Non discrimination
National treatment implies both foreign and national companies are treated the same, and it is unfair to favor domestic companies over foreign ones. Some countries have a most favored nation treatment, but under WTO the policy is that all nations should be treated equally in terms of trade. Any trade concessions etc offered to a nation must be offered to others.
Nations try to provide similar concessions for each other.
Negotiations and process must be fair and open with rules equal for all.
Special and differential treatment
A recognition that developing countries may require “positive discrimination” because of historic unequal trade.

Stop the anti-democratic practices of the WTO
The WTO is supposed to operate by consensus where each member country has equal say. The reality is very different. At the 4th WTO Ministerial in Doha, Qatar in November 2001, this was apparent. Key decisions were made in small "by invitation only" meetings and the U.S., EU, Canada and Japan (known as the "Quad" countries within the WTO) drove most of the agenda, despite opposition from countries in the South. In the run-up to the Cancun Ministerial, "Mini-Ministerials" are being organized in Australia, Japan and Egypt. Despite the fact that key decisions and discussions that affect all WTO members are on the agenda for these meetings, only a certain group of countries is invited. The powerful Quad countries will participate in all of the Mini-Ministerials, as will a small number of developing countries and the WTO Secretariat. The Mini-Ministerial process is aimed at forging consensus for the 145-member WTO with only a handful of countries - is fundamentally flawed and demonstrates the undemocratic nature of the WTO.
Stop the GATS Attack!
Initiated in February 2000, far-reaching negotiations are taking place which aim to expand the WTO General Agreement on Trade in Services (GATS) regime which could subordinate democratic governance in countries throughout the world to global trade rules. These GATS 2000 negotiations are taking place behind closed doors with little or no consultation of the sectors most affected by them.
For many countries in the South, this invasion of peoples basic rights is not new. Over the last several decades, the structural adjustment programs of the IMF and the World Bank have been used to force many governments in the South to dismantle their public services and allow foreign-based healthcare, education and water corporations to deliver services on a "for profit" basis. Under the proposed GATS rules, developing countries could experience a further dismantling of local service providers, restrictions on the development of domestic service providers, and the creation of new monopolies dominated by corporate service providers based in the North. By dramatically increasing market control by corporations and by threatening the future of public services, the GATS 2000 agenda could trigger a global assault on the commons and democracy both in the North and the South. Moreover, the binding enforcement mechanisms of the WTO will ensure that this agenda is not only implemented, but rendered irreversible.
Stop Corporate Patent Protectionism –
Seeds & Medicine are Human Rights, not Commodities
All intellectual property policies must allow governments to limit patent protection in order to protect public health and safety. This is especially essential in relation to life-saving medicines and life forms. The patenting of life-forms and their parts, including microorganisms, must be prohibited in all national and international regimes. Current intellectual property rules in trade pacts, such as the WTO’s Trade Related Intellectual Property Rights (TRIPs) agreement, obstruct consumer access to essential medicines and other goods, lead to private appropriation of life forms and traditional knowledge, undermine biodiversity, and keep impoverished countries from increasing their levels of social and economic welfare. There is no basis for inclusion of such intellectual property claims in a trade agreement.
At the Doha Ministerial, the WTO agreed to non-binding language stating that the TRIPS agreement should not prevent WTO members from taking measurers to protect the public health. Since the language was non-binding, the reality is unfortunately that the TRIPS agreement still makes it hard to make affordable medicines available to people. In addition, pharmaceutical companies are angling to weaken and destroy even this non-binding pro-public health interpretation at the Cancun Ministerial.
No Patents on Life
The patenting of life forms and their parts, and other intellectual property rights over biological resources must be prohibited in all national and international regimes. Genetic diversity is not a category of private property, and biopiracy or theft of traditional knowledge must be stopped.
Food is a Basic Human Right: Stop the Agriculture Agreement Fraud and Calamity
The Agreement on Agriculture (AoA) is fraudulent because the subsidies going to export oriented industrial farming have not been reduced (but instead have gone up), whereas the small farmers are suffering from import liberalization wiping out their livelihoods and incomes. To avoid further calamities to millions of small farmers, action must be taken immediately to drastically reduce or remove support for export-oriented agriculture and to reverse import liberalization.
Measures taken to promote and protect genuine food sovereignty and security as well as to promote small farmers practicing sustainable agriculture must be exempted from international trade rules. The trading system must not undermine the livelihood of peasants, small farmers, artisanal fishers and indigenous peoples that support local economies.
The basic human right to food can only be realized in a system where food sovereignty is guaranteed, meaning the right of peoples to define their own food and agricultural policies as well as the right to produce their basic foods in a manner respecting cultural and productive diversity.
No Investment Liberalization
The WTO Trade Related Investment Measures (TRIMS) Agreement must be eliminated. All countries and especially third world countries must have the right to use policy options (such as local content policy) to increase the capacity of their own productive sectors, especially small and medium enterprises. One of the outcomes of the Doha ministerial was to open the door to possible negotiations on the so-called "New Issues" (investment, competition policy, procurement and trade facilitation) despite opposition from countries in the South. This will be one of the main points of controversy in Cancun, as the EU and Japan in particular continue to push for these negotiations. OWINFS opposes any attempts to start negotiations on investment rules, investment framework or an investment agreement of whatever kind in the WTO.
Prioritize Social Rights and the Environment
Trade liberalization encourages richer countries to consume more and poorer countries to export more. The end result is an increasingly polluted environment (through spiraling waste and transport-related pollution levels, for example) and the alarmingly rapid loss of irreplaceable natural resources. Furthermore, the WTO and other free trade agreements, which drive this destructive process, also include rules that undermine hard-won national and international legislation designed to protect peoples' environment. The "environment" will be a key negotiating topic for governments meeting in Cancun. It has been placed on the agenda by the EU in a very limited way, but there is little prospect of any real change, since the WTO's raison d'être is to increase the pace of the overall liberalization process.
‘The WTO only serves the interests of multinational corporations’

The accusation
“The WTO is not a democratic institution [1], and yet its policies impact all aspects of society and the planet. The WTO rules are written by and for corporations with inside access to the negotiations [2]. For example, the US Trade Representative relies on its 17 ‘Industry Sector Advisory Committees’ to provide input into trade negotiations. Citizen input by consumer, environmental, human rights and labor organizations is consistently ignored. Even requests for information are denied [3], and the proceedings are held in secret.

‘The WTO undermines national sovereignty’

The accusation
“By creating a supranational court system that has the power to economically sanction countries to force them to comply with its rulings, the WTO has essentially replaced national governments with an unelected, unaccountable corporate-backed government [1]. For the past nine years, the European Union has banned beef raised with artificial growth hormones. The WTO recently ruled that this public health law is a barrier to trade and should be abolished. The EU has to rollback its ban or pay stiff penalties [2]. Under the WTO, governments can no longer act in the public interest [3].

‘The WTO is killing people’

The accusation
“The WTO's fierce defense of intellectual property rights — patents, copyrights and trademarks — comes at the expense of health and human lives [1]. The organization's support for pharmaceutical companies against governments [2] seeking to protect their people's health has had serious implications for places like sub-Saharan Africa, where 80 percent of the world's new AIDS cases are found. The US government, on behalf of US drug companies, is trying to block developing countries' access to less expensive, generic, life-saving drugs. For example, the South African government has been threatened with a WTO challenge over proposed national health laws that would encourage the use of generic drugs [3], ban the practice of manufacturers offering economic incentives to doctors who prescribe their products [4] and institute ‘parallel importing,’ which allows companies to import drugs from other countries where the drugs are cheaper [5].

The WTO undermines local development and penalizes poor countries’

The accusation
“The WTO’s ‘most favored nation’ provisions require all WTO member countries to treat each other equally and to treat all corporations from these countries equally regardless of their track record [1]. Local policies aimed at rewarding companies who hire local residents, use domestic materials, or adopt environmentally sound practices are essentially illegal [2] under the WTO. Under the WTO rules, developing countries are prohibited from following the same polices that developed countries pursued, such as protecting nascent, domestic industries until they can be internationally competitive [3].

The WTO is increasing inequality’

The accusation
“Free trade is not working for the majority [1] of the world. During a the most recent period of rapid growth in global trade and investment — 1960 to 1998 — inequality worsened [2] both internationally and within countries. The UN Development Program reports that the richest 20 percent of the world's population consume 86 percent of the world's resources while the poorest 80 percent consume just 14 percent. WTO rules have hastened these trends [3] by opening up countries to foreign investment and thereby making it easier for production to go where the labor is cheapest and most easily exploited and environmental costs are low. This pulls down wages and environmental standards in developed countries who are having to compete globally [also 3].

The WTO is destroying the environment’

The accusation
The WTO is being used by corporations to dismantle hard-won environmental protections, who call them barriers to trade. In 1993 the very first WTO panel ruled that a regulation of the US Clean Air Act, which required both domestic and foreign producers alike to produce cleaner gasoline, was illegal [1]. Recently, the WTO declared illegal a provision of the Endangered Species Act [2] that requires shrimp sold in the US to be caught with an inexpensive device that allows endangered sea turtles to escape. The WTO is currently negotiating an agreement that would eliminate tariffs on wood products, which would increase the demand for timber and escalate deforestation [3].

The WTO undermines national sovereignty’

The accusation
“By creating a supranational court system that has the power to economically sanction countries to force them to comply with its rulings, the WTO has essentially replaced national governments with an unelected, unaccountable corporate-backed government [1]. For the past nine years, the European Union has banned beef raised with artificial growth hormones. The WTO recently ruled that this public health law is a barrier to trade and should be abolished. The EU has to rollback its ban or pay stiff penalties [2]. Under the WTO, governments can no longer act in the public interest [3].

I M F: A Critique, Lecture points by Biju P R

Role of IMF 
The International Monetary Fund is a global organisation founded in 1944. It aims was to help stabilise exchange rates and provide loans to countries in need. Nearly all members of the United Nations are members of the IMF with a few exceptions such as Cuba, Lichtenstein and Andorra. The IMF is independent of the World Bank although both are United Nations agencies and both are aiming to increase living standards. The World Bank concentrates on long term loans to developing countries.
Functions of IMF
  1. International Monetary Cooperation
  2. Promote exchange Rate stability
  3. To help deal with Balance of Payments adjustment
  4. Help Deal With Economic Crisis by providing international coordination
What the IMF does
1. Economic Surveillance. IMF produces reports on member countries’ economies and suggest areas of weakness / possible danger. The idea is to work on crisis prevention by highlighting areas of economic imbalance.
2. Loans to Country’s with financial crisis. The IMF has $300 billion of loanable funds. This comes from member countries who deposit a certain amount on joining. In times of financial / economic crisis, the IMF may be willing to make available loans as part of a financial readjustment. The IMF has arranged more than $180 billion in bailout packages since 1997.
3. Technical assistance and economic training. The IMF produce many reports and publications. They can also offer support for local economies.
How is IMF Financed?
The IMF is financed by member countries who contribute funds on joining. They can also increase this throughout their membership. The IMF can also ask its member countries for more money. IMF financial resources have risen from about $50 billion in 1950 to nearly $300 billion last year, sourced from contributions from its 183 members. This initial amount depends on the size of the countries economy. E.g. the US deposited the largest amount with the IMF. The US currently has 16% of voting rights at the IMF, a reflection of its quotas deposited with IMF. The UK has 4% of IMF Voting rights. Loans are also available to developing countries to ‘deal with poverty reduction.’
Special Drawing Rights SDR
The IMF use Special drawing rights to provide a unit for the amount of foreign currency member states can draw on. SDRs are defined in terms of a basket of major currencies including: Euro, Pound Sterling, Japanese yen and US Dollar.
Criticism of IMF
Over time, the IMF has been subject to a range of criticisms, generally focused on the conditions of its loans. The IMF has also been criticised for its lack of accountability and willingness to lend to country’s with bad human rights record.Many Criticisms of IMF include:
1. Conditions of Loans
On giving loans to countries, the IMF makes the loan conditional on the implementation of certain economic policies. These policies tend to involve:
1.Reducing government borrowing – Higher taxes and lower spending
2.Higher interest rates to stabilise the currency.
3.Allow failing firms to go bankrupt.
4.Structural adjustment. Privatisation, deregulation, reducing corruption and bureaucracy.
The problem is that these policies of structural adjustment and macroeconomic intervention make the situation worse.
For example, in the Asian crisis of 1997, many countries such as Indonesia, Malaysia and Thailand were required by IMF to pursue tight monetary policy (higher interest rates) and tight fiscal policy to reduce the budget deficit and strengthen exchange rates. However, these policies caused a minor slowdown to turn into a serious recession with mass unemployment.
In 2001, Argentina was forced into a similar policy of fiscal restraint. This led to a decline in investment in public services which arguably damaged the economy.
2. Exchange Rate Reforms. When the IMF intervened in Kenya in the 1990s, they made the Central bank remove controls over flows of capital. The consensus was that this decision made it easier for corrupt politicians to transfer money out of the economy (known as the Goldman scandal). Critics argue this is another example of how the IMF failed to understand the dynamics of the country that they were dealing with – insisting on blanket reforms.
The economist Joseph Stiglitz has criticised the more monetarist approach of the IMF in recent years. He argues it is failing to take the best policy to improve the welfare of developing countries saying the IMF "was not participating in a conspiracy, but it was reflecting the interests and ideology of the Western financial community."
3. Devaluations In earlier days, the IMF have been criticised for allowing inflationary devaluations.
4. Neo Liberal Criticisms There is also criticism of neo liberal policies such as privatisation. Arguably these free market policies were not always suitable for the situation of the country. For example, privatisation can create lead to the creation of private monopolies who exploit consumers.
5. Free Market Criticisms of IMF
As well as being criticised for implementing ‘free market reforms’ Other critise the IMF for being too interventionist. Believers in free markets argue that it is better to let capital markets operate without attempts at intervention. They argue attempts to influence exchange rates only make things worse – it is better to allow currencies to reach their market level.
There is also a criticism that bailout countries with large debt creates moral hazard. Because of the possibility of getting bailed out it encourages people to borrow more.
6. Lack of Transparency and involvement
The IMF have been criticised for imposing policy with little or no consultation with affected countries.
Jeffrey Sachs, the head of the Harvard Institute for International Development said:
"In Korea the IMF insisted that all presidential candidates immediately "endorse" an agreement which they had no part in drafting or negotiating, and no time to understand. The situation is out of hand…It defies logic to believe the small group of 1,000 economists on 19th Street in Washington should dictate the economic conditions of life to 75 developing countries with around 1.4 billion people."
7. Supporting Military dictatorships.
The IMF have been criticised for supporting military dictatorships in Brazil and Argentina, such as Castello Branco in 1960s received IMF funds denied to other countries.

World Bank: A critique, Lecture points by Biju P R

Criticism of the World Bank encompasses a whole range of issues but they generally centre on concern about the approaches adopted by the World Bank in formulating their policies, and the way they are governed. This includes the social and economic impact these policies have on the population of countries who avail themselves of financial assistance from these two institutions, and accountability for these impacts.
Critics of the World Bank are concerned about the ‘conditionalities’ imposed on borrower countries. The World Bank often attach loan conditionalities based on what is termed the ‘Washington Consensus’, focusing on liberalisation—of trade, investment and the financial sector—, deregulation and privatisation of nationalised industries. Often the conditionalities are attached without due regard for the borrower countries’ individual circumstances and the prescriptive recommendations by the World Bank to resolve the economic problems within the countries.
With the World Bank, there are concerns about the types of development projects funded. Many infrastructure projects financed by the World Bank Group have social and environmental implications for the populations in the affected areas and criticism has centred on the ethical issues of funding such projects. For example, World Bank-funded construction of hydroelectric dams in various countries has resulted in the displacement of indigenous peoples of the area.
The World Bank’s role in the global climate change finance architecture has also caused much controversy. Civil society groups see the Bank as unfit for a role in climate finance because of the conditionalities and advisory services usually attached to its loans. The Bank’s undemocratic governance structure – which is dominated by industrialised countries – its privileging of the private sector and the controversy over the performance of World Bank-housed Climate Investment Funds have also been subject to criticism in debates around this issue. Moreover, the Bank’s role as a central player in climate change mitigation and adaptation efforts is in direct conflict with its carbon-intensive lending portfolio and continuing financial support for heavily polluting industries, which includes coal power.
There are also concerns that the World Bank working in partnership with the private sector may undermine the role of the state as the primary provider of essential goods and services, such as healthcare and education, resulting in the shortfall of such services in countries badly in need of them. As an increasing shift from public to private funding in development finance has been observed recently, the Bank’s private sector lending arm – the International Finance Corporation (IFC) – has also been criticised for its business model, the increasing use of financial intermediaries such as private equity funds and funding of companies associated with tax havens.
Critics of the World Bank are also apprehensive about the role of the Bretton Woods institutions in shaping the development discourse through their research, training and publishing activities. As the World Bank are regarded as experts in the field of financial regulation and economic development, their views and prescriptions may undermine or eliminate alternative perspectives on development.
There are also criticisms against the World Bank governance structures which are dominated by industrialised countries. Decisions are made and policies implemented by leading industrialised countries—the G7—because they represent the largest donors without much consultation with poor and developing countries.
Over the past three decades, the World Bank has radically re-shaped the policies of developing countries. ‘Conditionality’ – stipulating policy changes governments must make in order to receive loans and unlock aid from other donors – has been instrumental in bringing about this change.

But the practice of conditionality has also attracted a welter of criticism; for closing down policy space, for failing to foster sustainable reform and for its negative impact on poverty. Clumsily executed and highly controversial reforms in areas such as privatisation and trade liberalisation have often carried a heavy social and economic cost for the poorest and most vulnerable, and severely undermined the credibility of the Bank in many developing countries.

There are three main problems with the Bank’s current use of economic policy conditionality. Firstly, it tends to take key decisions away from sovereign governments and put them in the hands of unelected World Bank officials. This can serve to undermine the development of domestic accountability processes in developing countries. Secondly, the use of conditionality to promote policy changes has proved to be an ineffective, clumsy and politically unsustainable method of bringing about change. Thirdly, some policies promoted by the World Bank have failed to reduce poverty, or have even made things worse. Clumsily designed and ill-timed policies to promote the liberalisation of trade, the privatisation of public services and the deregulation of economies have sometimes sparked political crises serious enough to derail a government’s commitment to a wider reform programme
A number of former World Bank employees, including former chief economist Joseph Stiglitz, publicly criticize both the World Bank and the IMF. Their voices add credibility and an "insider" perspective to worldwide opposition to the destructive orthodoxies of the two institutions. In response, the Bank has attempted to censor several leading employees and contractors who deviated from neoliberal models of growth, trade liberalization, and privatization.