SOMAVIA: Globalization has created victors and victims. There is a growing feeling that the world economy is like a pillar that needs to be strengthened carefully, with special emphasis on social development. It is described as putting a human face on the global economy. And that was precisely the message of the 1995 Social Summit. The summit concentrated on three core issues: poverty, unemployment and social disintegration. And obviously employment is the first step out of poverty and the first step away from social disintegration. So in terms of the message of the summit, employment was at the core of it. The trickle-down theory is not working.
The Social Summit did two things. It confirmed the conventional wisdom of the 1980s, in the sense of saying we need open societies and open economies with private-led capital development. We need economic stability, low inflation and the liberalization of trade. The summit stressed the importance of the information revolution. It also said that the benefits of globalization were not being distributed in an adequate way–that consequently we run the risk that the notions of open societies and democracy and open markets begin to lose legitimacy because [the benefits] aren’t reaching enough people.
To solve some of the problems of globalization, we need to re-evaluate state institutions. There mustn’t be too much government interference in economic affairs. But we should acknowledge that there is an important role for government in the proper functioning of the market.
Have world leaders adequately followed up on the pledges they made in Copenhagen?
What has happened is that you have a much more heightened political awareness of the need to put social development into the picture and to put the needs of people much more at the center of things. That’s the real change. The Asian and Russian economic crises have accelerated this consciousness.
It’s not something that’s going to happen overnight. But I think that in the world business community the need to think about this issue in positive terms is much stronger than before. Look at health and safety in the workplace: you can see it as a cost or as an inducement to productivity. Investment in training and education: you can see it as a cost or as an upgrading of the skill and knowledge level of the people in your company–and consequently a contribution to productivity. So what I perceive as things that were seen as costs in the past tend more and more to be seen as a contribution to a better firm and to better bottom-line results. In the future, better income distribution will be seen in the same light.
Obviously not. But we have the experience of the industrialized countries, in which the social pillar was progressively incorporated into the national economy. Our challenge now is to do the same with the global economy. But we’re not proposing something that we don’t already know about, given the example of the way in which industrialized countries developed their own societies. It has been done. We have to expand it toward the rest of the world with different methods in different regions.
The challenge before the world community is to blend an understanding of the problem with policies that produce less poverty and more social cohesion.
By focusing our resources and energies on four strategic objectives: (1) to promote fundamental labor rights, including freedom of association, freedom from discrimination, the abolition of all forms of forced labor and the progressive elimination of child labor; (2) to create greater opportunities for decent employment for men and women everywhere; (3) to enhance the coverage and effectiveness of social protection for all, and (4) to strengthen the dialogue between governments and various constituencies engaged in promoting social development.
