Capitulos Special Edition 1996 SELA 1

Capítulos

Special Edition 1996

Globalization as a cultural phenomenon with economic impacts

Julio María Sanguinetti
President of the Republic of Uruguay

The following article is a transcription of the recording of President Sanguinetti's participation in the Panel on ŤThe Multilateral Trade Agenda and Latin America and the Caribbeanť, held in Montevideo, Uruguay on 24 October 1996, in the framework of the XXII Latin American Council of SELA.

I feel like Paganini performing works by Liszt, that is to say having to make variations on the same themes. I do not believe we can do so on this occasion and I believe it would be more agreeable to try a new score.
From our different origins, we are here today making a similar response which is centred on four or five factors, all of them substantive and all of them equally transcendent.
I am simply going to make some variations on these themes. Ricúpero speaking of the phenomenon of globalization told us that we are in a new stage of the process which began 500 years ago. Of this there is no doubt. Five hundred years ago occurred what a great French geographer has called the Ťplanetary jumpť. With the discovery of America, the world became aware for the first time that it existed as such, and human beings took material possession of all that we call Earth in a process that is associated with a great expansion of trade.
Since then we have lived through different stages of globalization. We left behind what we call the Middle Ages, which was basically the age of closed, local societies based on the soil, isolated from each other. A cultural change began and what is happening today is still a cultural change.
I believe globalization can be seen from two perspectives:
The first is a fundamentally cultural phenomenon and, consequently, an economic phenomenon. Why? Because globalization comes from science, not from the economy. Globalization is the result of a combination of intellectual factors that have produced a scientific revolution equal to that which 500 years ago led to the invention of the caravel. But the caravel -what seems to us a nutshell in which Columbus heroically reached America- was a technological marvel which replaced the enormous galleon. The galleon could never have crossed the Atlantic Ocean as Columbus did because it was always liable to sink during the crossing. The caravel was a product of the highest technology of its age which was, in turn, the result of the geometric advance of mathematics as expressed in all the arts and sciences of the epoch. The same thing is happening today.
Historians, who explain and enlighten us a great deal, sometimes confuse us because, the need to divide up history into periods and segments, makes it impossible to explain the fluidity of life as a consequence of history, because life is like a river. How can we explain it? The river has to be altered in order to halt its flow for an instant, photograph it and say this is a river. However, it is not a river since the river is an unstoppable flow of water. Life is the same, history is the same.
The historians confuse us because they say that the Middle Ages began on such day, at such a time; the Renaissance began on such a day, at such a time. And one day, when the Cold War ended, they told us globalization had begun. What happened is that we were enveloped in a great political-ideological conflict and when it ended, we realized that a scientific revolution had taken place which had changed the modes of production and had brought about a phenomenal cultural change. This is the great event: Homo sapiens was transformed. Just look at a photograph of a street in Tokyo, taken at the start of photography, and then look at another taken today: we have to look twice to be sure that it is not New York.
Homo sapiens has now become globalized in his habits as a result of his demands. This is the economic impact of globalization, because we all want the same thing: the same video, the same television. The Homo sapiens of today could be called Homo collaginens. We dress in the same styles, we drink the same beverages, we have the same habits. Every Sunday, all over the world, we watch the same football match, all of us in front of the same apparatus watching the same programme. This phenomenon then has economic consequences, because it generates demands that are totally different from those generated in the past. Naturally, this has also caused the national state to enter into crisis, because an isolated state is more secure. The state can provide its citizens and companies with security but it cannot provide the levels of consumption that today's citizens demand. It is impossible today to have a hospital that does not have magnetic resonance equipment. Perhaps this is debatable from the point of view of healt policy, but it is a fact. And the consequence of this cultural phenomenon is that we find ourselves in a process of globalization.
What is important is that globalization is a fact. It is not an ideology. We cannot transform what is a fact into a position from which to interpret all the events that happen in the world, by assuming that certain parameters or elements of globalization constitute an ideology. That is a false transfiguration of reality and a deadly trap in which we cannot allow ourselves to be caught. That is what happened to Freud with his followers, and to Marx and Adam Smith. It is an ideologization of something that is a fact. A scientific, economic and political fact. The ideas must come from deciding how to deal with this fact, which is producing such fantastic consequences.
In 50 years, production has increased five times and trade 15 times. This is a very important qualitative fact. Just as in the Middle Ages, society was based on the soil, and in the Industrial Revolution on the manufactured product, today we are faced with other phenomena became trade and along with it money and capital have increased 15 times. In other words, capital has increased infinitely more than production. What this means is that wealth is not simply a physical and material product.
Just consider the fact that the richest person in the world is a young man who made his fortune in ten years without producing a single sheet of paper, only intellectual products. This is the symbol of the new economy, which has generated a new situation for society.
What significance does this have? It is a break with the traditional forms of production. It is a phenomenon that has to be dealt with by each country. We cannot go on producing as before if the outcome is the phenomenon of unemployment all over the world, even in Japan. In Germany, a demonstration by jobless people was almost unthinkable until a short time ago because the new situation is breaking down traditional mechanisms of production. Other factors are leading us now. We have a better allocation of resources, more people have access to more things, there is a much greater growth dynamic, but we have this breakdown in traditional phenomena.
There is a second point, also of enormous transcendence. Because of the need for competition, the power of nation-states has been greatly limited, fundamentally in their capacity to contribute. Previously, the nation-state had very broad limits, a certain impunity if you like, to set tariffs and taxes with which it then developed its programs. Now, however, if taxes are raised, the country can no longer compete because its exports become uncompetitive. This is the start of the process that leads to the reform of the state, but the same problem arises. We find that the search for competition brings with it inevitable social consequences and a need to adapt to our times. Out of this come the responses.
Antunes tells us that globalization has not excluded the regional blocs. This seems to me to be another important fact. On the one hand, we have a universal globalization that generates mechanisms and habits: we switch on the TV, we see the same things, we hook into the Internet. (Yesterday I was talking to a friend from a Spanish newspaper who told me: Look, I have so many newspapers at my disposal but what most enthuses me is that I have 15,000 readers on the Internet. I commented: But they don't pay you. His reply was that it is simply a fact: I have 15,000 readers on the Internet.) These things are happening, indisputable phenomena.
On the other hand, the countries are forming blocs. Even the largest economy in the world, the world's only military superpower -the United States-, is forming associations such as NAFTA in a bid to expand its space. In other words, this is a different kind of attitude: not everyone is transforming globalization into ideology and saying Ťnow that globalization has come we are all global, we are all in the global village of communications, the global village of trade, the global village of industry, and the global village of cultureť. This not the case. For some reason e are all joining clubs to differentiate ourselves.
Hence, the need for a response in our region. The integration process, far from disappearing, is taking on a new vigour in our region. That was what we felt in 1985/1986 when we began to build MERCOSUR, not to resist the old integration process but to accelerate it in our region. In the framework of a progressive liberalization and association in Latin America, we felt the region could move forward more quickly because we were together, neighbours with much in common. It was on this basis that we decided to go forward by adapting to the structure of ALADI and then to the structure of trade. It is no coincidence that the Uruguay Round was born here. We would like to stress that. It was the first time that the old GATT had met outside Europe. In the government at that time, supported by our neighbours, we felt that the debate was going to be the debate of the end of the century (or the debate of the new century, because in 1989 the new century had already begun) and that we had to be in the vanguard of that debate and not bringing up the rear. We had to try to lead the liberalization process, stimulate it and be in it right from the start.
We did not assume the attitude, as we said, of transforming facts into ideologies or the anti-historical attitude of denying the phenomena that are occurring around us. This was how, after so many debates, a new structure for trade was born. This is the perspective from which we have built our regionalization. It is not a mechanism of neo-isolation. On the contrary, it is a mechanism for a new form of integration with the world.
We are content with these results. Our action now in the case of the World Trade Organization is to insist on compliance with what has been agreed. Seade tells us that today's protection mechanisms are not comparable with what they were in the past. In fact, they are not comparable in any sense. They are not comparable in quantity or in quality, because they are saying different things.
In the past, when there were textile restrictions in Europe it had a certain meaning, because here too we had a very powerful, protected textile industry, as did Colombia in those extraordinary years. The same thing occurred in Brazil with cotton. It was another world. Today when one comes up against a restriction on textiles in the developed countries it has another meaning. It means that our textile industry - which in any of these countries employs now only half or a third of the work force it used to because the industry that has survived has had to undergo intense technological renewal and lose many jobs - is denied the conditions for expansion because of a restriction by a developed country. Naturally this is something we cannot accept, because it would mean that not only are we unable to be in high technology, but we cannot have an advanced textile industry, which would be very serious.
The same thing happens in agriculture. Restrictions on agriculture are much more serious now because we are no longer trying to sell subsidized wheat, or subsidized soya, or subsidized barley. We are all competing.
Consequently, it is not possible that we still have to confront this kind of situation today when the issue is not to sell more or less but to survive or to die, which makes the problem qualitatively very different. The value of a restriction today is infinitely greater than the value of a restriction 30 years ago when a 30% tariff could be countered by one of 80% and in the end we neither bought nor sold. We hardly talked. We were incensed and took our grievances back home, Today it is different, a restriction for our countries is the capacity to live or die. It is different now. It is much more serious.
Countries such as ours, which do not possess the world's military might, have more than ever to put our faith in international organizations, in their strength, in their capacity to be the fervent custodian of international agreements.
And to continue nourishing the world of ideas, the world of knowledge that today continues to energize and mark the dynamic.
Hence a humanist view such as that of Moneta is what should inspire us all. Ideological reductionism has cost the world too much. Reductionism of race brought us nazism, reductionism of the state brought us fascism, reductionism of social class brought us communism, the economic reductionism of recent years has led us to very serious situations of social inequality even in the rich countries.
It is fundamental, therefore, that we take a global view, because globalization is global and because the transformation the world has undergone is cultural, in order to ensure that the life of these new Homo sapiens - the Homo collaginens of which I spoke - is not reduced to standardized soft drinks and fashion but continues to assume the enriching diversity of life.
Out of this process comes the role of the states, the World Trade Organization, and the Ťres publicať - as the Romans called it - in the regulation of the Ťres privadať which the dynamic has to provide for us. But it is the Ťres publicať, or the organized community, which has to set the rules of the game, and the purpose and goals of civilization.

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