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In this two-part series, Martin Khor addresses issues relating to debt and international trade. Since the debt crisis began in the 1970s, many developing countries have had to agree to new loan conditions imposed on them by the International Monetary Fund (IMF). These conditions, of benefit to many western commercial interests, often prevent national governments from implementing their own key economic, development and environmental policies. Trade liberalization is one such condition. Dr Khor describes the adverse effects a liberal trade agenda can have on these countries, particularly on their farmers and small industries. He argues that developing countries must be given the freedom to adopt policies of their own. Finally, he welcomes the G8’s decision to cancel the debt of some 18 countries, but warns that the terms and scope will need careful study.
- Debt in the Developing World—Part One
- Running time
- 2m 20s
- London, UK, July 15, 2005
- Marcus Morrell
- About Martin Khor
- Director, Third World Network
Martin Khor is the Director of the Third World Network (TWN) and editor of its monthly publication Third World Resurgence. He has led TWN since its inception in 1984, advocating on behalf of citizen groups throughout the developing world on a wide number of development issues. These include environmental sustainability, the protection of human rights and the impact of corporate-led globalization. A former economist and university lecturer, he is also an advisor and consultant to a number of United Nations agencies and other important international bodies. Dr Khor is author of several books on WTO reform, international trade and the global economy.
Recently we have globalization of policy making and that’s the most important aspect of globalization today. In the past the poor countries or developing countries were able to make their own policies. Of course, some of them may have made mistakes along the way, but by and large they have the flexibility and the space to determine on their own what kind of policies they wanted in economic and social spheres.
But since the debt crisis of the mid 1970s, about 80 to 100 developing countries have come under World Bank and IMF policy conditionality in order to avoid debt default. And since 1995, countries that trade in the WTO system have also come under many policy obligations and constraints, not only relating to trade but a whole range of issues like intellectual property rights and so on.
So today the developing countries are put in a straightjacket or a framework within which they have to operate, and this constrains what they are able to do in terms of economic and developmental environmental policies. And unfortunately many of the elements of the IMF, World Bank policies and many elements within WTO policies have made it difficult, or even impossible, for them to have certain policies that they require for their economy to grow in the right way. And this is a major problem that we are now seeing when you talk about the present economic paradigm. The paradigm has been created and set by a few people actually, and the developing countries have had to follow. So what we need is to really break, to re-examine this paradigm because evidently it has not worked for the majority of developing countries, and to change the framework, or extend the framework so that the countries are able to have policies of their own and they could then institute what policies are suitable to them.
— Martin Khor