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In
search of a development model for T&T
Effects
of globalisation
By
Dr George Dhanny
PART III
In Finland, the public system has produced very economically
the services needed by the whole society, and particularly
by those who could not afford to buy them from the open market.
The public sector thus constitutes a huge buffer zone in the
national economy, both as provider of jobs and services and
as creator of demand and purchasing power.
As a result of decades of systematic policies and work for
welfare and equality, Finland has become one of the most wealthy
countries in the world with a highly equal distribution of
wealth.
A long-term assessment report published in 1997 indicated
that in the 25 years “income disparities have declined
not only between people, but also geographically between the
regions of the country. Income levels of people have been
about the same whether they live in the centres or peripheries—urban
or rural areas.”
The current trend of privatisation poses a threat to what
have been achieved to date. The availability of service will
depend on demand; services will disappear from areas where
the population is more sparse, less wealthy and more needy.
Even the quality of private services varies according to their
price; those who can pay more get the better services.
Finland’s phenomenally developed welfare and service
society has come under increasing pressure. Since the early
1990s by the liberalisation of capital transactions which
meant that private companies gained new leverage and Finland
had to progressively open its economy to international competition.
The globalisation process in Europe has taken place under
the auspices of the European Union. Finland gained membership
in the EU in 1995, but before it could qualify it had to adopt
austerity measures in keeping with the requirements of the
European Economic and Monetary Union (EMU).
These requirements have served as appropriate excuses for
demands to dismantle the welfare state. The EMU requirements
have served as a disguise for the interests of business entities.
Thus the liberalisation of monetary traffic and trade, added
to the pressure of the globalisation process, have deeply
affected Finland’s economy.
“Power
relationships in the society have changed dramatically. National
governments and parliamentary systems have been intimidated
in circumstances where power is internationally centralised
within the European Union structures and increasingly transferred
to commercial structures which do hot recognise any democracy.
“Deregulation
has given full freedom of operation to business companies
and competitiveness and cost-effectiveness have been made
a rule not only in business but even in hospitals, schools
and universities. These rules have resulted in a very high
unemployment rate in Finland.”
In the Finnish context, these new rules have had a negative
impact generally on:
The power relationship between corporate employers and trade
unions have become very different from what they were before;
the corporations derive their strength from their international
capital base and the expansion of their operations, but the
workers and trade unions are in the unemployment trap and
can only adopt a defensive posture. Even consensual arrangements
are being eroded.
Women have seen this development as a backlash against equality
and democracy. Cuts and public savings have particularly hit
the interests of women, both in the social services they need
and the jobs they hold in the public service institutions.
Thus the big issue for the future of the welfare society is
not about a lack of resources, but about the terms and conditions
of the neo-liberal rules of globalised trade and economy!
Not only Finland, but the whole developing world is once again
faced with the old conflict between capital and labour, in
truth, between capital and people.
Today, in any discussions on welfare systems—their liability
and options can hardly be meaningful without an understanding
or reference to the economic history of the countries concerned.
As the history of Finland and other Nordic countries have
shown that:
Great advances were achieved in people’s lives simply
by the work of an assiduous and committed group of women on
a massive scale.
The constructive interplay between capital and labour created
the prerequisites for constant economic growth and socially
conscious distribution of increasing wealth.
It provided the framework for broad political support to and
democratic legitimation of the necessary legislation for social
development.
Within recent years the UN and the international community
have been shocked to witness increasing poverty and disparities
between countries in the rich North and the crushing burden
of want, hunger and disease in the South.
Notwithstanding valiant efforts by the international community
through various world conferences such as the World Summit
for Social Development in Copenhagen and the more recent Monterey
Consensus in Mexico in 2002, poverty, disease and hopelessness
are devastating many countries, including the continent of
Africa.
There must be an explanation for this unhealthy situation.
It may well be that the chief players in the game are not
looking at themselves and their current policies.
It is obvious that poverty is not a single separate malaise
which can be eradicated without dealing with the discrepancies
in the world economic system, the policies of multinational
corporations and the strong economic power of the dominant
states.
Failure to deal with these constraints will give the lie to
the genuineness of the efforts by the international community
to eradicate poverty and disease in the developing world.
Clearly, the need is not for further globalisation of trade
and commerce. The real need and challenge to the powerful
North is to fashion policies in favour of equality and justice
in economic relationship at all levels.
There is need for policies and measures for making the rich
countries and global corporations accountable to the international
community and people world-wide.
They must feel obliged to take a share of the responsibility
for the future well-being of all the peoples of the world.
Creating welfare is not a business, but a human necessity.
In order to achieve this transformation, there is an obvious
need to fashion a new kind of social contract on a global
scale between capital and people, ie, a contract which will
guarantee that a fair share of the mind-boggling profits of
the multinational corporations is allotted for the common
good and welfare of all the peoples of the world
The writer acknowledges his indebtedness to a case study on
Finland by Hilkka Pietila in the 2001 United Nations Development
Programme publication on social policy
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