T Mbeki: Vietnam Institute of International Relations on Africa
Day

25 May 2007

"Globalisation and related matters"

Acting Director-General of the Institute of International Relations, Mr
Nguyen Quang Chien
Your Excellencies, Ministers and Deputy Ministers
Your Excellencies, ambassadors
Distinguished guests
Ladies and gentlemen
Comrade and friends

The topic I was asked to focus on has been addressed extensively almost
everywhere including, I am certain, here at the Institute of International
Relations.

Writing about the period between 1848 and 1875 in his book, 'The Age of
Capital' historian Eric Hobsbawm says that, "An enormous amount has already
been written about the 19th century and every year adds to the height and bulk
of the mountain ranges which darken the historical sky."

The same can be said about the fact that so much has been written on this
matter of globalisation, some good, others not that good, that "every year adds
to the height and bulk of the mountain ranges which darken the historical sky".
Indeed because of the 'darkened historical sky' at times when we analyse the
current era and in a sense try to illuminate the 'darkened historical sky', we
fall prey to the seduction of the glitter of the modernity of the current
conjecture and begin to believe, wrongly that this is a self-contained period
which can be tidily separated from other historical epochs.

So seduced, we may even convince ourselves that nothing lies beyond this
self contained period and as Francis Fukuyama boldly proclaimed at the
beginning of the 1990s that this is "the end of history and the last man".
Fortunately real history is more dynamic, durable and complex to come to an end
merely because one ideology, in this case neo-liberalism, seemed to have
vanquished rival ideologies.

I therefore approach this topic on the assumption that there is a general
understanding of the dialectics of history, that what is happening now has
germinated from the seeds of the past and that in turn this period will leave
its positive marks into the future and for us from the developing countries
this will be like flowers that sprout and blossom as winter gives way to the
sunshine of spring.

Often, we use the term globalisation without dissecting its meaning and in
many ways we have seen those who have political and economic power in the world
using the term to justify actions that benefit this small section of humanity,
thus engendering strong opposition from the oppressed and the marginalised.

Accordingly, we have a situation where the powerful and the marginalised
would agree on the elements that constitute globalisation but disagree on the
advantages and disadvantages of the phenomenon.

Classical theorists such as Adam Smith, David Ricardo, Karl Marx, Frederick
Engels and others engaged in a huge effort to analyse the complexities of a
changing world, characterised by industrialisation as well as the globalising
nature of that phenomenon.

Indeed, the phenomenon of globalisation is not new. It appeared in different
forms at various periods of history.

Among others, Karl Marx spoke about this phenomenon during his time. In the
Communist Manifesto, Marx said: "The discovery of America, the rounding of the
Cape opened up fresh ground for the rising bourgeoisie. The East-Indian and
Chinese markets, the colonisation of America trade with the colonies, the
increase in the means of exchange and in commodities generally gave to
commerce, to navigation, to industry an impulse never before known and thereby
to the revolutionary element in the tottering feudal society a rapid
development."

"Modern industry has established the world market for which the discovery of
America paved the way."

He continued by saying, "The need of a constantly expanding market for its
products chases the bourgeoisie over the whole surface of the globe. It must
nestle everywhere, settle everywhere, establish connections everywhere."

"The bourgeoisie has through its exploitation of the world market given a
cosmopolitan character to production and consumption in every country. To the
great chagrin of Reactionists, it has drawn from under the feet of industry the
national ground on which it stood. All old-established national industries have
been destroyed or are daily being destroyed. They are dislodged by new
industries, whose introduction becomes a life and death question for all
civilised nations, by industries that no longer work up indigenous raw
material, but raw material drawn from the remotest zones, industries whose
products are consumed, not only at home but in every quarter of the globe. In
place of old wants satisfied by the productions of the country, we find new
wants, requiring for their satisfaction the products of distant lands and
climes. In place of the old local and national seclusion and self-sufficiency,
we have intercourse in every direction, universal inter-dependence of
nations."

"(The bourgeoisie) compels all nations on pain of extinction to adopt the
bourgeois mode of production, it compels them to introduce what it calls
civilisation into their midst, i.e. to become bourgeois themselves. In one
word, it creates a world after its own image."

I have quoted at length this passage from the Communist Manifesto because
Marx gives a clear description of the nature of globalisation in the era of the
capitalist mode of production and consumption.

The globalisation that we are engaging today is a phenomenon that has
evolved in a process of qualitative historical changes that have brought about
the hegemony of the capitalist mode of production and consumption on a global
scale.

Although socio-economic interaction on a global scale goes back to
antiquity, the difference with this phenomenon in the capitalist era is its
pervasiveness and depth, reaching the most remote corners of the world as well
as radically uprooting the traditions, cultures as well as social fabrics and
systems everywhere.

Because of the avarice and the insatiable appetite to amass as much profit
as possible and dominate markets, capitalism has to use all means possible
including military conquest so as to 'nestle everywhere, settle everywhere and
establish connexions everywhere'.

This insatiable appetite and the concomitant aggression to satisfy it led to
the colonial and imperial invasions of vast areas of land in Asia, Africa and
the Americas.

Accordingly, whether in Vietnam, South Africa or Chile we see how
historically and adapting to the local conditions, the bourgeoisie has been
able to give a cosmopolitan character to the capitalist mode of production and
consumption.

Both before and after Marx, the globalisation of economic relations
benefited the rich and the powerful. Initially this powerful and rich group was
almost exclusively confined to the colonial lands. For instance early in the
20th century the economist John Keynes explained the exotic lifestyles of the
British when he wrote in his book 'The Economic Consequences of the Peace'. He
said, "The inhabitant of London could order by telephone, sipping his morning
tea in bed, the various products of the whole earth in such a quantity as he
might see fit and reasonably expect their delivery upon his doorstep, he could
at the same moment and by the same means venture his wealth in the natural
resources and new enterprises of any quarter of the world and share without
exertion or even trouble in their prospective fruits and advantages. Most
importantly of all he regarded this state of affairs as normal, certain and
permanent except in the direction of further improvement and any deviation from
it as aberrant, scandalous and avoidable."

(P7, A Future Perfect, J Micklethwait and A Wooldridge, published by Crown
Publishers, 2000)

One of the central elements ensuring that the Londoner enjoyed that exotic
life was the quick movement of products. The phone, the steam engine, the
telegraph and the advent of electricity ensured that products could be easily
ordered 'from the whole earth', whatever quantity as might have been fit could
easily be carried and delivered at his doorstep.

Clearly, the telephone, steam engine and electricity radically changed the
means and pace of communication among people and between countries.

Today the rich have become richer and more extravagant while billions of
people continue to live in misery, a point succinctly put by the then
administrator of the United Nations Development Programme (UNDP), Mark Malloch
Brown when he said, "In large parts of the world inequality is increasing, both
within and particularly between rich and poor countries. Our Human Development
Report estimates that the income gap between the fifth of the world's people
living in the richest countries and the fifth in the poorest was 74 to one in
1997. This is up from 60 to one in 1990 and 30 to one in 1960.

"The international development goal of halving poverty by the year 2015 is
receding fast. Of the six billion people on our planet, an estimated 2,8
billion are struggling to survive on less than two dollars a day. And 1,3
billion live in absolute poverty, surviving on less than one dollar a day."
(Mark Malloch Brown at Columbia University, School of International and Public
Affairs, 25 October 1999).

As in the past periods, a critical feature in the capitalist mode of
production and consumption is the speed with which people, products and ideas
move. While the means of transportation is still very critical and central in
today's society, what has clearly made a decisive change is the speed with
which information flows and the quality of such information.

This radically faster movement of information derives from the development
of computer technologies, ensuring rapid computing capacity based on
digitisation and the almost instantaneous transmission of information by
digital signal processes through radio, satellite or fibre optic cables that
have brought about a real revolution in the realm of communication as well as
the dissemination and use of information and knowledge.

Although these technological advances are the continuation and modernisation
of old technologies, it is their pervasive reach, their qualitative and
quantitative impact on the socio-economic conditions and relations of people as
well as their profound ability to supplant established social and cultural
systems that distinguishes them from those of the past.

Again, as we know, all major technologies strongly influence both the means
and the structure of production and this has certainly been the case with these
modern technologies. Certainly, the majority that Malloch Brown spoke about are
excluded in this communication and information technology.

So, what do all these mean to us, as the people of the South?

Globalisation is a fact of life. There are a number of challenges facing us
developing countries. Among them is the impact this phenomenon has had on areas
such as:
* domestic industries
* trade between the developing countries and between the developing and the
developed countries
* local cultures
* the nation-State and sovereignty.

Chairperson, throughout history the rich have always been defined by the
large amount of resources at their disposal. This is still the case today. One
of the distinct features of the modern globalised economy is the growth and
rapid national and trans-national movement of capital. Among other things, this
has resulted in trade in money coming to represent much larger values than
trade in goods.

The consequent ability of short-term capital to cause serious crises in the
real economies of many countries, as happened in the Association of South East
Asian Nations (ASEAN) region in 1997/98 has been discussed extensively.
However, the availability of these large volumes of capital in the world
economy also signifies the possibility to increase investment in the real
economies of countries, drawing on accumulated global savings, as Vietnam has
done and is doing.

The process of contemporary globalisation has also been accompanied by the
further concentration and centralisation of capital, leading to the emergence
of mega-corporations that play a dominant role in their sectors. We see this
process continuing everyday with regular news of mergers and acquisitions
leading to the creation of more and more multinationals in various sectors such
as banking, pharmaceuticals, automobiles, oil and gas, information and
communication technology (ICT), electronics and other sectors regarded as
highly profitable.

Because they look for maximum returns, many of these multinationals have
developed new methods of production that help to define the nature of the
globalisation process. Accordingly, it is important to understand some of the
behaviour of these multinationals which has a profound impact on developing
countries as they try to build strong and competitive economies. Let us take
just one aspect of the operations of many multinationals which is what is
called 'intra firm trade'.

Today, many multinational companies that are domiciled in the developed
countries of the north also have a strong presence throughout the world,
especially in the developing countries. In many instances these companies
account for a large part of their home countries' international trade and are a
critical part of the integrated global economy.

The Organisation for Economic Co-operation and Development (OECD) Economic
Outlook of June 2002, commenting on the topic, "Intra-industry and intra-firm
trade and the internationalisation of production", observes that, "The growing
'internationalisation' of production systems which increasingly involve
vertical trading chains spanning a number of countries each specialising in a
particular stage of production, is an important feature behind the changing
nature and increasing scale of world trade."

And William J Zille in his 1997 paper says that, "Cross border transactions
between affiliated units and multinational companies account for a major share
of United States (US) international trade in goods. In 1994 these transactions,
commonly referred to as 'intra-firm trade' accounted for more than one-third of
US exports of goods and for more than two-thirds of US imports in goods."

"Intra-firm trade plays a critical role in the operations of multinational
companies, it may help the multinational company to reduce the costs of
distributing goods abroad or of acquiring inputs from abroad or to integrate
production processes on a global scale. Intra-firm trade may respond
differently than trade between unrelated parties to changes in economic
conditions, for example, it may at least in the short term be more insulated
from competitive forces in particular markets or from overall changes in
prices, exchange rates, or general economic conditions."
(http//www.itcilo.org/actrav/actrav-english/telearn/global/ilo/multinat/usintr…)

This aspect of globalisation, the intra-industry or intra-firm trade, where
different parts of a product are produced in different countries has a number
of benefits for multinationals companies, as mentioned above. In many instances
these benefits are to the disadvantage of the economies of the developing
countries.

Through this phenomenon, the multinational company is able to utilise
cheaper labour especially from the developing countries even when this labour
is of higher quality than that in their homeland. The company is also able to
reduce costs as indicated by Zille and because of its dominant position, the
possibilities are remote for the emergence of new firms that would compete
effectively and thus be able to attract business away from the
multinationals.

This has a direct impact on domestic industries as well as on the
possibility of the developing countries to develop local competing companies.
In many instances, this undermines any chance that these countries might have
to embark on a process of substantially developing their economies. The net
effect of this is the perpetuation of old economic relations that are tilted
strongly in favour of the developed countries of the north.

Further as developing countries we have to compete with an economic
globalisation that invades cultural patterns as Sukomal Sen observes. He says,
"Worldwide proliferation of internationally traded consumer brands, the global
ascendancy of popular cultural icons and artefacts and the simultaneous
communication of events by satellite broadcasts to hundreds of millions of
people at the time on all continents are visible marks of economic
globalisation invading the cultural arena. Some feel that the most public
symbols of globalisation consist of Coca-Cola, Madonna and the news on CNN.
Whatever the casual and practical significance of this phenomenon, there can be
little doubt that one of the most directly perceived and experienced forms of
globalisation is the cultural form." (http://www.cpim.org/marxist/200002-marxist-culture-ss.htm)

In this regard, the rich and the powerful create a world after their own
image and use the power of a globalised media to project this image as that of
an ideal, civilised and normal human being after whom we should all aspire. We
know from our own experience coming from developing countries that it is an
intellectual dishonesty to suggest that to be civilised is to mimic foreign
cultures and denigrate those of our indigenous people.

Again we have often heard bold predictions that globalisation will weaken
and even destroy nation-States. Some of those who try to use the phenomenon of
globalisation to ensure the withering away of the state so that the market can
rule supreme, are themselves beneficiaries of strong states that laid powerful
foundation for the private sector to thrive.

While there are elements of the phenomenon of globalisation that seem to
weaken nation-States and threaten the sovereignty of many nations, this should
be seen as a challenge to work together and use the many positive aspects of
globalisation to strengthen governance both at the local and international
levels and use economic integration to promote, rather than suppress the
interests of nation-States.

Chairperson, many political and economic analysts, theorists and
practitioners would agree on what constitute the basic elements of a globalised
world. But given the fact that these may proceed from different vantage points,
there would be different interpretations of the advantages and disadvantages of
globalisation as well as the course of action necessary to ensure that this
phenomenon benefits all human beings, especially the poor and marginalised
citizens that populate mainly the developing countries.

The rich and the powerful from the developed world, who 'must nestle
everywhere, settle everywhere, establish connexions everywhere' may see the
phenomenon of globalisation as an important platform from which to increase
their wealth, entrench their power and through this perpetuate the all round
subjugation of the poor regions of the world.

To those of us from the developing countries, globalisation must clearly
mean the opportunity to leapfrog our countries into the critical stage of
development and therefore defeat poverty and underdevelopment while resisting
foreign cultural domination and retaining our political and socio-economic
independence.

Together, we have the duty to ensure that our people enjoy a better life.
One of the things we have to do to achieve this objective is to forge strong
south-south partnerships that harness our comparative advantages in this
globalised world and among other things, utilise our capacities to change the
trend whereby most developing countries are the exporters mainly of raw
materials.

Chairperson, as we know today, the 25 May we celebrate Africa Day, a day of
historical importance on the calendar of the African continent.

We are very happy to celebrate this day with our comrades in arms, here in
Vietnam because our bonds were forged in the bitter struggles to free our
people from the daily brutalities of oppression and repression so that these
masses could also have the possibility to live a better life.

I am indeed very happy that there have been very important engagements
between our two continents as well as between Vietnam and Africa on what are
called comparative lessons and mutual opportunities. This is a desirable
development because there are many things that we can learn from one another so
that we are able to put our countries on a sustainable development path.

The African continent is presently engaged in a comprehensive process of
regeneration with the objective permanently to end the vicious cycle of
political instability, poverty and underdevelopment.

In this regard there is increased unity and readiness to act for the
betterment of the continent through the African Union (AU). There is also
visible movement to accelerate the socio-economic transformation of all our
people through the New Partnership for Africa's Development (Nepad). At
different levels of society there is a sense of urgency that we have to address
the myriad of challenges facing our continent.

The vision of the African Renaissance and the programme that emanate from
it, has translated into practical measures that include the need to strengthen
partnerships so as to:
* accelerate regional and continental political and economic integration,
strengthen the regional economic communities including the involvement of the
private sector and civil society,
* help to entrench good governance, improve macro-economic frameworks for
development and deeper integration, improve trade among ourselves by among
others, eliminating barriers to intra-regional trade, this is based on the
understanding that regional integration is central to our efforts to increase
market size, ensure economies of scale and the maximisation of comparative and
competitive advantages so as to attract more investors,
* accelerate physical integration through massive infrastructure
development,
* work for the peaceful resolution of conflicts as well as prevention and
management of conflicts. It also includes peacemaking, peacekeeping and peace
enforcement as well as post-conflict reconciliation, rehabilitation and
reconstruction.

As part of improving good governance on the continent, there is visible
progress in entrenching democracy and already many countries have made major
advances in terms of establishing democratic dispensations. Indeed many more
countries are working for political inclusiveness across regional, ethnic,
religious and racial divides at same time creating new ways of involving all
citizens in the political processes.

Further a large number of our countries have improved their public
financial, management and accountability systems, running smaller deficits,
improving fiscal transparency and creating institutions and arrangements for
better auditing of public funds.

We are indeed proud that many countries on the continent have adopted Nepad
as an instrument to advance people centred development. Nepad has detailed
programmes of actions within specific time frames and has, as one of its key
pillars, the democracy and political governance initiative. In this regard the
African Peer Review Mechanism (APRM) is one of the most innovative aspects of
Nepad.

The APRM is an initiative to which Member States accede voluntarily. It is a
monitoring mechanism that helps the participating countries to conform to
agreed political, economic and corporate policies and practices. Participation
is open to all AU Member States and so far, 26 States have joined.

Chairperson, we share with you these programmes because we are convinced
that together we should form partnerships that would ensure that we tap for
instance into your own rich experience of economic development.

We need this strong partnership so that we can learn from our brothers and
sisters here in Vietnam who, over the past 20 years experienced a positive
economic renewal which has resulted among other things in industrialisation,
economic growth and reduction of poverty and increasing eradication of poverty.
This has helped this country to achieve a high annual economic growth rate,
attracted record levels of foreign direct investment and substantially
increases exports. I understand that this process has helped Vietnam to achieve
the Millennium Development Goals ten years early.

Indeed, there are many invaluable lessons that we should learn from the
people of this country. One of these critical lessons is the manner in which
this country has navigated the globalisation terrain and managed to locate
itself within this process to generate the necessary benefits. I am saying this
because, among other things, this country has managed to attract significant
flows of foreign direct investment, drawing on the accumulated savings in the
global economy which I mentioned earlier without exposing itself to the danger
of short-term capital outflows that would damage the real economy.

As an example of this, in February this year, it was reported that Vietnam
would see a sharp increase in foreign direct investment in 2007 with spending
on new projects rising by 17,6 percent according to the government. Phan Huu
Thang, director of the country's foreign investment agency said government
expected overseas companies to spend $16 billion in Vietnam this year.

The prediction came as another proof of the increasing positive standing of
the country among foreign investors following Vietnam's ascension to the World
Trade Organisation (WTO) this year.

Clearly Vietnam has some lessons that she should share with other countries
of the south. Our co-operation in different critical fields such as economic,
scientific, cultural and policy formulation and implementation should not end
in seminars and workshops but should include a practical aspect which involves
both public and private sectors.

It is indeed important that Africa learns from Vietnam's experience
especially in agricultural development, food security and hunger eradication
because these are some of the central challenges in our own on-going efforts to
defeat poverty and underdevelopment.

On 17 July 1966, the outstanding champion of the struggle for liberation in
this country Ho Chi Minh said, "nothing is more precious than independence and
freedom".

Today we should in the same spirit of Ho Chi Minh say that, "nothing is more
precious than the defeat of poverty and underdevelopment" because this must be
the outcome of the independence and freedom to which Ho Chi Minh referred.

It is this precious independence and freedom that must help us to work
together for the urgent reform of the multilateral institutions especially the
United Nations (UN), World Bank, International Monetary Fund (IMF) and others
for the successful conclusion of the Doha Development Round for the end to the
Iraq, the resolution of the Israeli-Palestinian conflict and the negotiated
settlement of the dispute involving Iran's access to the peaceful use of
nuclear technology. Indeed because nothing is more precious than independence
and freedom, we in Africa are doing everything in our power to bring to an end
the conflicts in Darfur in Sudan and in Somalia as well as support the peace
process in Côte d'Ivoire.

The resolution of all these challenges is central to the attainment of a
prosperous world where all of humanity would enjoy a better life.

Chairperson, during the height of the Vietnam War, an American singer Billy
Withers expressed through song the fear, hopelessness and innocence of many
ordinary soldiers who were sent to fight here in Vietnam to wage a war of
aggression they did not understand. A young soldier who was shot on his right
shoulder asked a friend to send a message back to his family in America and
lamented that, "I can’t write left handed. Would you please write a letter to
my mother? Tell the Reverend Harris to pray for me, Lord, Lord, Lord. I ain't
gonna live, I don't believe I'm going to live to get much older. Strange little
man over here in Vietnam, I ain't never seen bless his heart, ain't never done
nothing to, he done shot in me in my shoulder."

Today Vietnam and Africa need soldiers of peace and development. We need
from the developed countries of the north partnership that would help us as we
accelerate this process of development so that we can all reap the benefits of
globalisation. In this regard we are in the fortunate position that Vietnam has
shown and is showing all of us practically what can be done to ensure that
globalisation does indeed benefit all humanity.

I would like to take this opportunity to thank the government of Vietnam and
Mr Nguyen Quang Chien, acting Director-General of the Institute of
International Relations, for giving us the opportunity to celebrate the 44th
anniversary of Africa Day here in Hanoi.

Thank you!

Issued by: The Presidency
25 May 2007
Source: The Presidency (http://www.thepresidency.gov.za/)