Nobel Ideas – PART TWO

28 Sep 2004

CP:So you believe that we are all too dependent on the United States as regards these global issues, since if they have a Democrat President there are better prospects but if it someone like Bush it is a disaster. And this type of dependency doesn’t only apply to poorer countries but the richer ones too.

J.S.: The decisions taken by an institution obviously reflect the viewpoints and interests of those making the decisions, that isn’t surprising. Although almost all the activities of the IMF and World Bank are nowadays performed in developing countries, both institutions are led by representatives from industrialized countries, mainly Americans. The IMF and World Bank are not represented by the countries they serve. What is more, there is the fact that economic globalization has developed more rapidly than global democracy and social justice. That has significantly widened the imbalance and is one of the root causes of the problem.

C.P.: In your writings the desire for greater democracy is also extended to the developing countries and you stress the responsibility of the United States, whose economic actions in fact seem to do everything possible to prevent these countries from themselves assuming responsibility for their welfare. I find it very interesting that an American writes these things, because when we say these things in Italy we are silenced for being anti-American. I do not think it is anti-Americanism, in fact we are expressing legitimate doubts about the administration in office.

J.S.: The real anti-American is George W. Bush, who doesn’t provide information about what his Administration is doing and doesn’t even give the names of the people working in it. His actions are against the interests of ordinary people, disregard democratic constitutional principles, as well as principles upholding human rights. The prisoners in Guantanamo Bay are an obvious example, not to mention the mistreatment of the prisoners in Iraq, which we all sadly know about.

C.P.: Bush does not give information about what he does, but he is not the only one. You have made a major contribution to helping people understand how important information is, whether in the context of macroeconomic theories or in current global processes. You press for a change by the IMF and World Bank, since they do not make their decision-making processes public and never allow discussions to take place before they intervene. Do you think the situation has changed since you made your criticisms?

J.S.: The demand for greater transparency has certainly been heard by the IMF, but do you know how they have responded? By improving their website. This was not done so discussions could start and people could participate in a real debate about interventions that should be implemented. It is not a real willingness to be more open. Unfortunately we are faced with the contradictions of public institutions which have unelected leaders and which are not directly answerable to public opinion for their decisions.

C.P.: So real power lies with having information.

J.S.: Yes, and they believe in secrets. Secrecy gives them discretion in making decisions which they regard as crucial but is in no way justified within public institutions that provide public benefits.

C.P.: I would like to know your opinions about the agricultural sector in the United States. Slow Food, working with small farmers around the world, has the impression that there is a huge contradiction in large-scale subsidized agribusiness, there are whole communities which would not be able to compete with developing countries on price, the significant influence of multinational corporations, the vigorously growing organic movement …

J.S.: I feel that our policy of agricultural subsidies has been misunderstood by its supporters. In some sectors it is essential so that rural communities can survive due to their highly specialized production activities and difficulty in reconverting. Some of these communities extended over such a large area that they are as big as a country. In reality however the subsidy policy has turned out to be a waste of resources, a huge budget marked by high economic inefficiency. It mainly benefits a few large farmers and ignores the interests of the small farmers, encouraging concentration, standardization of production and intensive farming practices.

C.P.: Just like Europe, inefficient and wasteful…

J.S.: Yes, and there are two important consequences: first of all the price of land is driven to exorbitant levels, so small farmers without enough capital cannot buy any and have difficulty struggling to survive.
Secondly, to maximize productivity, high subsidies encourage such a large overuse of fertilizers and chemicals that they seriously endanger the environment.

C.P.: Subsidies also encourage the use of GMOs, something that in theory would be perfect for this type of intensive and opportunistic agriculture.

J.S.: This is a much more complicated issue. As an economist, I would point out that economic forces always push towards greater productivity, so GMOs would be an advantage from the producer’s standpoint.

C.P: But from an environmental point of view it creates enormous problems.

J.S.: Speaking as an environmentalist, I would fully agree, particularly in the cases where they are designed to act together with herbicides and other chemical products.

C.P: We have called our October meeting Terra Madre, or Mother Earth. Now I hear that land in the United States is expensive. Land is becoming more expensive and unaffordable everywhere, what do you think about this, given that land is the main resource of small farmers?

J.S.: It is partly a result of growing populations and therefore a lack of land. In addition productivity has greatly increased so land has become more valuable. But I was referring specifically to an artificial increase in prices due to subsidies. The value of this economic support, which feeds through into increases in land holdings, is capitalized and added to the land value. You can therefore say that the real beneficiaries of subsidies are large landholders and not small farmers.

C.P.: Speaking about the serious imbalances generated by global negotiations, a problem that has leapt to prominence is the issue of biopiracy.

J.S.: It is an example of the distortions generated in unbalanced discussions during WTO meetings. I am against this approach to intellectual property, in fact when I was an advisor to Clinton we opposed the TRIPS agreements, both because they are damaging for science and research and because they seriously harm developing countries. Unfortunately American companies exerted strong pressure and overcame the resistance. It is still difficult for sensational cases of theft to occur, in one case a company from Texas tried to patent Basmati rice, but the Indian government managed to block the patent. The situation is much more worrying, however, if it happens to small countries which are not strong or powerful enough to oppose these actions. It is these countries which suffer the most serious injustices due to globalization, we have to intervene so they can manage on their own and not be dependent on rich countries. To do this we have to change the way international institutions are governed and make their decision-making processes more democratic. We shouldn’t reject globalization, it is inevitable, but we should strive for globalization “with a human face.

First published in La Stampa on September 2 2004

Adapted by Ronnie Richards

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