OWN CORRESPONDENT, Durban | Monday 10.00PM.
THE G8 grouping of industrialised countries and the institutions over which they exercise influence have a monopoly over determining policies that affect the entire globe, an economic advisory panel told a foreign ministers’ meeting at the Non-Aligned Movement summit in Durban on Monday.
However those policies are not neccessarily beneficial to developing countries, nor do they they take into account their impact on poorer countries. The developing countries, even collectively, currently have little power to influence those policies, the meeting heard.
At its last meeting in Columbia three years ago, the panel was asked to assess the international economic situation from the perspective of developing countries. It produced a 45-page report and a 17-page summary which will form the basis of a number of NAM resolutions to be adopted by heads of state later this week.
The report, among other things, calls on developing countries to consider measures to moderate short-term and speculative capital flows to reduce their vulnerability and instability.
In 1996 developing countries attracted just 30% of foreign direct investment, and in 1995 accounted for only 22,5% of world trade. They were hardest hit by the recent turmoil which swept world financial markets.
The panel said some developing countries do not reap major benefits from deregulating and liberalising their economies, or from integrating themselves further into the world economy.
“The development of the poorest countries has in some cases been prejudiced. Several richer developing countries, with a long history of fast growth and sound economic fundamentals, have recently experienced a severe economic setback arising from a financial crisis generated by the instabilities associated with financial liberalisation and from inappropriate policy prescriptions to deal with the crisis,” the panel said.
Regarding the problems falling commodity prices posed to developing countries, the economists said producing countries should consider undertaking supply management schemes.
While not rejecting globalisation outright, the foreign ministers stressed the need for developing countries to play a greater role in shaping its development.
Chairman of the economists’ panel Dr Gamani Corea of Sri Lanka said the process of globalisation did not mean it had to be implemented at an equal pace by all groups of countries. The main challenge facing developing countries was to ensure that they profited from globalisation while defending themselves from its negative repercussions, he said.