New Internationalist

The Brandt Report And After

Issue 104

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BRANDT REPORT [image, unknown] Keynote

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New Internationalist
Issue No. 104: Guest Editor, Brian Wren (Third World First)
Co-editors, Wayne Ellwood and Christopher Sheppard

The Brandt Report and after
The West has again been roused by a convincing call to conquer world poverty. 'North South: A Programme for Survival', issued by an influential body led by German ex-Chancellor Willy Brandt has slowly gained respectful international attention. The Report has already prompted a summit of world leaders later this month. But will all this really aid world poverty? Guest editor Brian Wren of the UK group Third World First asks what lies behind the Report and where it leads.

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Photo: ILO

THE BRANDT REPORT has had a mixed reception. Published in March 1980, it had record sales in Britain, was fiercely debated in Tanzania, ignored in Canada and unobtainable in Mexico. In the US it was eclipsed by the Soviet invasion of Afghanistan, the Presidential election and the Iran hostage affair.

In Europe, the Venice summit of Westem leaders four months after publication gingerly promised it ‘careful study’.

The Report has been most firmly championed by the liberal/social democrat centre — politicians, journalists, academics, aid lobbyists and church leaders — with withering critical volleys from the Left and Right. For the moment, the major result is a 48-hour meeting of 22 world leaders in Mexico this month.

The summit itself is likely to end up as just another international talk-shop. Despite that, the Brandt Report remains important. It dominates the world development landscape and is a rallying point for supporters which critics cannot ignore.

Yet, for a reputedly earth-shaking document the Brandt Report offers little that is new. Like its 1969 predecessor, Partners in Development, the Brandt Report comes from a small group of notables headed by an ex-Prime Minister (Canada’s Lester Pearson in 1969, West Germany’s Willy Brandt in 1980). The Pearson Report was sparked by World Bank chief Robert McNamara. So was the Brandt Report a decade later — though it was financed and published independently.

Pearson had seven colleagues: top politicians, civil servants, bankers and UN bureaucrats. All were men, only two were from Third World countries. Brandt had 17 commissioners — including one woman, one trade union leader and ten from the Third World. Again, most were drawn from the top levels of politics, civil service, banking, business and the UN.

But there are deeper similarities. Both reports describe an interdependent world where millions live in unimaginable poverty. The leaders of Europe, North America, Japan and Australasia have most power to act, yet seem reluctant.

Across an 11-year gap, both reports sharpen the same spurs to goad them on. Pearson called on ‘enlightened self-interest’ because moral obligations don’t go far enough. Brandt appeals to ‘a commitment to international social justice’. Mutual interests alone, he says, won’t help the poorest countries and the poorest people.

Their priorities may differ, but the basic reasoning is identical. The arguments are aimed not at the poor, but the privileged. They call for just enough action to satisfy the well-fed and prevent upheavals which might threaten their wealth and comfort. Both reports imply that social change comes from above — from governments, technocrats and tycoons — not from peasant leagues, community groups, trade unions and village co-operatives.

The Pearson Report’s main focus was more and better aid. It also stressed the need for more private investment and action on the Third World’s mounting debts.

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Pearson and Brandt: the same mould
Photo: Camera Press

By contrast, the Brandt Report casts a wide net. Ecology, energy, food, health, jobs, housing, migration and land reform chase a dozen other topics across the page.

But in the end the key recommendations zero in on debt, aid and trade. What’s new about the Brandt Report is not its world view but the world it tries to save. The changes and upheavals of the last decade make 1969 seem light years away:

Oil and Debt. In 1973-4 the oil-exporting countries (OPEC) quadrupled the price of crude oil. Suddenly for the first time the balance of economic power had tilted slightly towards the developing countries.

But for non-oil exporting Third World governments the picture was far less rosy. The price of imported Western manufacturers increased dramatically while their earnings from exports of raw materials stagnated. Added to increased petroleum prices, the double burden vastly inflated Third World debt.

By 1980 interest payments alone absorbed 32 per cent of Brazil’s export earnings, 29 per cent of Argentina’s and 21 per cent of Turkey’s. Every month the shadow of default looms larger and longer.

No one knows exactly what would happen if Brazil or India refused to honour debt payments. But there would certainly be chaos in the world financial community. According to economist Michael Lipton, ‘Bankruptcies would echo, not perhaps around the world’s banks, but around businesses and ’third party’ countries relying on loans from them.’

World Money. Although the mighty dollar lost its ‘good-as-gold’ status during the 1970s, the US held its grip on world finance. Washington still appoints the World Bank President and controls 21 per cent of the Bank’s voting power. Western nations control decision-making in both the Bank and the International Monetary Fund. IMF intervention in Third World countries has been increasingly resented as politically biased in favour of ‘free enterprise’ and multinational capital.

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Bolivian tin miners: Brandt implies social change comes from above not from peasant leagues and trade unions.
Photo: Henning Christoph

• Multinationals and Growth with Poverty. Multinational corporations (MNCs) strengthened their hold on the world economy. MNCs now control between a quarter and a third of world production and one-third of world trade consists of exchanges within such companies.

To borrow economist Richard Barnet’s analogy, the multinational company is like a giant. The brain lives in skyscrapers in New York, London, Frankfurt and Tokyo. Blood is capital, pumped through the system by global banks. The world’s financial centres are the heart, while the hands reach out into Third World for cheap labour to make goods mostly for sale in industrial countries.

In the 1970s, MNC investment helped make Hong Kong, South Korea, Mexico, Brazil and other newly industrialising countries (NICs) into the developing world’s success stories.

But poverty and inequality also increased. In Brazil, a 1975 survey found 70 per cent of the population without access to public sewage and half without running water. A Brazilian Catholic Justice and Peace survey in Sao Paulo found that the country’s frenzy of giddy growth has led to higher infant mortality and increased malnutrition among the poor.

South demands, North delays. Third World governments demanded a ‘New International Economic Order’ (NIEO) and tried to squeeze trade and aid concessions from the West. The 1974 United Nations Special Session proposed OPEC-style associations of raw materials producers and nationalisation of multinational companies.

But Western governments fought back and kept control. The USA proposed a $10 billion fund to underwrite the debt burden of the poorest countries. There was only one drawback. Countries which stockpiled their commodities in the hope of driving up prices would get nothing — even though higher prices would help to pay off their debts.

The 1980 UN Special Session tried to re-open negotiations on the NIEO. The Third World pressed for an open debate in the General Assembly, with one nation one vote. Western leaders argued that the issues should be separated and dealt with by UN Specialised Agencies — most of which the West dominates. The negotiations deadlocked.

Looking back on the decade, Tanzania’s President Nyerere described such moves as ‘a tactic to gain time, divide us and talk us to death’.

In these critical areas, the Brandt Report is patchy. Western governments are urged to be more sympathetic to Southern ‘NIEO’ demands — for stable commodity prices and lower trade barriers. And rich world governments and international institutions are called on to underwrite loans by private banks — to protect the banks as much as their borrowers. The Report also hints vaguely at ‘greater participation’ by Third World nations in the World Bank and International Monetary Fund. Yet it prefers to ignore demands for their democratic control.

The Report also talks earnestly about ‘codes of conduct’ for multinationals which would leave three-lane loopholes and protect corporate freedom to move profit and capital across national frontiers. Greater food production is stressed without enquiring how food is distributed — and who grows what for whom.

In short, the Brandt Report views the world economic system as basically sound in wind and limb — with just a few badly-pulled muscles needing treatment. It ignores evidence that global ‘interdependence’ is an unequal tussle where some gain and most lose.

As a result of these shortcomings some large development organizations, like Oxfam-UK, are beginning to look critically at the Report. The agency questions the bland assumption that Third World governments naturally represent the interests of all their citizens — rich and poor alike.

‘In our experience this is a fundamental mistake. Rich people anywhere are anxious to avoid upset, commotion, revolution. They defend the status quo, not build the power of the poor,’ says Oxfam.

In an unequal society growth feeds inequality by enabling the rich to increase both their relative wealth and power over the poor. The ‘mutual interests’ seen by the Brandt Report do exist, but they are mostly between the elites of North and South and against the interests of ordinary people — industrial workers, shanty-town dwellers, landless labourers and subsistence farmers.

To alter the balance, pressure is needed from below and from outside. ‘The wealth of a nation is in its people’, sald Victorian social pioneer William Morris. Says Oxfam, ‘We suspect that if the human potential is released, the economic will follow. We doubt if the reverse is true’.

An alternative to Brandt for many Third World countries is to aim at ‘self—reliance’ and try to break free from the unequal world order of ‘free trade’ and multinational domination.

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Testing pumps in a Bahrain oil refinery: 'Orderly and predictable' price rises for OPEC oil are stressed by Brandt to stabilise the global economy.
Photo:
Camera Press/Tom Sheppard

Whatever their imperfections, self-reliant — and socialist — strategies must be considered seriously. They all put ’human capital’ first as the basis for a fully developed society — fundamentals like land reform, primary health care, basic literacy and grass-roots participation in government.

Such strategies are meeting stiff opposition from a US administration haunted by ‘Cold War’ spectres. From this viewpoint, self-reliance means Communism. And Third World socialist governments and movements are lookalike robots programmed by the Kremlin.

In such an atmosphere, the Brandt Report’s nostalgic glow of consensus, dialogue and harmony is tragically redundant. For all its effort to place development outside the nasty realm of politics and class interests, the Report is incomplete — becausethe choices are political — as political as Brandt’s own endorsement of free enterprise with gentlemanly restraints.

In the ‘North’ we can best begin by asking how to change our own government’s policies to make Third World self-reliance more possible. If the Brandt Report had addressed that question, it would have served a useful purpose.


For a further discussion see Third World First’s Beyond Brandt — An Alternative Strategy for Survival (232 Cowley Road, Oxford, 0X4 1UH, UK).

A Brandt Primer
A summary of the major themes and proposals of the Brandt Report.

Trade: The Report urges price stabilisation of Third World commodities (coffee, tea, rubber, etc.) at ‘remunerative levels’. Rich industrial countries must loosen their grip on commodity processing and marketing, remove tariff and other barriers to Third World manufactured goods and widen present trade concessions.

They must also ‘adjust’ — i.e. move into new high-technology production, let their uncompetitive industries die and retrain or compensate those affected. The Report is against any measures by the industrial North to protect its products against Third World competition.

Multinational Corporations: The Report wants to regulate the operations of multinational corporations by negotiating 'codes of conduct' agreed by governments of North and South. Such codes would cover disclosure of information, ethical behaviour,
labour standards and recognized abuses like transfer pricing (price markups to disguise profits).

Corporations would also be guaranteed freedom to repatriate profits, dividends and royalties. Nationalisation would be subject to ‘international mechanisms’ to agree on ‘fair compensation’.

Money: Third World governments should have more say in the Western-controlled World Bank and International Monetary Fund. Conditions attached to IMF loans should be less stringent — particularly cut-backs on health and welfare. In addition, the lion’s share of new Special Drawing Rights (a type of international credit note) should go to Third World governments.

Aid and Debt: Rich countries should increase their government aid to 0.7 per cent of GNP, preferably by 1985. Other proposals include a World Development Fund financed by international taxes on trade, arms sales and seabed exploration and democratically controlled by member-governments.

‘Massive resource transfers’ are needed from the industrial North so Third World governments can keep paying interest on their debts, especially debts to Western banks. The Report urges developed nations to do this in their own interest, to prevent default causing bank collapse. Loans are preferred to grants, though it hinted that some debts be written off. More loans should go towards general development programmes, instead of being tied to single projects.

Oil and Minerals: As known oil supplies dwindle the West is desperate for more oil to buy time to develop energy alternatives. So the Report wants a new organisation to underwrite oil company exploitation costs in the Third World and woo reluctant oil companies suspicious of Third World governments. To this ‘energy affiliate’ it adds a call for a global energy-research centre.

‘Orderly and predictable’ price changes by OPEC are stressed to help both North and South. The Report also wants ‘assured levels of production’ so the West need no longer fear cut offs in supply — the ‘oil weapon’.

The Report also wants more finance for mineral exploration to meet Western needs for metals like copper, chrome and bauxite. Such a move would also prevent Third World governments being exploited by old-style mining concessions on the basis of finder-takes-all.

Disarmament: The Report wants more public awareness of the arms race, stronger efforts for East-West detente, disclosure of arms exports, research into alternatives to arms production and renewed attempts to prevent nuclear proliferation.

Hunger: Hunger and malnutrition must be abolished says the Report. Its remedies for the 800 million ‘absolute poor’ include aid for increased food production in the Third World, an emphasis on projects that attempt to reach the rural poor, an international grains agreement and larger global emergency food reserves.

The Report hopes Third World governments will improve food distribution by tackling land reform and urges them to expand social services and primary health care.

The Poorest Countries: An extra $4 billion per year in aid is asked for to assist the ‘poverty belts’ in sub-Saharan Africa and Asia where most of the world’s poor live. Aid programmes should cover basic needs like health care, agricultural development, industrialisation and re-forestation.

Migrant Workers and Refugees: The Report calls for inter-government agreements to guarantee fair treatment of migrant workers. The world’s ten million refugees (of whom four million are in Africa) need legal protection, rights of asylum, and aid for resettlement.


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