tv Quadriga - Fair Trade How Unjust is the Global Economy Deutsche Welle November 16, 2018 5:30am-6:01am CET
discovery. subscribe to the documentary. a well a very warm welcome indeed to quadriga and this week we're taking a step back from the regular news agenda to discuss a theme that is too often neglected the battle that is to end poverty and economic injustice how can it be for instance that the richest one percent of humanity more than all the rest put together the accumulation of wealth in the hands of just
a few comes at a high price for countless millions of others who toil for a pittance and have little or no access to public health or education systems as a result more and more people are leaving their homelands and risking their lives to head for more prosperous countries like germany so our question on quadriga this week is fair trade how unjust is the global economy and to discuss the topic i'm joined here in the studio by three astute observers and analysts beginning with cohen miscue not a specialist on migration and diversity. foundation he says alongside war and bad governance the inequality of opportunity in global markets is the main factor behind the global migration crisis also with us is alan posner commentator for the burlington v.t. felt alan believes that the main drivers of poverty and i mean gratian war corruption fragile states and bad leaders. no unjust trade relations and
a warm welcome to to rajiv a developments economist at the european school of management and technology for the s. and team also in berlin and raji argues that trade is necessary for prosperity but it is not always just we know all the losers our peril. i would like to begin with you as we've just heard the richest one percent of humanity owns more than the rest put together it's a bewildering figure it's almost unbearable but we do bear it how come how come how how come we are so indifferent i not entirely sure i agree that we're in different ways here that statistic and many if not most listen are these shocking realities sucking realities and we're indifferent to the extent that we're clearly not doing enough to do something about the question really is not that
people in general aren't different but that the people that are in power in terms of policy making are not doing necessarily the right types of things in order to rectify that that imbalance and i'll impose a just we have to take another figure similar to the one i just quoted eight men on the same wealth as the three point six billion people who make up the poorest half of humanity are we are complacent species no we're not look. you in your introductory movie clip you showed people in bangladesh seamstresses and so on i'm wearing a suit a border prime up for fifty euros it was probably i didn't look made in in bangladesh and that's nick so i'm doing my bit actually to help development because bangladesh is a huge success story i don't understand why this should be portrayed as something terrible. ninety percent of bangladesh's foreign income is earned by exporting t.
shirts and suits and what have you to america and they reappear in union and these people are in work there they they have they can they can feed their children being in a certain if you will food chain from the rich world. many european companies are beginning to look at working working conditions on now if you go to the congo which also has a huge population of people. on virtually no income they'd be happy to be able to produce t. shirts for europe on the united states go to almost anywhere in the world i repeat bangladesh is a success story this is what we need to repeat around the world instead of pointing a finger at the fact of seamstresses to little at least she's earning economist kind of what you said it will at all as well says alan i'm not saying all is well i'm saying it's better in bangladesh then it is in four fifths of the developing world. i do boycott companies who produce for very cheap.
one of those companies is which alan mentioned. i'm not sure whether we do good service to those people who work the wage of two to three dollars a day and we have your prices we have cheap prices because we exploit people in certain areas and that's not the only thing the only thing and the other thing is. we also export because of subsidies especially in the early culture much cheaper into this country so other people lose their existence is because of the subsidies we do here and the u.s. and europe so producing cheap. we benefit a lot the people there so i mean bangladesh is one of those shocking examples. you're shaking your head on. the point is that congo except for diamonds nigeria except for oil all these countries in kenya except for cut flowers they're not
producing manufactured goods they're producing raw commodities which are then get into the hands of corrupt leaders. now i'm not playing down the bad conditions of people in bangladesh what i'm saying at least they are part of the world market at least we know about what they're doing because our firms are producing there at least they are producing things it's wrong to point a finger. at bangladesh we should be pointing the finger at the congo nigeria i'm gonna eritrea because these people have. to us in relation to these or yemen these people have nothing and we're taking the the wrong attitude and by the way bangladesh exports to europe without any there's no tariffs zero tariff they can export this is one reason why it's so cheap i think there's something to be said for you know squaring these differences here in the sense that you know alan i
completely agree with you the fact that there is demand for bangladeshi laborers is what allows many of these poor people that we saw in the clip earlier to earn a living in the first place and i don't mean to point a finger at you respect but i think it's a little precious sometimes when. people have a. i'm going to say overly moral stance when it comes to labor standards in developing countries because we don't think hard enough about the counterfactual question what would these people be doing if they weren't working in these factories that being said are the labor standards there in many of these factories in bangladesh i mean running plows are probably the example that we think about most dramatically in recent memory are these conditions acceptable you said earlier about you know are we turning
a blind eye to this and i think yes we are because with all due respect alan we get our cheap suits from there so what rules and you say that you work hard problem what role can we play as consumers i think that if we could somehow couper to meet and this is where you know my point earlier policymakers are people making decisions making coordinated meaningful decisions that we can all. decide that we will not tolerate low wages in all developing countries so it's really a coordination failure. in order helping countries then we will continue to have lower labor standards in one place and you know we boycott close from bangladesh they shut the factories and almost somewhere else because there's no real coordination in terms of labor standards for instance. the european union has several programs coordinated with bangladesh bangladesh not only has a preferential tariff agreement with the european union which means that they can.
sell us the stuff without any tariff which is one of the reasons why it's not so cheap it's not just cheap labor the second re the second thing is we have these these these agreements with the controllers in bangladesh who take who look at work conditions yet we do enforcement is a huge force and i'm all for enforcement and instead of putting either putting the onus on the individuals they boycott this in that country with the results or being utopian saying why doesn't everyone as much as i do which is not going to happen i think going through the i think the european union is doing a very. good job could it be better certainly but we're doing things and it's not publicized enough we have representatives in bangladesh looking at working conditions. but you know my point is not this boycott bigler dish boycott those companies who have undermining conditions for workers you know it is there's
a difference and everything which has been involved in force during the last couple of years is the result of pressure of consumers because we exactly we found out how did the products has been produced there under which conditions and which prices mostly children and women pay for that so we can have your cheaper clothes so i think this is the result and that's what i expect also from no responsibility for what we get cheap here we should also be a responsibility to have better working conditions i mean there is there is a huge danger in advocating things like boycotts when it comes to production i mean let's stick with the textiles example in developing countries you know for instance when there have been such actions in the past what happens is that many of the most vulnerable people women and children move from the tradable sections of the export sector of the economy to the non-treated sector so rather than making whatever
footballs are t. shirts they move into things like extreme example is in prostitution or the sex trade so i think there's that's really i'm not in favor. just once again before we perceive that we were talking about what example for the global trade works we're talking about the example of the textiles industry which produces the fashions that we all including all of where but it is shocking to note however that the c.e.o. of one of the top fashion brands and more in a week the bungling bangladeshi seamstresses in a lifetime as a look at the pictures first men talk. these images shocked the world in april twenty third team over eleven hundred. people died when the rana plaza collapsed in bangladesh the disaster had many causes such as shoddy materials and disregard for human life. the protests did bring some improvements in working conditions but the underlying exploitation is the same virtually no strong unions exist here and to
represent the workers interests responsibility is often passed off to local subcontractors if production gets too costly the buyers will simply go elsewhere the basic resource in this case was cheap labor and starvation wages never change no matter what the price of the garment the lion's share of profits go to the producers and distributors and indirectly to the customers who snatch up t. shirts for three year as a police so how can fans and just working additions be achieved globally. ethical or ethical inst cheap we've made a cult out of cheap we've made an ideology out of change we've made it a global measure we haven't what the. adam smith and ricardo the the founders of modern economic theory they developed the theory of comparative advantage that if you enter into a market you have to something other people don't have right now if it happens it's
not just cheap labor in bangladesh because these people are work you saw them they were working with japanese or chinese sewing machines in factories that were built with concrete and so on this is a this is not high tech this isn't silicon valley but it is not just cheap labor what they have is they have cheap labor they have access to ports they obviously have an organized distribution network and so on and so on so this is quite a complex issue and bangladesh has made has developed as a percent growth on the other hand here this phone was assembled and the parts are made in china just designed in the united states ok apple makes a big profit on it but you know this has had china through stuff like this has managed to lift millions of people out of poverty now. never sit back and say it's great no in china these people don't have any rights is
a communist dictatorship in bangladesh we didn't have unions well let's fight for chinese people to have the right to organize in unions it's support the unionization of labor in bangladesh but for goodness sake let's see that this is the way the world develops is the way europe developed in the back a hundred fifty years ago britain was producing stuff for the world like bangladesh is now that's changed i'm glad that it's not being produced in lancashire anymore it's been there isn't bangladesh and just as the british foreign trade unions the workers in lifted themselves out of public poverty so i would support anyone who says i'm organizing bangladeshi women i course that's the way to do it. and you have any further thoughts on back in isms for glow for redistribution of income. men globalisation i don't have any problem with globalisation because it's creates jobs and of course it destroys jobs so in other places i mean it is it's
a tricky issue because when you build somewhere on jobs you may loose somewhere else and especially for for europeans it's a big issue you know like going out and finding cheap labor. however my my issue is how do you guarantee standers where people have the opportunity. for social mobility for example so they can send their children to schools so they can have a proper health care etc etc so if people if we create jobs somewhere else and it's only for our benefit it doesn't benefit people. when we offshore jobs or companies i don't see any sense in that issue unless we extend. the poverty in those countries and the other thing is we we are talking a lot about exports but we should also tackle the issue of the flooding with
imports sending cheap food for example which has been subsidized here so when we create joe we also destroy jobs over there the recent research in. mexico is that for every one point five million food imports into mexico thirty five lose their jobs and migrate to the u.s. so we also need to tackle not only their export but also our imports or our exports to those countries also destroy their local markets i think that you know the point that you made about i'm an economist right so about trade needing to improve efficiency is a very very important one and this is what motivated the quote that we began with i mean no country has become middle income or high income in a modern age without trade ok so that is a necessary condition but of course just because it's efficient doesn't mean it's
just in that context because you're going to be as you pointed out there are going to be winners and there are going to be losers so i disagree with your statement that we open up trade and this leads to impoverishment in terms of the size of the pie the size of the pie is bigger the question is how that pies being distributed and it would be folly to ignore that distribution within these countries so to say you know to say you know well these people aren't that well although they're better off than they used to be in some ways that's not necessarily going to be good enough in order to sustain great whatever other developments economists what is your opinion on the following question what leads to greater equality in global markets regulating markets or freeing markets up. what leads to i don't know what i don't know entirely what you mean by in equality in global markets. farah chances fair opportunities for produces. manufacturers in the poorest of the
world for me without doubt opening up and the simple reason is that when you had and some economy still are that way but when you let me take the case of india's probably easiest to. exemplify this through a particular country so in that in india until about nine hundred ninety one india was a fairly close to calling me ok so then the question you ask is of us ok in this closed economy how do you decide who produces what in terms of exports or even domestically in terms of you know the banking sector for instance was highly regulated and the answer is the old institution it was called the license raj ok so who got to decide to. go up to become a big producer of t.v. cars or whatever else it was whoever the government happened to get a license to use that is that an equal world absolutely not it's a world in which you hand out favors to your buddies for me that's incredibly
incredibly unequal and if you look at africa for instance i think thirty three countries in africa have relations with the e.u. where they can export zero tariff we extend to the most diverse nation status the problem is not tariffs of europe against africa the problem is terrorists within africa there are there are neighboring countries like france ethiopian eritrean which until about a month ago didn't do any trade with each other and if you know people being landlocked couldn't get to the ports in in eritrea. days this day they can't get into somalia so this is the big problem is not us how many landlocked countries in africa can get to the disease because there's a there's a border with corrupt custom officials not only taking the time. if the government imposes but they're caught i mean these are the big problems that we can't solve
for africa all we can do is say look come on we are allowing you to import to us why don't you trade more with yourself even if you take issue a little bit with your claim there because you make europe seem like there's a knight in shining armor here right that it has become very trained most to think that i mean let me pick up on a point that mckown in mentioned earlier which was agricultural or agricultural subsidies better different you know quite not entirely ok so we're talking about leaving all the you know providing all these opportunities for trade and acting as if europe is. the saint here then we have to begin if you know your cultural fifty nine million. dollars subsidies in two thousand if you're of the e.u. budget agricultural subsidies comprise thirty eight percent of the. other five percent of the e.u. population and this is if you're talking about you know the point you mentioned
earlier that trade is you know good for efficiency comparative advantage then if you know african countries have a comparative advantage in anything agriculture is a big one and as long as you have these incredibly unequal subsidies when it comes to agriculture it's not. come on the first thing is the e.u. budget is really really small it's not the budgets of all the e.u. countries the second thing the other thing with rice this is against any subsidies right anywhere in the world especially in europe but the stuff we're subsidizing is basically maize to make ethanol to put in it put in our cars tanks i think that's awful too but it's not not harming africa we're not subsidizing cotton growing which is harming egypt we're not always the sudan we're not subsidizing cocoa beans which might be. might not even subsidizing the production of flowers kenya i mean prior to this. probably grown in kenya and then supported here with zero tariff so
so c'mon we not knights in shining armor we're not the devils we're sometimes portrayed about by corrupt leaders in third world countries who want to blame their . us for their own woes ok poverty and inequality whatever is the reason for them leave many people to leave their homes in their country seeking a better life and what could be more understandable the result though is that tens of millions of migrants are on. the scenario is repeated around the world people on the move hoping to find a better life thousands of joined a caravan heading to the united states from central america they know what awaits them. u.s. president trump pounds deployed thousands of troops on the border as a deterrent to the european union to responded to the migrants from africa with fences and patrols. its up to the libyan coast guard to
intercept boats for the e.u. and bring the refugees back to libya. now the united nations support for the first global compact for migration the ultimate goal is to stop illegal migration while helping and protecting illegal migrants. back to the compact will not be international law. so what good is this agreement. and you are the experts here what good is the agreement. well it can only create a consensus how to manage and deal with migration i mean we don't have a global government which is going to implement or tool to force any kind of. low only thing is what is our understanding of migration how do we understand migration how do we create opportunities for people living somewhere because our opportunities are determined by the place where we were born in or live in so how
can we create the point you know in life. so what is understanding of states how they can cooperate it is attacked for migration that seems to suggest that migration is a good thing is migration always a good thing migration if it is forced migration is not a good thing if it is a voluntary migration it is a good thing so we'll never be able to stop migration but can we reduce forces migration which has been caused by environmental disasters by war by authoritarian governments or by governance and of course. poverty. raji can you give me a definition of economic justice for the for the global economy. justice is a bit of an oxymoron right economists. very good at talking about efficient it's very interesting to hear an economist actually saying well i don't i don't think i'm saying anything controversial to economist seem economists i mean if you talk
to an economist they're very clear that economics talks about efficiency it doesn't need classical economics ok let me be clear there are other you know other fields of economics as well but the core of traditional economics is one about efficiency it doesn't say anything about distribution and justice is a question of of distribution and not a question of efficiency so we have been talking about how just or unjust the global economy is. in a nutshell look. you saw these these these these pictures of our border the point is that this pact for migration is not about us it's about france and saudi arabia where eighty percent of the population of migrants the gulf states ninety percent of the population of migrants they're doing all the work while the shi'ites are sitting back and smoking there she says it's to protect then primarily that we need to we need this compact for migration people in if you work in saudi arabia to take away your passport even if it's you doing high class work for the saudi government
you know we should stop pouring actions on our head and really point the finger at the people who are really exploiting other people in this world ok thanks very much for that alan thanks to you two years world for joining me here today on quadriga how unjust is the global economy i hope we given you plenty of food for thought by the troops.
house a view of the world. where i come from but all of that it does this go it just like this chinese food doesn't matter where i am always reminds me of home after decades of living in germany chinese food is one of the things i miss the most but that taking a step back i see. they are going to tell the difference when our. men have for its first as a take on a sense that it's just the other part of the war haven't been implemented in china that's why you knock the tanks came home wondering if they're going to take it but if you don't have the right to another book that is this is the job just out of
them how i see it and that's why i left my job because i tried to do it except maybe an hour a day. by name of the uninsured and i work at it up here. you can tell a lot about our society by its garbage. the first six restores for the rich but for many people who don't first there from a chance of survival africa is among the most unequal regions in the world. could be lunch for today just like. our reporters travel to nairobi and new york to meet people who know the true value of garbage. it has created a thriving parallel economy that's been completely ignored by the financial markets but what does all this mean for economic inequality around the world you guys are starting class warfare the response to that statement should be yes we are starting
to as we walk here because we're tired. disrupt and you couldn't play the bridge. and the truth an exclusive report starts november seventeenth the g.w. . bridge the british prime minister to resign may have. well to fight for a draft rights a deal with the e.u. defying nalgene calls to step down and resignations by two senior cabinet ministers secretary dominic rob and work and pensions secretary esther mcvey quit saying the deal did not go far enough in breaking ties with the e.u. . the united states has imposed sanctions on seventeen saudi officials for their