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World: Global Economy Ignores 'Marginal' Countries

Washington, 27 January 1997 (RFE/RL) - As a former head of the World Trade Organization and its predecessor, the GATT, and now as the managing director of the investment banking firm Goldman Sachs International, Peter Sutherland is a strong believer in the system of free enterprise and market economies.

But he says the situation in Bulgaria is a perfect example of what he calls the "marginalization" of many countries in a world that is charging full speed ahead into a global economy that often ignores those less able to compete.

In the rush to a global economy, says Sutherland, countries such as Bulgaria, Albania and many in sub -Saharan Africa are simply "being forgotten" in the process and have fewer places get help. With the end of the cold war, when many could tap one side or the other for assistance, these "marginal" countries have few places to turn.

"We're at a crucial stage in global history," Sutherland told reporters in Washington Friday, and there are "serious and significant deficits in global leadership" at a time when new structures and ways of doing things are emerging.

"There is a need for a forum which is more representative of the real world in which we live today," he said, "some structure that allows the voice of some of the emerging nations who have, or should have, an increasingly important role in the global economy."

Sutherland made the comments to explain the reason he had accepted the position as chairman of the Overseas Development Council (ODC), a prestigious U.S. policy study organization that for more than 25 years has been considered the premier think-tank dealing with American foreign aid to the development world.

The president of the ODC, John Sewell, told RFE/RL that with the changes in the world and the new focus on multilateral organizations, it was time to turn the ODC into international policy research.

"This is going to be a tough period of multilateralism," said Sewell, "because its going to involve commitments and costs for a longer-term benefit and we have institutions which were created 40 to 50 years ago and there is a need to create new ones -- formal and informal -- to match the new shape of the globe."

In just the last few years, Sewell noted, the World Trade Organization, the North American Free Trade Association, the expanded European Union and the Asian Pacific Economic Organization have been created, instituting a multi-regional trading system that is coming together without anyone looking at the overall design. That approach is apt to be used in other areas of international activity as well, says Sewell.

Sutherland, who will provide his guidance to the new ODC while retaining his position at Goldman Sachs in London, says one trend that needs to be studied is the tendency to reduce aid to poorer countries or regions.

"There is a tide of withdrawal from a responsibility to support international organizations financially," said Sutherland. "There has been a tide of attacks on the United Nations, the way it functions, the World Bank, the IMF (International Monetary Fund)...everybody's talking about reform, but they're using it as a synonym for saying 'we don't want to pay any more money.'"

Sutherland said the questioners are not really worried about the reform process, but only use it as "a mechanism for taking the focus off the other issue, which is 'who is going to pay for it.'"

Sutherland said it's time that everyone in the world said "you can constructively criticize when you constructively participate," meaning everyone must be prepared to take a degree of responsibility for development of the global economy.

"The first thing you have to do is get people to recognize that something has to be done," he said, and the rich can't simply say "'well, we have now created a global market so let them take advantage of it' when we know damn well that they can't."

He said that in East and Central Europe "everybody can see an advantage in being involved in the Visegrad countries -- Poland, Hungary and Czech Republic -- because they are clearly on a path to relative economic success. But there are the other countries which need a little bit more and Bulgaria's a good example of precisely this syndrome" of marginalization

Sutherland said the ODC is taking as one of its first tasks to launch studies on what kind of multilateral or multiregional organizations, formal or informal, would best serve all the countries of the world in the current global environment.

As importantly, adds Sewell, the ODC will look at ways to help people understand that on the grass roots and local levels, they may have unprecedented opportunities to decide themselves what kind of social, political and economic systems they live under.