Susan George, a Franco-American economist and political activist, President of the Observatory on Globalization in Paris, has come to Moscow to convince Russia not enter the World Trade Organization. Or at least to delay the country’s entry. She explained her position in an exclusive interview for the Russkiy Mir portal.
– You are an ardent opponent of the WTO. Why?
– I am not against economic order, but I am against the entrenched economic order in which transnational corporation in cohort dictate the rules of the game to the world. Russia still hasn’t signed up and theoretically could oppose these rules or at least influence them. But once you enter the WTO, your country will lose all its advantages.
– But it will acquire the rights of an independent player on the world market.
– As the history of your negotiators has shown, that’s not likely. Talks on joining have been going on since 1995. Their current results are such that you are being forced to accept the previous results of agreements with other countries, which are positioned as “starting” points. But these agreements were reached 15-20 years ago. In essence, you will have to radically reduce industrial tariffs; implement the 122nd law in monetization of benefits, which sparked mass protests on the first attempt; privatize service, including utilities provision, which will lead to an increase in shut downs of electricity and heating during Siberian frosts; reform education in such a manner that free education will practically disappear. These measures are already being carried out by your government, as the minimal set of things that must be carried out to enter the WTO. The minimal sacrifice. After all, the member countries accept the rules of the game, for example, with regard to innovation. But in order for competition to stimulate innovation, the entry shouldn’t be so fast, as the state should keep some protections in place. Because if this takes place immediately, the WTO will push Russia toward spontaneity, which means the economic system of the country will be wiped out.
– More than 15 years of negotiations – can this really be considered spontaneous? And the negotiations are being carried out by experts who are interested in protecting the domestic market from being taken over by competitor.
– The story of with the IMF, when your experts borrowed money and did not know what the IMF is, and now all Russians have felt its grip while paying off the debts and interest, has convinced the world that many of your experts are really not experts. And the situation with the WTO negotiations working group is similar. It is headed by one of the Russian oligarchs, whose interests within your market practically coincide with those of the transnationals, as they as a part of them. Lexei Mordashov, Vladimir Lisin, Vladimir Potanin – back in May 1998 convinced the Russian government to adopted WTO conditions with regard to the new version of the labor code. The most important amendment was an easing of the rules for firing workers without the agreement of unions. So instead of independent labor unions you got separate unions created by company management. In this regard, even before entering the WTO Russia stopped being a third world nation and became infected with the viruses of the developed world.
– And you consider the most important “virus” to be the refusal of transnational corporations to pay taxes on the transfer of capital. What would such a tax change?
– First of all, this tax was proposed by the American economist and Nobel laureate James Tobin. In essence it entails placing a tax of 0.1% on all speculative transactions on exchanges and spending this money on the social needs of the Third World. Experience has shown that the lack of such a tax has led the world to an attempt to reallocate spheres of influence, which has manifested itself in worst of ways, such as the terrorism of Al Qaida, behind which stand countries and corporations that have been deprived. By the way, transnationals are reducing their aid to the Third World. In 1990 this aid totaled $20 billion, in 2004 – $12 billion and in 2010 – $10 billion. At the same time the debt of Sub-Saharan Africa is increasing at a rate of $25,000 per minute.
Opponents of the Tobin tax assert that its introduction would not only halt the movement of capital but also slow the development of the world – the economic crisis of developed countries would be catastrophic for developing countries. But that is the opinion of the monopolist transnationals. My opinion the monopoly of transnationals is taking on the signs of a catastrophe for all – the third world, trying to escape poverty, is moving to the US and Europe, which are paying for this development through September 11 in New York, bomb blasts in London and Madrid, riots in Paris.
In France they have finally created a commission to consider the possibility of introducing a tax on transnationals. At the initiative of this commission, the issue was brought up for consideration at the UN. The idea of the tax has been supported by Brazil, Spain, Chile and Peru. In total 110 countries have supported it. The issue is currently being further developed.
– If such a tax is introduced, then Russia will have all the more reason to join the WTO?
– Opposition to the tax will be powerful. If Russia selected a tactic of gradually negotiating advantageous conditions for its entry, then it could indirectly help bring us closer to such a tax. However, the developed countries which influence the weather in the WTO are rushing Russia as a newbie. Although the WTO is not a rigid structure but rather a series of agreements on trade and services, intellectual property, finance, etc. You can sign both bilateral and regional agreements which would allow you to preserve freedom from pressure from the WTO. With regard to the Third World, you are in a stronger position and can offer something. The US and EU are patently at a disadvantage. So why join? Look what China did? It held negotiations with one partner after another prior to opening its doors to the WTO. You have resources, a highly qualified workforce; sometimes you are considered part of Europe, sometimes – part of the developing world. And that is your strategy. But by entering the WTO, you put yourself in the position of a Third World country.
– And what exactly is this position?
– You will be able to get up off your knees onto which you have fallen economically speaking, but they won’t let you fully stand up. It’s just not advantageous.
– As an ardent anti-globalist, do you support the performance tactics of anti-globalists which often grow into destructive riots in those cities where the G8 and G20 meet?
– I am categorically against violence and riots by anti-globalists. Our movement – alter-globalism – is in favor of a common tax on transnationals. We are in favor of civilized methods of opposition and are against all disorder.
– But do you see at least some advantages from entering the WTO for Russians?
– The most favored nation trade states is attractive. But Russia inherited this regime from the USSR. I don’t think there will be any changes on the domestic market. The alignment of powers has more or less taken place. During the transition period, you won’t feel anything good or bad. Perhaps just the bankruptcy of certain industries, for example, the automobile industry. Exporters aren’t going to see higher tariffs for their products.
Following the transition period, you will get what the newbies get, such as the case was with the Baltic state, Georgia and Moldova. Industrial output will decline; unemployment will hit the levels of 1992; salaries will decline. In the US from 1980 to 2010 salaries declined 15%. The second phase will be incorporation into the WTO – profitable industries will be removed to Third World countries where labor costs only pennies. Thus the workers of developed countries will lose their income, and Third World countries working for pennies will not receive technologies with the exception of “screw-driver” assembly. That’s how transnationals behave in Moscow. The entire elevator system of your capital is maintained by OTIS, which pays its maintenance workers 12000 rubles a month – a little more than in Third World countries. And that’s what you should expect in the WTO – life that is a little better than Sub-Saharan Africa.
Vladimir Emelyanenko
