The newly appointed Secretary of State for International Development outlines her hopes and aspirations for the Department.
David Ransom: Aren’t all national governments now too weak to intervene effectively in the global economy?
Clare Short: First, I have to say something about globalization. I think talking about stopping it is like trying to stop the industrial revolution and keep feudalism. History is moving. The world economy is reordering. This is a fact of history. But the question of how it is managed and controlled, and how the fruits are distributed, is completely open to human intervention. So, working to understand it and get clear ideas about how we make sure its fruits are distributed fairly between nations and within nations, and that there aren’t lots of excluded people, is thecrunch issue of history now.
DR: So what is the role of national government?
CS: National governments of all kinds across the world, rich and poor are feeling confused. Yet it isn’t true that we can do nothing. We know from last year’s UNDP Human Development Report that, at any level of GNP, a country can be massively more or less unequal. [The Indian state of] Kerala is an example where, at a quite low level of income per head, the infant-mortality, life-expectancy, literacy rates and so on are making a much higher quality of life. So, although we are seeing governments behave in the face of globalization as though they have to allow inequality to let rip in their societies, that is not true.
Secondly, globalization is managed by international institutions there are questions about how well. The UN system and the IMF and the World Bank are all multilateral institutions run by the governments of the world. The management of globalization depends on their success. They are the actors. But we’ve got a time-lag problem. The sort of sovereignty over economic development that nation states used to exercise alone can now apart from the degree of social inequality within a nation much less be exercised alone. There has to be collaboration between nations. We could tame this beast of globalization, we could use it well. We could have a period of great advance. The danger is we won’t, because there’s so much muddle around.
DR: Wouldn’t these institutions say that the role of government is not to achieve greater equity but to make markets work better?
CS: No. The World Bank has changed. It’s not advocating total liberalization any more. It’s saying the state has a role. No longer do we want omnipotent states that want to be adored. Nor do we want market adoration, which is what we’ve had for the last 20 years. We want sensible use of markets and an efficient state that makes sure that the whole citizenry is included; that sets the economic conditions that allow economies to prosper; that regulates markets, banks and commerce so that they’re not corrupt, so that there’s a chance to get sustainable economic growth and deliver the essentials of human development the education, clean water, sanitation and basic healthcare to every single one of their citizens.
DR: What is the role of democracy?
CS: You can’t get the kind of public services and human development that we have to have to stop the world being so unbalanced that it will be fantastically dangerous for everyone in 50 years’ time without including people in how those services are run. There’s no other way of doing it.
DR: Isn’t globalization itself the cause of greater inequality?
CS: I’m not sure that it is. We’re living at the end of monetarist ideas and the belief that inequality was positively good for you, that it would create much more wealth, which would ‘trickle down’. They have failed. They didn’t produce more wealth and it didn’t trickle down. Now they are being rejected by all the big international institutions, one by one. Globalization and liberalization are not the same thing.
DR: Is it realistic to expect significant change within the next five years in policies like structural adjustment?
CS: Yes. I’m now the British Governor at the World Bank. It’s not a question, of course, of saying, ‘We are Britain and we’ve come to tell everyone what to do’, but of looking for the best thinking, the best analyses and forging alliances with those who are trying to carry that through. I’m very keen on the targets that the world has signed up to; halving the levels of poverty by the year 2015. I want to get them incorporated into the management structures of the World Bank. That’s what development banks are for.
DR: Isn’t one of the difficulties that there’s no real political weight behind international issues in this or any other country?
CS: Well, no, I don’t think so. After all, the decision has been made here to establish my Department and have it headed by a Cabinet Minister. The commitment is there to reverse the decline in aid spending. The commitment is there to allow the Department to have a say across trade, agriculture and so on, to try and get coherence into our policies. The leadership of the World Bank, the IMF, the regional development banks is changing. It’s a time of opportunity.
And it is not the case that you either take care of poverty at home or you’re concerned about poverty abroad. Capital can now move so rapidly that it can use the low wages of workers in the poorest parts of the world against workers in the developed world. And is doing it. There is now an absolute interest amongst American workers who are seeing their wages going down and down in standing up for some basic rights for labour in the poorest and most depressed countries of the world. It’s more true now than ever that the jobs of workers in the developed world can move tomorrow to cheaper labour unless we set in place structures that give basic rights to labour across the world, and workers look to protect one another.
DR: Do you sense not just that you’re being listened to but having some effect?
CS: I think a lot of people hear the optimism and think: ‘I hope that’s true’, and ‘it might be true’. But they’re not sure. If people aren’t convinced, if they’re scared, things will get worse. If people are convinced, we can do it.