The high-profile Ministerial summit of the 135-member World Trade Organization (WTO), which regulates the codes governing international trade, ended abruptly in a fiasco last week in Seattle amid an unexpected din of protests within and without the convention halls.

Internally, the Third World nations rebelled against what they saw as their exclusion from key talks dominated by the US and Europe. Economic globalism, they pointed out, was being worked by the industrial states in a manner that rendered the rich richer and the poor poorer.

Externally, a motley mass of tens of thousands of protesters, some dressed as turtles and some topless, shouted their demands that trade officials pay heed to the possible effects of their decisions on the environment, labor, public safety, health and human rights. To appease the Third World delegations, WTO officials promised to work out a scheme for involving all members in all major decisions. The conference collapsed before this promise could find a concrete, workable form.

In the last summit of trade officials held in Uruguay in 1986, many participants had kept yawning during sessions, and only a handful of interest groups had bothered to attend. This time the non-governmental organizations, mostly anti-WTO, which had registered and did show up exceeded 2,000!

Why so much of interest, so much of protest? Evidently, the crux of the problem has been overwhelmed by the colorful protests of environmentalists fearing the extinction of green sea turtles, or the labor unions fearing the loss of jobs of their members owing to low pay of labor in the Third World making their products cheaper to import.

Events in Seattle bring in sharp focus the ill effects of the global economy, generally referred to as ‘globalization’. The WTO, which came into being in 1993, is the chief regulator of this system of international trade.

The collapse of the Soviet Union gave an unprecedented boost to the concept of free trade(laissez faire) and free enterprise with an unrestricted access to all world markets. The advance in information technologies, particularly the internet, and the fast means of transport of goods and services, provided the tide for the adherents of the free enterprise system to ride on, unrestricted by conventional boundaries, to all parts of the world.

The potential benefits of a free global trading and financial system were constantly projected by the capitalist world convincing the policy makers in Third World countries that the global economy and market forces would set right the weaknesses of their national economies. They embraced the change in good faith and opened their markets to foreign goods and investments in the hope that these measures would promote growth and eliminate the grueling poverty of their people. There was no doubt a noticeable increase in international trade but the benefits were reaped largely by the industrialized countries and by the elite of the developing nations. The status of the common man went from bad to worse.

The elite in the low-income countries generally opted out of national commitment and took as their reference group the elite in the advanced countries. Many, like Benazir and Nawaz Sharif, took advantage of the new system, particularly the currency convertibility, to transfer enormous amounts abroad to buy mansions and luxury apartments. Large sums were also invested in properties and equities to have a steady income compatible with that of the elite abroad. Flight of capital and the consequent fall in the conversion rate of their own currencies became a normal occurrence. Even the foreign exchange accounts of expatriate Pakistanis were pounced upon to service their ostentatious projects and selfish schemes. The developed countries of the West, particularly the US and UK, provide the havens for stashing away the ill-gotten wealth.

Vibrant market forces, it was generally assumed, would generate economic activities, employment and increased income level throughout the world including the low-income countries. What was not kept in sight in such assumptions was the fact that market forces were highly exploitative and had no motive other than profit to pursue. Weak and vulnerable economies could hardly push back the depredations of very powerful and unscrupulous international business syndicates.

Globalization has thus caused the opening up of the Third World markets to the exports of developed countries without a reciprocal movement in the other direction. Pakistan’s Commerce Minister in his speech at the Seattle summit presented quite lucidly this one-way pattern of trade.

If the US could allow free flow of Pakistani textiles to its markets, the country’s perennial problem of adverse balance of trade would come to an end. The existing pattern has, on the hand, caused a net transfer of wealth from the poor countries to the rich thereby aggravating further the disparity between them.

The free flow of money, at the touch of a button, from one part of the world to the other in pursuit of quick profit, caused fiscal havoc in the fast developing economies of South East Asia, in particular of Thailand, Indonesia, Malaysia and Korea. Unprecedented devaluation took place which in effect amounted to transfer of value from these economies to the developed world.

Placing the blame for these adverse developments at the doors of the leaders diluted the ensuing bitterness. Many of them were accused of practicing crony capitalism and indulging in large-scale corruption. But, the intelligentsia soon realized that globalization lacked the magic wand it was assumed to possess. In some countries, Malaysia for instance, there was a strong move for the reversal of the liberalization trend and in favor of protectionism.

The clash of interest was inherent in the very nature of the system: the integration of the national economies into a global economy without a similar integration of political units and nation states into a world state with all citizens enjoying the same rights. This mismatch between the world’s political and economic organization places the leaders of Third World countries in an unenviable position. They have to accept economic dispensations imposed from abroad irrespective of their own commitments to their electorates. One could sense this in the discomfiture of Nawaz Sharif under the pressure of the IMF to impose strict austerity on the one hand and the compulsions of his “heavy mandate” on the other. He lacked the vision or the wisdom to strike a balance between these two conflicting demands. Many leaders of low-income countries face similar dilemma. This is one of the problems inherent in the global economy system.

No wonder the problems generated by the global economy led to the pandemonium at the WTO conference. Dr. Henry Kissinger, a former Secretary of State and a renowned intellectual, had written more than a year back: “Free-market capitalism remains the most effective instrument for economic growth and for raising the standard of living of most people. But just as the reckless laissez faire capitalism of the 19th century spawned Marxism, so the indiscriminate globalism of the 1990s may generate a worldwide assault on the very concept of free financial markets.” The WTO summit witnessed one such assault. The thesis and anti-thesis have taken place. It is now for the world leaders to work out a synthesis by eliminating the evil aspects of globalism and by ensuring a place under the sun for the low-income nations too. That cannot evidently be left to the market forces that do not operate under any moral or humanitarian obligation. The next WTO summit, it is hoped, may witness proposals in that direction.