SUNS  4306 Wednesday 21 October 1998


DEVELOPMENT: ACTIVISTS CASTIGATE INVESTMENT PACT PLANS

Paris, Oct 20 (IPS/Angeline Oyog) -- Groups opposed to a global pact on investment are stepping up efforts to stop negotiations from being moved from the Organisation for Economic Cooperation and Development (OECD) to the World Trade Organisation (WTO).

Critics of the proposed Multilateral Agreement on Investment (MAI) fear that if the talks are moved to the WTO, developing countries would not be able to resist pressure from rich nations to accept the pact.

They say the pact would give transnational corporations unrestricted and unprecedented privileges over nations and peoples and ruin national economies.

The negotiators in the OECD process are meeting this week at its headquarters in Paris to discuss the MAI, six months after talks were suspended for further evaluation and consultation. The US is opposed to efforts to water down the MAI and has effectively suspended participation until the draft pact is reinforced again.

The OECD will decide on the fate of the MAI, which the OECD says should restore the confidence of investors by establishing clear and transparent rules.

"We are against the MAI (being discussed) at the OECD," said Martin Khor of the Third World Network. "We are against the MAI at the WTO even more. There will be a semblance of negotiations with and participation by developing countries. But experience has shown that the WTO is not democratic and not transparent."

The Third World Network is one of the delegations from some 15 countries which have gathered in Paris since last week to prepare an international campaign to lobby the governments. They want the to stop the transfer of the talks from the OECD to the WTO, and then to bury the talks completely.

They have been joined by French social movements for the homeless and 'undocumented' migrant workers.

"The social movements in France have understood that beyond the exclusion and the marginalisation of people in France, they have to look for the causes of their poverty. Millions are affected by neo-liberal policies," said Jean-Claude Amara of the Droi ts Devant! (Rights First!).

Under the MAI, states and governments would be forbidden to require international investors or multinational corporations to hire local personnel, to put up headquarters in the areas where they are operating, to transfer technology and from putting a cap on the repatriation of foreign capital and profits. According to the drafters, the agreement was intended to ensure that foreign investors and foreign corporations would receive fair treatment from the local governments.

But opposition to it charge that it would knock down national sovereignty as foreign corporations could not be required to respect national legislation. Social and environmental problems therefore could be aggravated.

Mark Valianatos of the environmental group Friends of the Earth-USA explained the conflict between the MAI and environmental protection. The accord, he said, could hasten the already alarming rate of deforestation and the disappearance of the world's rem aining virgin forests.

To protect the forests, he said that governments could screen the foreign timber companies and choose only those with records of sustainable operations.

But such screening would be a violation of the MAI terms. Governments could also demand the respect of local environmental protection laws or that part of the profits be re-invested in the local community. But doing so would open them to charges that the y were putting the foreign companies' profits in jeopardy.

According to the Observatory on Globalisation, one of the groups leading the opposition to MAI in France, the agreement is more than just about protecting only productive investments, as in manufacturing and in the services.

Today, investments, particularly financial flows, are less to create wealth and more about appropriating it for certain social classes and countries.

A number of the participants in the meeting of opposition groups in Paris pointed to the currency crisis in Asia that have ruined national economies in a matter of a few months. They say the tumult in Russia and Latin America only underlines the trials t hat can be triggered by neo-liberalism and globalisation -- and how much worse it could be under the MAI.

As an example, Khor of Malaysia explained how a "devious mechanism" sparked off the crisis in Asia. He explained how a hedge fund of four billion dollars collected by millionaires was used to borrow Thai bahts from the banks.

The bahts were then sold and bought back by the Thai central bank to preserve the exchange rate. The buying and selling of the Thai baht went on until the central bank's foreign reserves were depleted and until the baht's value collapsed to half its value before the speculative operation.

Before the devaluation of the baht, Khor said the investors owed $20 billion. But upon devaluation, they owed only $10 billion.

"The MAI says you can't stop the money from leaving the country. So why would we want the MAI?" He said Malaysia took some measures to stop speculation on its currency. But all these would be illegal under the MAI.

"At the WTO, four or five rich countries make the decisions and get other countries to obey them," said Khor. But it is not simply a question of where the MAI ought to be negotiated.

"It is not a question of where you want your cancer to be, whether you would prefer to have it in your lungs or in your stomach or in your brains. If the MAI is concluded, the lives of millions of people will be doomed."