The front cover of a recent National Geographic magazine has a picture of a lonely tree in a sea of soybean in what was a formerly Brazil rainforest. Another picture inside depicts a family of native Indians walking through the charred remains of their rainforest homeland.
Such pictures paint sad story of wholesale globalisation. Multinational corporations (MNCs), attracted by cheap land in Third World countries, invest millions of dollars in host countries creating billions of dollars for their shareholders (normally residing in First World countries). In the process, they rape and denude the land, the environment and the native inhabitants.
They pay paltry taxes to their cash-strapped host countries, bribing those in power to circumvent the local laws. Our Malaysian multinationals are no different, look at the accusations leveled against them by environmentalists as well as the Indonesian government on their operations in Kalimantan and Sumatra.
Europe, the US and Japan only preach free trade when it suits them. How much has Japan opened up its rice and beef markets? Do astronomical prices of Kobe beef and Koshihikari rice reflect a free market? Are the banana wars between the US and Europe over yet? Why is China dragging her feet over revaluing her yuan?
Yes, in general, globalisation and free trade are good. But only if the rules are fair and the terms of trade equal to all sides. At the moment this is not so. A few things have to be rectified first before we jump into free trade bandwagon.
- Currency of reference has to be stable, and does not unfairly benefit any particular country, eg the US.
So what is wrong with US dollar as a world currency? Well, to sum it up, at the moment the US can print money to the tune of US$60 billion to US$70 billion then use that to obtain goods and services without actually doing or producing anything.
- Malaysia (and other countries in the same league) must improve its law enforcement, environmental law provisions and human rights law provisions to be on par with Western countries. This is so that the rogue elements of this world won't be able to rape and plunder the resources of our country with impunity. Those officials who are in cahoots with them by being bribed should be taken to court and penalised as well.
Penalties should not just stop at the company or management level. Shareholders, too, should bear some of the penalty. This will ensure responsible investing.
- A minimum wage and safety net are a necessity if we want to implement free trade. Having a safety net means that MNCs can choose the best employees and not feeling guilty if they have to fire anyone. It also lessens the risk of social unrest during an economic downturn. We would give the image to the world that we take care of the less fortunate in our society, and income is (more or less) evenly distributed.
- There must be free movement of the labour force and goods across national boundaries. Just like the Europeans have done within their European Community.
These are only some of the criteria that we should think of before opening our economy fully to free trade. Feel free to add more.
Free trade would mean that some jobs would move to other countries as we become less competitive in some areas. Our padi farmers, rubber tappers and fishermen might find it difficult to make a living, and may have to sell their land to make way for housing and factories.
In general, the poor would become worse off and will have to change their lifestyle, hence the need for minimum wage and a safety net.
Take the example of the native Iban from Batang Ai. They have been uprooted from their land and villages to make way for a dam that supplies electricity for Sarawak. They were 'fairly compensated' with a wooden house and a small piece of land.
Soon our padi farmers and rubber tappers would be in this same predicament thanks to free trade and globalisation.