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Cumberland Lodge Conference 2000 Report

The Commonwealth in the 21st Century

Cumberland Lodge, Windsor Great Park

3-4 February 2000

Session I: The Commonwealth and Democracy

Chair:
Tim Slack (Chairman, The Round Table)

Speakers:
Arthur R. Donahoe (Secretary-General, Commonwealth Parliamentary Association)
Richard Bourne (Director, Commonwealth Policy Studies Unit)
Abdel-Fatau Musah (Research & Publications Officer, Centre for Democracy and Development)

Arthur Donahoe took as his starting point the Harare Declaration of 1991. This had come at a critical juncture in world affairs: the Soviet Union had collapsed, the Berlin Wall had come down, and encouraging developments were underway in South Africa. Countries whose undemocratic regimes had been able to prop themselves up by playing one superpower off against the other were no longer able to do so. The Harare Declaration re-affirmed the fundamental principles of the Commonwealth as set out in the Singapore Declaration of 1971, and pledged the Heads of Government to work with renewed vigour to protect and promote them: democracy, democratic processes and institutions, the rule of law and the independence of the judiciary, just and honest government; fundamental human rights; equality for women; provision of universal access to education; continuing action to bring about the end of apartheid in South Africa; the promotion of sustainable development and the alleviation of poverty in the countries of the Commonwealth; extending the benefits of development within a framework of respect for human rights; the protection of the environment; action to combat drug trafficking and abuse, and communicable diseases; help for small Commonwealth states; and support of the UN and other international institutions.

Much of the story of the Commonwealth since 1991 had revolved around the implementation of the Harare Declaration. The outgoing Secretary-General had made this a priority even when developments in his own country might have occasioned considerable difficulty for him. The Commonwealth's approach to member countries losing their democratic credentials was considerably different to what it had been ten years previously-as the Commonwealth's swift response to the coup in Pakistan attested. The principle was now firmly established not only that democracy was a desirable aim, but that military regimes were no longer welcome in the Commonwealth, however popular they might be.

Democracy was difficult to define, as it was both an ideal to be pursued and a mode of government; and as the latter it came in many shapes and forms. The Universal Declaration on Democracy, adopted by representatives from 128 national parliaments meeting in Cairo in September 1997, highlighted amongst other elements the holding of free and fair elections at regular intervals; basic freedoms of opinion, association, expression and the media, and the right to participate in democratic processes; the rule of law and an independent judiciary; and the right to hold all those in positions of public authority accountable. The Commonwealth had made a significant contribution in each of these areas. The Commonwealth had laid special emphasis in recent years on endeavouring to support the free and fair conduct of elections-most notably through the Commonwealth observer missions, some 29 already, which the Secretary-General had sent to various parts of the world. The subject of improving accountability, specifically of parliaments, to make them more relevant, responsive, and responsible to the public, had been much discussed within the Commonwealth Parliamentary Association in recent years, and several recommendations, notably to strengthen parliamentary committee systems, had been made.

Parliaments were unusual institutions. They could vary in size from the UK's, with 1325 members, to Tuvalu's, with 12. Individual parliamentarians had to perform a multiplicity of functions, including as lawmakers; as spokespersons for local interests; as examiners of the work of government, and ombudsmen dealing with complaints about government matters; and as contributors to debates on national issues. Parliamentarians required a wide range of abilities and talents, which naturally not all possessed to the same degree. Similarly, not all were provided with the same research facilities, staff, and technical assistance.

The Harare Declaration specifically enjoined the Commonwealth Parliamentary Association to play its full part in promoting the objectives set out in the Declaration. In fact, the Commonwealth Parliamentary Association had been doing just that from its inception in 1911. Under Section 1 of its constitution, the CPA existed 'to promote knowledge of the constitutional, legislative, economic, social and cultural aspects of parliamentary democracy'. Through numerous conferences, seminars, meetings, special study groups, exchange visits, publications, and information services, the CPA was helping to promote good practice in a range of areas. The CPA had placed special emphasis on organising and conducting seminars on parliamentary practice and procedure and on the role of parliamentarians, particularly for new members of parliament. Parliaments were probably the only institutions composed of members who entered with little or no educational requirements, who received little or no on-the-job training, and who nevertheless had immediately to take complex policy decisions. The CPA was also involved in a wide range of other activities. It was one of the sponsoring organisations of the Commonwealth Human Rights Initiative, it had collaborated with the Commonwealth legal NGOs in producing the Latimer House guidelines on parliamentary supremacy and judicial independence, and it was collaborating with the Commonwealth Secretariat and a range of NGOs on other initiatives, particularly relating to gender equality, including enhancing the participation of women in parliaments, politics, and peace-building.

The Commonwealth Heads of Government, meeting at Durban in November 1999, had renewed their commitment to the Commonwealth's fundamental political values of democracy, human rights, the rule of law, independence of the judiciary, and good governance. They also agreed that the Commonwealth Ministerial Action Group should continue to address serious or persistent violations of the Harare Declaration. It was unfortunate that the Heads did not agree to a recommendation that CMAG should have a role in situations where, although there was not a complete derogation from democracy and constitutional rule, there was a clear breakdown of democracy, sustained abuse of fundamental human rights, or otherwise serious or persistent violations of fundamental democratic values (such as the impeding of legitimate political activities by parties, groups, individuals, or the media). The Heads of Government had decided instead to appoint a high-level review group under President Thabo Mbeki to review the role of the Commonwealth and how it could respond to the challenges of the new century. The CPA, along with other groups, would be making a submission to the high-level review at the appropriate time.

The question of how governance might be reshaped in the twenty-first century had been the subject of a conference at Meech Lake, near Ottawa, in April 1998. It was clear that global interdependence, the communications and IT revolutions, and the growing expectation of the public to be involved in the decisions of government, would have profound impacts on governance. A CPA Expert Group had followed this up. It was clear that parliaments throughout the Commonwealth had to recognise the trends and ensure that their members had the tools to keep pace. Otherwise, the delicate balance between parliaments and executives, the hallmark of democratic parliamentary systems, would go awry.

The second speaker, Richard Bourne, said that he had recently visited Brussels, where he encountered an EU official who had bemoaned the fact that British people always presumed to lecture others on the subject of democracy. Britain, he had pointed out, was a country with an unelected head of state, an unelected second chamber, and a turnout of little more than 70% in national elections, not to speak of local or European elections.

Democracy was not a comfortable concept. It was problematic and challenging. As the world entered the twenty-first century, two of the greatest challenges were how to increase democracy in the world community, and how to increase democratic control over (often multinational) corporate activity. In the twentieth century, democracy in the world community had often been associated with a nominal equality between nation-states. But nation-states were not equal, in population or in economic or political power. The contrast between the power of the US and the EU was in itself striking, but nothing like as stark as the contrast between the power of developed and developing states. Often the only real power of the poorest countries in the international system was their poverty alone. There were real issues of legitimacy here. Similarly, there were very real issues to be addressed in relation to the democratic regulation of corporate activity, particularly in developing countries. The competition amongst developing countries for investment and business was fierce, and their relations with investors and corporations were therefore sometimes dangerously one-sided.

There had been much talk of the impact of the communications and IT revolutions, and there had been hopes that these would usher in a new age of greater democracy. But the communications and IT revolutions had impacted very unevenly, both as between richer and poorer states and within the richer states themselves. The initial effect of the communications and IT revolutions had in fact been to exacerbate unevenness in the distribution of power.

Issues of democracy and accountability were faced by the Commonwealth itself. A sense of ownership was intrinsic to democracy. Yet there were indications that a sense of ownership of the Commonwealth barely existed. In India, the largest Commonwealth country, awareness of the United Nations or the non-aligned movement far outstripped awareness of the Commonwealth. This feeling was perhaps widespread throughout the Commonwealth. It was striking that little more than half a dozen organisations had made submissions to CMAG. There was very little feedback or interaction. It was difficult for there to be a democratic input into the Commonwealth when there was so little sense of ownership, and in many cases so little awareness. There was therefore a need to reinvigorate the sense of ownership within the Commonwealth, and to promote democracy within the Commonwealth as well as within its individual member states. The accountability of the Commonwealth could be increased by a regular audit of contributions to the Commonwealth, and an attempt to use the 'value-added' possibilities of Commonwealth networks to establish and reach targets, such as the 2015 poverty target.

There were some hopeful signs. The new position of Chair of the Commonwealth could open the door to a more democratic spirit, and more direct links with the NGO sector. Even more significant was the Durban agreement on a high-level review of the Commonwealth. It was important that every NGO within the Commonwealth should make its views known; and there was a particular onus on the Commonwealth Broadcasting Association, the Commonwealth Journalists' Association and the Commonwealth Press Union to raise awareness of the Commonwealth and of the high-level review in the media. There was a great opportunity to dynamise interest in the Commonwealth, and to increase its democratic accountability.

The third speaker, Abdel-Fatau Musah, looked at the prospects for democracy in a particularly critical region for the Commonwealth, West Africa.

It was impossible to understand the current situation in West Africa without appreciating the legacy of colonialism. Before the period of colonial rule, West Africa had contained both repressive kingdoms and egalitarian societies such as that of the Ibo, which had no kings at all. Some societies (such as the Ashanti) were very 'advanced' in terms of gender relations. The peoples of West Africa were in many cases forging their own democratic tools before the onset of colonial intervention, but this process was stultified by the imposition of the colonial state. The repressive state apparatuses needed by the colonial regimes slowed down or stopped the spread of democratic ideas, and introduced or reinforced undemocratic attitudes. In many cases, colonialism led to the invention of systems of autocratic power.

In the period immediately after decolonisation, the states of the West African region could be divided roughly into two groups. On the one hand, countries such as Nigeria, Ghana, Benin, Burkino Faso and Mali were seen as dynamic but relatively unstable; on the other, countries such as Gambia, Sierra Leone, Liberia, Côte d'Ivoire and Senegal were seen as basically conservative and calm. Within the first group there had been considerable instability throughout the period of the Cold War. Partly as a result of constant internal turmoil, civil society was able to develop, adapt, and become more sophisticated in response to constantly changing challenges. This enabled these states to absorb shocks and manage conflict more effectively than the supposedly 'stable' group of countries. The second group consisted of states which, with the end of the Cold War and the downgrading of 'superpower' support of client states, found it much more difficult to contain internal movements. Hence it was that civil war broke out in many of the countries which were previously regarded as 'stable' states, where the conditions of the Cold War had perpetuated the rule of small kleptocracies.

Democracy was about much more than just elections, although the Commonwealth's focus on observer missions had been a necessary one. It was essential also to build a culture of democracy. In West Africa there was often very little of the same consensus about basic principles which could be found uniting the Conservatives and Labour in Britain. Work was needed to bring about a political culture more sustaining of democratic practices.

Another important issue was the necessity of international support for the building of sustainable development in the region. One of the key causes of political instability was the economic difficulty experienced by many states in the region. The provision of support for development and the encouragement of democratic practices within these countries should go hand in hand. Programmes for education, healthcare, and poverty alleviation were the most effective way of creating the conditions for the long-term stability of democratic systems in the region. Conversely, it was difficult to conceive of flourishing democracies in the region when basic needs continued not to be met.

• It was suggested that the Commonwealth had focused too much attention on military regimes. Some civilian regimes were worse than military regimes in their abuse of human rights and their exploitation of the country's inhabitants, yet they had been, by and large, let off scot-free. Now that the Cold War was over, and undemocratic regimes could not survive by playing one 'superpower' off against another, was it not now time for the Commonwealth to adopt a less softly-softly approach? And were there the structures, the institutional set-ups and the collective will within the Commonwealth to enable it to address this problem?
  
  
• Some disappointment was expressed at the failure of the Durban CHOGM to give CMAG new criteria and greater powers to deal with the problem of repressive civilian regimes. The high-level review group was in this respect no substitute. Indeed, CMAG would be operating within something of a vacuum until the next CHOGM, in 2001.
  
  
• A number of those present supported the idea of a new 'Harare' Declaration, which would provide a benchmark for Commonwealth progress in implementing democracy within civilian regimes.
  
  
• It was pointed out that the Commonwealth's method of procedure-there being no formal votes, but rather a search for consensus-had not in the past prevented it from taking steps against the expressed views or natural interests of some of its member-states, as on the question of South Africa when the UK found itself isolated, or at Harare, when the Declaration had been passed despite the fact that the Commonwealth then contained at least half a dozen military states. There were, therefore, precedents for a more forthright stance by the Commonwealth.
  
  
• Some of those present detected a groundswell of democratic opinion around the world, exemplified, for instance, by the widespread denunciation of corruption.
  
  
• Many of those present agreed with Dr. Musah's point, that economic and human development was a precondition for the successful growth of democratic practices.
  
  
• There was some concern expressed that the international community, while increasingly willing to attach conditions to development aid, was providing insufficient carrot to match its stick. Many countries had built democracies despite enormous difficulties and still faced immense problems caused by poverty, pluralism, and rapid economic change. There was a feeling in some countries that the help from the international community which had been expected to accompany the achievement of democracy had not been forthcoming. There was a feeling that the international community lost interest when these countries were apparently safely within the democratic fold.

Session II: The Commonwealth and Development

Chair:
Prue Scarlett (Manager of Public Affairs, Commonwealth Business Council)

Speakers:
Stephen Matlin (Director, Human Resources Development Division, Commonwealth Secretariat)
Chris Stevens (Institute of Development Studies, University of Sussex)

Stephen Matlin began by saying that the idea that the Commonwealth had a particular role to play in development had been present from the earliest days of the association. From the 1950s onwards, there had been regular conferences on these issues and a meeting of Commonwealth economic and trade ministers in Montreal in 1958 had stressed the importance of human development (specifically education and training) as a factor in economic development. Their recommendations led to the first of many meetings of ministers of education in the Commonwealth at Oxford in 1959. Thus from a very early stage there was a fundamental recognition that economic and human development ran together.

The Commonwealth contributed to development in many ways. At a general level, it acted as a catalyst and a channel for assistance flowing from North to South. It was also a spur to South-South (mutual) assistance, and to regional cooperation (Caricom and the SADC were both predominantly made up of Commonwealth members.) The Commonwealth also had more specific roles. There was the work of the Commonwealth Development Corporation, and the Commonwealth Fund for Technical Cooperation. The Commonwealth Secretariat supported a broad range of activities in the fields of training, capacity building, and the provision of expertise, and it also had an important advocacy role on behalf of the less developed nations. There were in addition a number of now freestanding bodies which had in some way evolved out of the work of the Commonwealth Secretariat, such as the Commonwealth Business Council, and the Commonwealth Private Investment Initiative.

There were several areas in which the Commonwealth was able to make a particular contribution. It had a longstanding role in the promotion of good governance, and in various related areas, now including public sector reform. It was also an active promoter of partnerships between government and civil society. It had a particular role to play in the promotion of the interests of small states, and had already made a contribution to tackling their human resources shortages, to the debate about 'vulnerability', and to the promotion of the idea that small states had special circumstances and therefore special needs which ought to be accommodated by the international agencies. Related to this was the Commonwealth's work with multi-jurisdictional states (from India to the small Caribbean countries), where the Commonwealth had experience of working with different levels of government to promote democracy and development. In response to globalisation, the Commonwealth had supported the path of 'people-centred development', emphasising the need to develop human resources and the skills needed to master the new technologies. As the Secretary-General, Chief Emeka Anyaoku, had said, 'knowledge is the new asset'. The environment was another area in which the Commonwealth had a particular role to play, and one which was becoming more prominent. Finally, the Commonwealth had now recognised gender equality as both an aim and a necessary condition of development. For example, a series of workshops on gender in the health sector had brought together people from around the Commonwealth to find ways of making progress in this area.

In the field of development, the Commonwealth Secretariat had acted as a generator or incubator of numerous useful ideas, structures, and tools. Amongst 'ideas', Professor Matlin listed the small states vulnerability index, gender management systems, and the human resources development initiative Amongst 'structures' he listed the Commonwealth Private Investment Initiative, with its four regional private investment funds, TIAF, CPTM, CHEMS, ACEAB, CENSE, ACS, and the Commonwealth Secretariat/UNESCO network of tertiary institutions in small states. Amongst 'tools', there were the debt recording and management system, the head teacher training and multigrade teaching modules, and the gender and health curriculum. The Commonwealth Secretariat and its various related bodies showed particular leadership in the collection, creation, and demonstration of good practice.

In the immediate future, there were both threats to and opportunities for the Commonwealth's role in the field of development. The greatest threat to the work of the Commonwealth Secretariat and its related bodies was posed by the shrinkage of resources. The Commonwealth Fund for Technical Cooperation's actual expenditure had declined from £28 million in 1991/2 to £18 million in 1998/9. There were signs that this was, thankfully, the bottom of the curve. The shrinkage of resources, although to be regretted, had forced the Secretariat and its related bodies to look closely at their focus and their mechanisms.

In the 1980s and especially the 1990s, there had been a shift in the nature of development assistance, as well as a decline in its volume. In particular, there had been a move from the funding of individual projects to broader, sector-wide and even wider, approaches. This forced donors and international agencies into cooperation and into a macro-view. Nevertheless, there were concerns that this might lead to more conditionalities being attached to development assistance. The Commonwealth Secretariat could perhaps play the role of an honest broker in this.

Professor Matlin concluded by drawing attention to the threat posed by HIV/AIDS to many Commonwealth countries. It was estimated that some 25 million people were now infected with HIV in sub-Saharan Africa. In some countries, 20 or even 30% of the adult population was infected. HIV/AIDS was now on the increase also in South Asia and the Caribbean. The impact on development was enormous. Besides the creation of millions of orphans and the utter social disruption it entailed, the AIDS epidemic had resulted in the loss of large numbers of skilled people, and an enormous loss of economic activity. In Kenya it had been estimated that there would be a 15% reduction in GDP by 2005 as a direct result of the epidemic. In Zambia, the death rate amongst teachers had now exceeded the rate at which the country's teacher training colleges were able to produce new teachers. It was only by thinking creatively about challenges such as that presented by the HIV/AIDS epidemic that the Commonwealth could continue to play an important role in development.

The second speaker, Chris Stevens, said that he thought that the world was moving in a direction which would make the kind of historical, professional, and institutional links which lay at the heart of the Commonwealth association more valuable and more relevant in the twenty-first than in the twentieth century. In the field of development, there was an increasing demand for involvement, advocacy, and support by organisations such as the Commonwealth. The Commonwealth could in future significantly influence the environment for trade policy (both formal and informal), finance (in such matters as investment regulations), and aid (in such areas as advocacy on governance issues).

In trade policy, formal regulations were steadily becoming of less significance, and informal regulations were becoming correspondingly more significant. Examples of the latter were ISO standards, health and safety regulations, or eco-labelling. Developments in global trade had meant that there were now powerful trade sanctions not open to government influence, and decisions at a corporate level or influenced by public opinion could have powerful effects on individual economies. If, for some reason, Sainsbury's decided to stop purchasing Kenyan tomatoes, the effects on the Kenyan economy could be devastating. At times, these sorts of pressure were but a thinly-disguised form of protectionism, but increasingly there was a questioning of the social and environmental effects of trade policy decisions. Clearly the public debate should be informed, or else the developing countries would fall victim to consumer prejudices in the developed world. The Commonwealth could play a key role here, linking as it did developed and developing countries, successful and unsuccessful economies, and governmental and non-governmental sectors.

There were new challenges for the 'old', formal trade policy. In particular, there was a need for consensus-building within the WTO. If countries disliked certain decisions, they could only overturn them through extensive consensus-building. Here again the Commonwealth had an important role to play: if consensus could be found amongst Commonwealth countries first, this would carry great weight in the WTO.

There were also new areas of trade policy in which the Commonwealth could make a contribution. Formal trade policy was now being extended to cover such areas as service industries, intellectual property, and standards harmonisation. This latter provided particular opportunities for the Commonwealth. 'Standards' could cover both merchandise trade (product safety, social acceptability, etc.) and services (recognition of qualifications, prudential requirements, rights of establishment, rules on provision of health insurance, etc.). It was clear that there was greater growth of trade within blocs in which standards were the same; trade grew where there was mutual recognition of standards. It was clearly undesirable for any country to find itself in a standards bloc which was slow-growing. With the shared legal and linguistic traditions of the Commonwealth, the Commonwealth was in a good position to take a lead in the harmonisation of standards both for merchandise trade and for services. In most cases, there was no conflict between different standards: they were just different. Since the standards most used had the best chance of becoming globally-accepted, there was a fair chance that Commonwealth standards would be accepted as global standards.

The Commonwealth was a big bloc in the WTO. The Commonwealth plus Francophonie was a very big bloc. It was not unimaginable that harmonisation of standards as between the UK and France as a result of EU membership might lead to the building of a consensus within both the Commonwealth and Francophonie. The chances of this consensus becoming a global one were then very high. Both the Commonwealth and Francophonie encompassed countries of very different backgrounds, from the most developed to the least developed. Cooperation on harmonisation within these associations could therefore play a seminal role in influencing future trade policy formation.

• Stephen Matlin was asked to what extent the Commonwealth Secretariat monitored, assessed, and in the face of failure limited its activities. It was sometimes said that the Secretariat was better at 'sunrising' than 'sunsetting' activities. Professor Matlin said that the Secretariat had improved its monitoring and evaluation of projects, although this was sometimes difficult, especially where the Secretariat was but one partner in a project. The Secretariat also recognised the need not to drag projects out unnecessarily. This was partly driven by financial necessity. The Secretariat was continually being given new tasks and mandates from ministers, while resources had declined. It was necessary to look very closely at every project, in that light.
  
  
• There was considerable discussion of Chris Stevens's suggestion that the Commonwealth and Francophonie might together form a bloc for the harmonisation of standards. It was thought that it was hard enough to get agreement within the Commonwealth (or indeed within the EU), let alone with all the members of Francophonie as well. The Secretaries-General of the two organisations were in frequent touch on a range of matters, but it was thought that the realities of differing interests on this issue would make the diplomacy of an agreement very hard indeed.
  
  
• It was suggested that blocs could only be built out of mutual self-interest. The reason the ACP countries had stuck together for so long in their negotiations with the EU was that they realised they were in danger of losing everything if they did not. Blocs were built out of self-interest, not of altruism or solidarity. Dr. Stevens agreed. But, crucially, the only way now to pursue national self-interests was through alliance-building.
  
  
• Several participants raised the question, to what extent there was or should be a human rights and good governance element to trade and development policy. It was suggested that any reasonable definition of development had to include a recognition of the ultimate importance or objective of human rights, democratic values, and the enhancement of life chances. It was further suggested that, just as there had to be a carrot as well a stick when it came to encouraging countries to adopt civilian and democratic forms of government, so the Commonwealth Secretariat and other agencies could do more to link development projects directly to good governance-related criteria.
  
  
• There was some debate as to whether the link between democracy and development was inherent or imposed. One member of the audience ventured that there was no automatic connection: Singapore had been spectacularly successful in developing economically, but it did not, by most people's reckoning, have one of the world's most democratic polities. Other participants disagreed, suggesting that democracy and sustainable economic development were mutually reinforcing. The most rapid economic growth, in comparable circumstances, had been in those countries which had democratic rather than undemocratic regimes, taking 'democracy' in the wider sense of the rule of law, freedom from arbitrary arrest, etc. Economic success, and particularly the encouragement of foreign investment, was that much easier when this stable framework was in place. Moreover, it was usually the case that democratic governments gave greater priority to such areas as health and education, which were increasingly a factor in attracting foreign investment and in economic growth.

Session III: Business and the Commonwealth

Chair:
Derek Ingram (President Emeritus, Commonwealth Journalists' Association)

Speaker:
Mohan Kaul (Director-General, Commonwealth Business Council)

Mohan Kaul took as his theme 'Business and the Commonwealth: A New Partnership'. It was a sobering thought that five years previously even a forward-looking group such as the Round Table might not have contemplated inviting someone to speak on such a theme. What had changed to occasion such an invitation? Simply stated, everything and nothing. The world was perhaps only incrementally different from five years previously. There was much talk of an information revolution, but the world still faced many of the same, enduring challenges: to eradicate disease, reduce poverty, and extend education. What had changed, however, was the way we looked at the world. We now spoke in terms of the 'globalisation' process and its effects on the lives of nearly everyone on the planet. We also grappled with the fundamental changes taking place in the relationships between government, the private sector, and wider civil society.

Globalisation, as the Commonwealth Heads of Government observed in their Edinburgh Declaration, was a double-edged sword: 'Today's globalised world poses both opportunities and challenges. Expanded trade and investment flows, driven by new technologies and the spread of market forces, have emerged as engines of growth. At the same time, not all countries have benefited equally from the globalisation of the world economy, and a significant number are threatened with marginalisation. Globalisation therefore needs to be carefully managed to meet the risks inherent in the process'. There was no denying that globalisation was an unstoppable process. But it was essential that the process should be managed so that the benefits would be distributed more equitably both between and within countries. Prime Minister Mahathir of Malaysia put it forcefully in a speech delivered to the Commonwealth Business Forum in Johannesburg: 'Globalisation may be an idea whose time has come, but that alone should not mean we should all meekly accept it. We must ensure that it will be for our good, individually and collectively, before we do …. If the Commonwealth wants to see trade and investment flows bringing with them prosperity in a globalised world, the Commonwealth must be willing to challenge conventional wisdom and propose rules and regulations to make free trade create wealth and not destroy it'.

Over the previous ten years, the Commonwealth had come of age, and had proved, by drawing on its shared values, that it could make a difference in achieving change. Through its focus on democratisation and the principles articulated in the 1991 Harare Declaration, it had been able to exert tremendous pressure on governments to adhere to common standards. With their firm action against the military regimes of Nigeria and Pakistan, Commonwealth Heads of Government gave real meaning to Commonwealth values and made an impact on the thinking of individual governments and the wider public. In such areas, where the United Nations had often found itself unable to act decisively, the Commonwealth had taken a leading role and was now viewed as a standard-setter worldwide.

Having made such an impact in the political sphere, the Commonwealth reached a point where it was able to devote more attention to economic and developmental priorities. Accordingly, at their Edinburgh summit in October 1997, the Commonwealth Heads of Government centred their discussions around the theme of economic development and adopted the Edinburgh Declaration, 'Promoting Shared Prosperity'. The Edinburgh Declaration mirrored the Harare Declaration and set the scene for the Commonwealth to play a leading role in the globalisation process, as it had done with regard to democratisation in the early 1990s. In the concluding paragraph of the Edinburgh Declaration, Heads stated: 'We believe the Commonwealth can play a dynamic role in promoting trade and investment so as to enhance prosperity, accelerate economic growth and development and advance the eradication of poverty in the twenty-first century'. That was the promise of Edinburgh, which set out boldly the challenge for the new century. It was also Edinburgh which gave birth to the Commonwealth Business Council (CBC).

A more recent manifestation of that commitment took place at both the Business Forum and the CHOGM in South Africa in November 1999. Heads of Government placed the question of globalisation high on the Commonwealth agenda. The deliberations at the Business Forum and at the CHOGM also confirmed that governments were taking the private sector seriously as a partner in socio-economic development. As they stated in their communiqué, 'Heads of Government … recognised the essential role of the private sector as a partner in shaping globalisation with equity'. The willingness to forge that partnership was evident at the first Commonwealth Business Forum, held in London on the eve of the Edinburgh CHOGM, which brought together more than 300 business and government leaders to focus on trade and investment issues. In Johannesburg, on the eve of the Durban CHOGM, the second Business Forum attracted 640 delegates from 40 Commonwealth countries.

The Commonwealth was not a trade bloc. Nevertheless, its 54 countries accounted for some 30% of the world's population and some 20% of its international trade and investment. There were over 17,000 registered companies in the Commonwealth; the total value of Commonwealth trade in 1997, including both imports and exports, was over $2 trillion; and the total value of foreign direct investment outflows from Commonwealth countries in 1997 was over $91 billion, representing more than 21% of total world outflows.

Since Edinburgh, under the leadership of Lord Cairns and Cyril Ramaphosa, along with a board of management comprising business leaders from all regions of the Commonwealth, the Commonwealth Business Council had grown into a membership-based organisation with more than 120 private sector members from 21 Commonwealth countries. Through its membership, the CBC had been able to articulate views which Dr. Kaul believed were reasonably representative of the Commonwealth business community. These views had been communicated to governments through dialogue on key policy issues at the Commonwealth Business Forum, Commonwealth Finance Ministers Meetings, and private-public dialogue with Ministers of Trade, Commerce, and Infrastructure Development. In order to promote trade and investment, the Commonwealth Business Council was concentrating on three areas in which the Commonwealth enjoyed a comparative advantage: helping to remove barriers to trade, promoting investment, and fostering a good environment for business and investment.

The Commonwealth Business Council was working with governments to help open up trade and bring benefits especially to the developing countries. It was in the interests of all countries, but especially the developing countries, to work towards a balanced agenda for trade negotiations and the establishment of a broad consensus on the scope and limits of the World Trade Organisation. The Commonwealth consensus on these issues, which was achieved at the Durban CHOGM with the help of private sector inputs, provided a substantial foundation and could help enormously to advance the process. It was encouraging that, following the Seattle ministerial meeting of the WTO, the British government in particular had indicated that it believed that there was a positive role for the Commonwealth in influencing the WTO processes, and was seeking to mobilise consultations to that effect. Clearly, there had to be further debate on WTO processes and organisation in order to ensure effective participation by and consultation with the developing countries. The Commonwealth could bring a valuable perspective to that debate.

In the area of promoting investment, the Commonwealth Business Council was highlighting the opportunities and positive aspects of the 'Commonwealth factor', which included investment costs which were 10-15% cheaper in Commonwealth countries than in non-Commonwealth countries. It was worth noting that Commonwealth countries held 22% of the world's inward foreign direct investment (FDI) stock, with the largest holdings in the United Kingdom, Canada, Australia, Singapore, Malaysia, New Zealand, Nigeria, South Africa, and India. Commonwealth developing countries were also having some success in attracting new investment. The largest percentage increases in FDI inflows in 1997 were directed to Bangladesh, Uganda, Tanzania, Ghana, Guyana, St. Vincent and the Grenadines, and Swaziland. It was important to ensure that investment flows went both ways in the Commonwealth, both outward and inward, to the developed and developing countries.

The Commonwealth Business Council was also working to convey private sector views to governments on priorities for a good business environment, including measures to foster stable and consistent economic policies, tackling corruption, development of innovative private-public partnerships for infrastructure development, and adopting Commonwealth guidelines on corporate governance. There was a role here for the Commonwealth to help governments create a better environment. The CBC's survey of private sector views identified three main obstacles to external investment: corruption, policy instability, and inadequate infrastructure. It was the CBC's hope that in future the Commonwealth would be courageous in developing standards for governance and management of economic policy, including trade and investment issues. Governments could then be urged to adhere to those standards in the same way that they had been urged to adhere to democratic standards.

If the potential of the Commonwealth as a vehicle for trade and investment was to be realised, businesses and governments had to address four main challenges in the years ahead. First, while the merits of more liberalised trade were now being recognised and accepted globally, businesses and governments needed to communicate more effectively the potential benefits to the populace. The outcome of the Seattle meeting of the WTO showed that the message was not getting through. Experience had shown that open trade brought benefits and greater prosperity, including to the developing countries. Conversely, protectionism and trade barriers could inhibit development. For example, in 1987, India's GDP was higher than China's. By 1997, after a decade with a progressively more open trade policy, China had a GDP more than two and a half times India's.

Secondly, governments alone would not be able to meet the need for socio-economic development. They would increasingly depend on the private sector and non-governmental organisations to provide investment and services in areas where they were unable to deliver effectively. It would be necessary to define the appropriate roles for business and governments. There had been a blurring of roles and responsibilities as trends had moved in the direction both of privatisation of the public sector and of what had been termed the 'public-isation' of the private sector. The role of government should be to set national objectives, establish economic policy and the investment regime, and set the parameters for its role in social and economic development. That of the private sector should be to deliver sustainable projects over the long term, which had clear social and community development components to which they should contribute.

Thirdly, there was a growing realisation that not everything could be left to market mechanism. Governments would continue to play a role in providing a policy framework, regulating and setting standards, while businesses would have to be responsible and accountable as good corporate citizens. They would have to manage operations to ensure competitiveness while maintaining social accountability. 'Corporate social responsibility', including obligations to all stakeholders (shareholders, employees, suppliers, and customers) would become increasingly important for successful business operations. As Ishmael Yamson, Chief Executive of Unilever Ghana, and a Board Member of the Commonwealth Business Council, had said: 'Multinational companies must indicate what they consider to be socially responsible by making their standards and values explicit, by guaranteeing compliance with them in their policy- and decision-making processes, and by ensuring that those values reflect what their publics expect them to live out'.

The final challenge arose from the technological revolution. E-commerce, or e-business and e-services, was already transforming the way companies conducted business and interacted with customers and suppliers. Within the Commonwealth, the divide between the information haves and have-nots had to be tackled. The Commonwealth had potential to play a leading role in e-commerce, drawing on the strength in this area of countries such as Canada, India, Malaysia, Singapore, and the United Kingdom. Smaller countries such as Barbados and other Caribbean nations were also involved, for example in the growing data-processing business. In the Pacific, Tonga had become a supplier of internet domain names to meet the growing shortage. Agreements between Commonwealth countries on e-commerce issues could set standards and pave the way for the rest of the world.

Could the efforts of the Commonwealth to promote trade and investment make a difference? The potential and the will to try was certainly there. Given its membership, which encompassed both developing and developed countries, the Commonwealth was well-placed to address the questions raised by globalisation and to help bridge the North-South divide. There had already been some notable achievements. One had been to demonstrate the considerable private sector interest in engaging in dialogue with governments. Another had been to establish that government leaders at the highest levels were willing to listen and take account of the views of the private sector. The positive results on that score were demonstrated both at the Commonwealth Business Forum in Johannesburg and at the Durban CHOGM. Such a dialogue, which had been cultivated since Edinburgh, provided the foundation for a new partnership between business and government in the Commonwealth. As governments sought to do less and the private sector weighed how it should respond to new responsibilities and obligations, this dialogue would be essential to meet the challenges of globalisation. Based on the positive response thus far, the Commonwealth Business Council was confident that a great deal could be achieved.

For the Commonwealth to be able to meet those challenges, it would also be vital to mobilise public support. Public opinion in all Commonwealth countries, and particularly the United Kingdom and the other developed countries, was critical to the success of any efforts. British leadership on the debt issue, for example, was made possible by the overwhelming support of the British public. It mattered greatly to the Commonwealth what the United Kingdom thought of it. If the Commonwealth was viewed in Britain as a burdensome legacy of the past, then it would live in the shadows. That would negate its value as a dynamic association which could make a significant contribution to the problems of globalisation and other vital issues. In many Commonwealth countries, the association was viewed not in terms of links with the past, but as a modern, vibrant network of governments and peoples with common interests and objectives. It was important to encourage that positive, forward-looking image, which encompassed a broad range of involvement in the political, economic and developmental spheres. The modern Commonwealth had a lot to give and to share in the twenty-first century, and should not be shy of saying so.

• Asked whether he thought that the outcome of the Seattle ministerial meeting had been a disaster, Dr. Kaul said that the developing countries had been hit more than the developed countries, as it was the developing countries who had most need of agreements leading to the liberalisation of trade. The Seattle meeting highlighted the lack of participation in the WTO process. Many ministers of developing countries had to sit outside while the crucial negotiations were being conducted, and only learned through the media when decisions had been taken. Nevertheless the Seattle fiasco had undoubtedly brought about a greater consciousness of the need to look at the agenda of globalisation, and its impact in particular on developing countries. It was a pity that in Seattle there had been hardly any private sector input. Nevertheless again he thought that the fiasco had had a flipside, in that it had generated greater interest in global trade negotiations within the private sector.
  
  
• Dr. Kaul was asked whether he thought that the Commonwealth had a role to play in tackling corruption. He referred to the action of Commonwealth Law Ministers on money-laundering, and to the work of the Secretary-General's expert group. The Commonwealth Business Council had started setting in place a mechanism for meetings between representatives of governments and of the private sector at national level. The aim would be for these meetings to identify those areas in each country where it was thought that corruption was most ripe, and then to disseminate models of best practice. It was hoped that consultants would be brought in to enhance capacity-building. This was certainly a programme to which the private sector appeared willing to give resources; it was recognised that corruption was bad for business.
  
  
• It was suggested that hopes for a more socially responsible private sector (or that everything could be left to the market) might prove misplaced. Dr. Kaul agreed that not everything could be left to the market. Nevertheless he believed that it was in the interests of business to behave in a socially responsible manner. In South Africa, it had been the business sector which had first started to dismantle apartheid. This was the result of economic necessity, not of a change of heart. Business realised that it would benefit from the end of a regime under which a small minority monopolised wealth and participation.
  
  
• It was pointed out that the short- and medium-term effect of globlisation had been to increase the marginalisation of many developing countries. The developing countries had been required to let in many imports which destroyed local industries; but they had found it difficult to export, especially in those areas (such as agriculture) where they had a comparative advantage. There was considerable pressure within many developing countries to oppose further liberalisation of trade, and governments had to listen to the views of their own electors. In response, Dr. Kaul agreed that the problem was one of market access. Nevertheless it was important that protectionism within the developed countries should be challenged. Trade liberalisation was very much in the interests of developing countries.
  
  
• Asked to elucidate what he believed to be the roles of governments and private sectors, Dr. Kaul said that the essential roles of governments were strategy and development. It was particularly important that governments should put resources into education. Once the government had set the parameters, the private sector could help, particularly in the development of infrastructure. In some countries there had been a blurring between public and private sectors. Nevertheless there was a clear need for accountable structures.
  
  
• There was considerable discussion of the idea that developing countries could somehow 'leap-frog' into the technological age, with some participants more sceptical than others. It was pointed out that the high cost of telecommunications was a major obstacle for developing countries. Other participants suggested that satellite technology and technological development in general were making telecommunications more affordable. Often the problem was a political one rather than a technical one: that of persuading governments not to protect their telecommunications industries, or of governments attempting to disengage from high-cost contracts. It was pointed out that Germany and Japan, to name but two, had achieved economic progress through a form of technological 'leap-frogging'. In the developing countries there was tremendous willingness to work and to make the best of any opportunity which presented itself.
  
  
• It was suggested that talk of 'business' and of 'the private sector' obscured very real differences and cleavages. One such was that between big business and small entrepeneurs. Dr. Kaul was asked what, if anything, the Commonwealth Business Council was doing to promote the interests of the small entrepeneurs. Dr. Kaul admitted that the CBC had not done enough. Nevertheless the CBC was developing a network to facilitate access from smaller companies to bigger, and to help small companies develop proposals for investment. It was also looking at microcredit projects, and other projects which would lend themselves to private sector funding. Studies had shown that when small entrepeneurs were given credit, they were much more likely to repay their loans regularly than were large companies.
  
  
• Dr. Kaul was asked where the Commonwealth Business Council drew the line between discrete 'Commonwealth' activity, and activity which was part of international activity more generally. He said that some blurring was inevitable. The CBC had initially drawn its membership from companies with their headquarters in Commonwealth countries, but it soon became clear that there were many companies with major investments in Commonwealth countries, and which were willing to support the Commonwealth Business Council, which happened to have their headquarters in non-Commonwealth countries. He thought that the blurring was not a great problem, if benefits flowed to Commonwealth countries. It was pointed out that the Commonwealth Institute's new 'e-commonwealth' facility, which had as its central purpose the strengthening of Commonwealth networks, also found it necessary not to be too rigid in its definition of 'Commonwealth' activity. The 'e-commonwealth' facility had resulted from its developers spotting the usefulness of the Commonwealth as an important global network, and provided a good example of how the private sector saw advantages and opportunities in the Commonwealth connection.

Session IV: The Commonwealth and Small States

Moderator:
Sir Humphrey Maud (Former Deputy Secretary-General, Commonwealth Secretariat)

Speakers:
David Peretz (Senior Adviser and Executive Manager, Task Force on Small States, World Bank)
Peter Tulloch (Director, Development Division, World Trade Organisation)
H.E. Sheelagh M. de Osuna (High Commissioner for the Republic of Trinidad and Tobago)

Sir Humphrey Maud opened the session by referring to the negotiations on a successor to the Lomé IV convention, which had been happily concluded the previous night. The new agreement included some special provisions for small states, the result of a shift in thinking on small states for which the Commonwealth could claim some credit.

The speakers had agreed to take as their starting-point the Interim Report of the World Bank/Commonwealth Secretariat Joint Task Force on Small States of October 1999, which had been presented to the Commonwealth Heads of Government in Durban in November 1999, after endorsement by the Commonwealth Foreign Ministers. The report had been applauded by the Heads of Government, after exhaustive and lively debate.

The report satisfied the call at the Edinburgh CHOGM in October 1998 for an examination of the case for giving small states special treatment. The process leading to the report was launched by a ministerial mission in July 1998 led by Owen Arthur, Prime Minister of Barbados, with calls first on the World Bank, then on the IMF, The European Commission, the World Trade Organisation, and UNCTAD. From the outset the major international organisations were thus in-spanned as partners in the project, and they were now committed to take account of vulnerability in their decisions on such matters as resource allocation, trade preferences, and technical assistance. There was in particular a unique partnership between the Commonwealth Secretariat and the World Bank. The latter's generous instincts had at times to be curbed by the need to keep executive directors on board, by resource constraints, and by a division of view as to whether small states needed special treatment. The Commonwealth Secretariat's contribution was an important one, building on its diplomatic links, the experience of the CFTC, and the work already done on the vulnerability index.

The report presented to Commonwealth Heads of Government was an avowedly interim one. The report would be finalised by April 2000, in time for meetings of the World Bank and the IMF. Further consultation was needed, especially on paragraphs 71 to 75, dealing with such matters as commodity risk and disaster insurance, the encouragement of institutional lending despite high transaction costs, and capacity-building.

The Commonwealth Secretariat's Report on the Vulnerability of Small States had identified a number of particular problems facing small states, including vulnerability to natural disasters, income volatility, and volatility also in growth rates of GDP. There were also problems with capacity and institutional weakness, and with the transition to a new global trade regime involving the removal of trade preferences at a time when aid budgets were falling. At Edinburgh there was a particularly sharp debate on disaster relief and funding, led by, amongst others, Antigua, which had suffered four hurricanes in five years, and had fairly exhausted its ability to raise loans in the private market. The Task Force on Small States therefore aimed to find ways to make small states partners in trade negotiations, to support trade-related infrastructure, to help small states cope with the liberalisation of financial services, and to help them find fiscal alternatives to revenue from tariffs and duties. In short, the Task Force was set up to find ways of helping small states to take advantage of the opportunities and to overcome the threats posed by globalisation.

The Task Force recommended a number of ways forward. One was to support regional initiatives, which would help to reduce the unit costs of infrastructure and public goods. Another was to strengthen financial markets, to attract external investment. Measures were also suggested to mitigate the effects of natural disasters, and work was continuing on disaster insurance. Finally, the report stressed the need to get development, finance, and trade institutions to agree on an integrated approach to the problems of transition, covering such matters as adjustment costs, diversification, and building institutional capacity. The overall theme of the report was how to help small states cope with the emerging global trade regime, and how to help them exploit the benefits rather than suffer the consequences of globalisation.

The report envisaged a continuing leadership role for the World Bank and the Commonwealth Secretariat. The Commonwealth Secretariat had identified a number of areas where it could make a particular contribution: supporting facilities for small states in Geneva, broadening TIAF to include trade-related investment, expanding the Commonwealth Private Investment Initiative as a source of private equity and venture capital, supporting regional initiatives (such as by disseminating best practice), and using its powers of advocacy to urge a flexible approach to graduation. Biannual meetings of the Commonwealth Secretary-General and the President of the World Bank would help to ensure follow-on, and to put salt on the tails of their other multilateral partners.

In conclusion, Sir Humphrey drew attention to a number of questions which gave the Task Force most trouble, and which he hoped the speakers and other guests would explore. Given that they mostly enjoyed above-average per capita income, and were particularly well placed to take advantage of the surge in global tourism and the opportunities afforded by the IT and communications revolutions, how strong was the case for giving small states special treatment? Would small states manage to make the transition to the global mainstream? Would regional integration help or obstruct global liberalisation? And how best could small states make their voices and their needs heard in the global conferences of the twenty-first century?

The second speaker, David Peretz also drew attention to the role of the Edinburgh CHOGM in galvanising international agencies into paying more attention to the problems of small states. This had led to the creation of the World Bank/Commonwealth Secretariat Joint Task Force, which was looking at the problems of all developing small states (not just small states which were members of the Commonwealth), and also of small territories which were not states (such as the French and Dutch overseas territories). States and territories were generally reckoned to be 'small' when they had populations of 1.5 million or less, although some more populous states (such as Jamaica) were also included within the Task Force's purview.

The findings of the Task Force, as set out in its Interim Report of October 1999, were not new or startling. But they were important and authoritative. The essential conclusion was that small states needed special measures to help them take advantage of the opportunities afforded by globalisation.

The Task Force emphasised the vulnerability of small states. When they were hit by natural disasters, very often the whole country was affected. They were also prone to particularly acute problems of income volatility, caused by swings in the prices of key agricultural or industrial products. They were frequently perceived as high-risk markets by private investors, a problem accentuated by capacity weaknesses in both public and private sectors. Efficient regulatory authorities required what was relatively a huge investment, while small states sometimes found it hard to negotiate effectively in their dealings with the international institutions and major donors. Because of their smallness, they often found that donors and institutions perceived high costs of lending, and were unwilling to pay those costs. Small states sometimes had particular reasons for finding it difficult to adjust to the changing world trade regime. They were often dependent on only one or two products or industries, and many were dependent on tariffs for revenue. All this was against a background of declining aid volumes.

The Task Force had already produced a number of recommendations for further action. Perhaps first and foremost was that small states should not only pursue sound economic policies, but should clearly signal this to the markets. The report stressed that relatively high levels of aid were appropriate, and that aid should be made more effective through closer coordination amongst donors. Regional cooperation was to be encouraged, although it was recognised that this might prove easier in the Caribbean than in the Pacific, and that regional integration was not an option for countries such as the Seychelles. Although more work had yet to be done on catastrophe insurance, the report pointed towards risk pooling as a means of enlisting the private insurance market. Again more work had to be done on ways to help small states in the transition to the new global trade regime, but the report suggested various lines of progress. The Task Force also emphasised that small states were often well placed to take advantage of the IT and communications revolutions. Distances were shrinking, and new opportunities were opening up in such fields as data-processing and e-commerce. Work was now being done on how best to help small states take advantage of those opportunities. It was already clear that the key was access to high-quality, low-cost telecommunications facilities, and that major obstacles were presented by existing monopolies and public sector practices.

The Task Force had already set out many recommendations, and by its work had helped to encourage a range of international agencies to set out their own agendas on small states issues. For the World Bank (which would be setting up a small states department cutting across the various regions, to coordinate work on small states issues) and the Commonwealth Secretariat, the final report, due to be presented in April 2000, would not be the end of the story: the real work would then begin, of holding the international agencies to their commitments.

The third speaker, Peter Tulloch, admitted that the debate in the World Trade Organisation was not as far advanced as in the Commonwealth Secretariat or the World Bank. Some of the larger countries, such as Brazil, were opposed to what they saw as the creation of a new grouping within the WTO. Nevertheless the vulnerability of small states had been clearly highlighted by recent episodes, including the ramifications of the change of EU policy on the trade in bananas, and the effects of a fall in the price of certain types of tropical timber (leading, in the case of the Solomon Islands, to rapid over-exploitation of resources to meet the servicing of external debts).

Most, but not all small states were members of the WTO. Small states clearly faced peculiar difficulties as a result of the transition from GATT to the WTO. The time given to adapt to the new trade regime may in some cases have been inadequate. The legal obligations under the WTO were more complex than under GATT. Many small states did not have missions in Geneva, or if they did they often had to cover the whole UN and international system based there. In the circumstances it was remarkable that such countries as Barbados, Lesotho, or Mauritius were able to maintain their very effective delegations there. The numerous meetings of the WTO were too much for the resources of some small states. The high costs of the dispute settlement mechanism understandably made many small states wary.

The WTO had gone some way to meet these concerns in the previous year. A legal advisory service, independent of the WTO Secretariat, had been established, to advise developing countries on their dealings with the WTO. This would, inter alia, provide lower-cost advice to small countries, thus to a certain extent mitigating the concerns about the costs of the dispute settlement mechanism. Proposals to simplify the procedure for accession to the WTO (presently long, complicated, and burdensome) were lost along with everything else at Seattle.

The failure of the Seattle meeting also meant that other proposals of benefit to small states were not adopted. It seemed likely that various proposals put forward to make the transitional arrangements for trade liberalisation in key products more flexible would have been agreed. For instance, it was recognised that the phasing out of the multifibre agreement by 2005 would entail disproportionately negative consequences for some small states, who had previously been able to exploit niches created by the agreement. On the question of small states' dependence on tariffs for revenue, it was likely that agreement would have been reached on a proposal to embody the principle that small states should not be made to consider great reductions in tariffs, and that the transition periods should in some cases be extended.

There was still a peculiar difficulty for small states in making their voices heard in WTO negotiations, in relation to other developing countries. Small states were not recognised by the WTO as a group: only the group of least developed countries was recognised as such. There was considerable debate within the WTO about whether it was helpful to identify small states as a discrete group. Many of their problems were shared with other developing countries. It was therefore necessary to identify where their common interests lay, and what strategic alliances would have to be made.

It was clear that part of the solution to the question of capacity-building for small states was through better group participation. It would be welcomed, for instance, if the ACP Secretariat, the Eastern Caribbean Secretariat, and other groupings, were to send observers to WTO meetings. The Commonwealth could also perform a useful function as a channel of informal communication between the WTO and small states. The more dialogue, the more could be done to meet the needs and aspirations of small states.

The fourth speaker, H.E. Sheelagh M. De Osuna, applauded the way in which the concerns of small states had at last risen higher on the international agenda. The small states of the Commonwealth were pleased at the rate of progress since the Edinburgh CHOGM. It had taken a degree of political will on the part of small states themselves to make their voices heard, but they had found strong support from the Commonwealth Secretariat and the World Bank. It was gratifying to hear Sir Humphrey Maud say that they saw their task in the future as that of putting salt on the tails of other international agencies.

The Interim Report provided some very helpful suggestions as to how the concerns of small states might be addressed. Nevertheless it had to be said that the report could only conceptualise the framework for some of the problems and their possible solutions.

At the heart of the problem for small states was the question, were they able to make the transition to participation in the new global trade regime? The successful conclusion to the negotiations for a successor to the Lomé conventions at least afforded small states a breathing space. Nevertheless, whatever the length of transitional regimes, small states would still have to become internationally competitive after a certain number of years. The solution, of course, was to diversify. But into what?

One of the most frequently touted 'solutions' for small states was to diversify into tourism. Tourism could certainly be of benefit. Some 24.7% of employment and 78.2% of foreign capital investment in the Caribbean were accounted for by tourism. But most of the tourism industry infrastructure was owned by foreign capital, and most of the profits went back to the owners. Many of the products required by tourists (such as dairy products) were not produced locally, and so led to rapid growth of imports. Even worse was 'all-inclusive' tourism, the current growth area: this was a kind of 'fortress tourism', in which the tourists hardly interacted at all with the locals, and payments were made, up front, to foreign tour operators and very little percolated through to the local economy. Tourism could never provide a satisfactory replacement for an economy built on smallholdings, in which the profits were kept at home. For most residents of small states, the rapid growth of tourism meant that real estate prices rose dramatically and they could no longer afford to buy land, let alone their own beachfront. Tourists were also sometimes very destructive of the fragile environments of lagoons and reefs, and could bring with them deadly diseases and viruses: Tobago was currently suffering an increasing AIDS problem, probably introduced by foreign visitors. It was perhaps understandable that the late Eric Williams, for many years Prime Minister of Trinidad and Tobago, said that he had no wish to see his country attract tourism, on the grounds that tourism made the local population into a 'nation of maids, taxi drivers, pimps, and prostitutes'. Tourism looked good as a factor in a country's GDP, but it often left little behind in terms of economic benefit for the host country. In short, tourism was no 'panacea', as the report said.

The IT and communications revolutions undoubtedly afforded opportunities to small states. Nevertheless much depended on the cost of building up telecommunications facilities. In the Caribbean, much of the telecommunications industry had been locked up for the previous twenty-five years in the hands of a single multinational company, exercising a monopoly. Trinidad and Tobago was currently trying to negotiate its way out of its agreement with Cable & Wireless, as were other Caribbean states, but was finding that the costs of such an operation were very high.

Another area into which small states were being encouraged to diversify was financial services. Nearly all the Caribbean states were moving, at varying speeds, in this direction. There was a boom in 'brass plate' operations, but it would be very difficult for most small states to build financial services sectors to compete with London or even Jersey. Many companies preferred to operate out of 'offshore centres' because this guaranteed secrecy. In the very nature of things, it seemed to be only a matter of time before changes in tax law in the developed countries closed the 'loopholes' which enabled the small states to offer such advantages. The competition for legitimate financial services business internationally was intense.

Small states faced a similar Catch 22 in relation to foreign direct investment. Trinidad and Tobago had, in the mid-1990s, embarked on a series of measures designed to encourage foreign investment : removing exchange controls, lowering trade barriers, strengthening the legal framework, introducing tax incentives. But this had led to a classic example of 'jobless growth'. For instance, a liquefied natural gas plant, built at the cost of some $1.3billion, after a construction period employing over 2000 people would only employ a dozen or so people. It was difficult to retain benefits to the local economy, as it was necessary to have tax incentives to encourage investment in the first place. In short, terms and conditions for foreign investment had to be carefully and skilfully negotiated.

• In discussion, it was agreed that access to low-cost telecommunications was vital if small states were to take advantage of the opportunities afforded by the IT and communications revolutions. But the matter was by no means straightforward. Some countries were locked into crippling regimes imposed by multinational monopolies; in others, telecommunications authorities were seen as cash cows to be milked by governments. Small states needed both advice and support in order to benefit from technological progress.
  
  
• One member of the audience pointed out that small statehood was not something imposed, but the result of free choice. Small states had decided not to be part of larger polities, and it was inevitable that they would have to make compromises and even sacrifices in order to maintain their separateness. While there was some agreement with this point of view, it was pointed out that many small states had not had any other options at the time of their independence. In the Caribbean, former British colonies were given their independence at different times. But once independent, the difficulties of amalgamation or unification were much greater. It was in any case by no means clear that even if they amalgamated small states would be in any stronger a position.
  
  
• Various speakers noted two different tendencies at work in international society: on the one hand a tendency towards regional economic partnerships (as, for instance, formed the basis of much in the new agreement to replace the Lomé conventions), and on the other a tendency for large states increasingly to make decisions at a regional or other sub-national level (as was the case, for instance, in Brazil). It was therefore likely that small states would find themselves cooperating more in some areas, while maintaining their separate identities in others.

Session V: Brisbane and Beyond

Chair:
Tim Slack (Chairman, The Round Table)

Speakers:
Michael Binyon (Diplomatic Editor, The Times)
Peter Lyon (Editor, The Round Table)
James Porter (Former Director-General, Commonwealth Institute)

Michael Binyon said that an important factor in the future prospects of the Commonwealth would be the attitude of the British government. The Labour government had come to power with great promises. In opposition, Robin Cook had picked up that the Conservatives had become hostile to the Commonwealth, and saw an opportunity to steal the Conservatives' old clothes. Labour therefore proclaimed its commitment to the Commonwealth as a great family of nations, and said that it would make support of the Commonwealth one of its priorities.

Five months after Labour's accession to power, the Edinburgh CHOGM provided Labour with an opportunity to demonstrate its commitment. In this it was partly successful. There was no great difference of view between the UK and its partners. The government could claim that Britain was back in line with the rest of the Commonwealth. But even at Edinburgh there were indications of the government's real attitude towards the Commonwealth. The CHOGM was treated as a showcase for the Labour government and particularly for Tony Blair. There was a lot of razzmatazz about new Labour, a new Commonwealth, even a new Queen. But there was also a touch of impatience in the organisation of the meeting (exemplified most noticeably by the cutting right back of the retreat), and in the tone of the government's approach. It was clear that the government felt that the Commonwealth was too diffuse, too long-winded, too unfocused; that it spent too much of its time merely networking; and that it would be very difficult to make it the focus of a new drive for 'modernisation'. This sat ill with the Prime Minister's way of doing things. Notoriously, he didn't like open agendas.

Some Commonwealth issues the British government had made its own. In particular, it liked to see the Commonwealth as an instrument of an ethical approach to international relations. Ethics, morality, and good government all featured prominently in its pronouncements about the Commonwealth. But it was keen to take credit for re-vitalising the Commonwealth in this area, rather than acknowledging the Commonwealth's long-standing role. On Nigeria, Britain supported the work of the Task Force, but was keen to see the outcome as the result of pressure by Britain and its European partners, not by Britain and its Commonwealth partners. The British government was reluctant to give much credit to the Commonwealth.

Since the Edinburgh CHOGM, the attitude of the government towards the Commonwealth had largely been one of neglect. Its earlier claim that it would put itself at the heart of the Commonwealth had suggested that the government would come up with some new initiatives. But there had been very few. Instead, the tone of impatience had noticeably increased. Tony Blair's desire to get home early from Durban had almost been an embarrassment.

The attitude of the government had, by and large, been reflected in media coverage. What coverage there had been had focused on the difficult and disruptive elements in Commonwealth relationships-as when British media coverage of the Durban CHOGM focused on the strained relations between Tony Blair and Robert Mugabe. Chief Emeka Anyaoku had quite rightly asked why there had not been more coverage of the positive achievements of the Commonwealth. But the truth was, that there was very little room in the media for coverage of emollient policies and quiet diplomacy. The media's neglect of the Commonwealth fed back into Downing Street. There were few signs as yet that Britain would in reality adopt a more positive role in the Commonwealth.

James Porter took as his theme the challenge posed by the Fancourt Declaration: that of seizing the opportunities, but at the same time minimising the risks, of globalisation. The achievement of the Commonwealth in passing this declaration, with its emphasis on the need to promote human development, had been significant. Nevertheless, it was not enough for the international community just to minimise the ill-effects of globalisation. There remained a much greater challenge, which was to tackle the persistent problems of poverty and deprivation.

The Commonwealth input into the global economic debate had been especially strong under the Secretary-Generalship of Sridath Ramphal. This had led to the Secretariat's promotion of ideas for a New International Economic Order. This idea had for a time been influential, but it failed to gain the support of the powerful, and it ended in little more than windy rhetoric. But the world was now very different from when ideas for a New International Economic Order had been discussed. On the one hand, the problem of poverty had become more urgent. Absolute poverty had been expanding, and the poverty gap had been growing both within countries and as between countries. On the other hand, the world's capacity to tackle the problem had also increased. The current strategies of the international community would not lead to fundamental change. Yet the current situation could not be sustained. In the field of economics, it was striking how many leading figures were now arguing that neo-classical theory was inadequate. Inaction was not an option: this would make for an unsafe world for all. All had a stake in a redesigned world, in which the problems of poverty, disease and conflict would be the focus of international efforts.

The real question for the Commonwealth Secretariat and for other international agencies was how to mobilise efforts to tackle the problem of poverty. The efforts of Secretary-General Chief Emeka Anyaoku should be continued. The Commonwealth could play a vital part in helping to devise ways of democratising the global economic and financial frameworks, and of promoting the development of civil society. There was now an opportunity to make lasting progress in this field.

It was necessary for all countries to reject narrow self-interest, and to promote co-operation and partnership. The Commonwealth Secretariat had a significant role to play here, and could take a lead in the wider educational effort necessary to bring about this shift in international priorities. Public support in the developed countries was vital. In partnership with the Commonwealth Institute, the Commonwealth Foundation, and a wide range of Commonwealth NGOs, the Commonwealth Secretariat could provide imaginative input into the global debate, linking poverty and exclusion as the great enemies of democracy. In this way the Commonwealth could act as a catalyst for a shift in priorities within the international community at large, promoting a new economic framework and the economic dimensions of human rights, and linking development and democracy.

The third speaker, Peter Lyon, took as his theme the opportunities and prospects for the Commonwealth in the twenty-first century. The Commonwealth was at a significant moment in its development. It was leaving the age of Emeka Anyaouku and entering the age of Don MacKinnon. What would be the likely future shape of the Commonwealth, and the forces moulding it? Put another way, there were many competing Commonwealths. Which was likely now to be uppermost?

The Commonwealth had in the past been partly a 'procrastinatory' Commonwealth. At Durban, the Commonwealth Heads of Government had failed to go the extra mile when it had come to the future of CMAG, or how to respond to developments in Pakistan. It had been said of the League of Nations that 'procrastination was its favourite device'. There was a danger that the Commonwealth, or at least the Commonwealth Heads of Government, might go down the same path.

A second Commonwealth had been the 'populist' Commonwealth. The Commonwealth had moved beyond rhetoric to become in reality also a 'people's Commonwealth'. There was a new balance between NGO and IGO activity. CHOGMs were now very different events to what they had been only ten years before: there was far more lobbying, far more organisations represented and taking part in specific activities, and many more public events and festivities and other related activities. It had to be said, however, that at Durban the attempt to make the inter-governmental Commonwealth responsive to the 'people's' Commonwealth had not been a great success. There had in particular been little in the way of serious briefing from the Commonwealth Secretariat or from the big delegations, or ineraction between them and the non-governmental sector. At Brisbane there was a need to do things much better. In Commonwealth activities more generally, there needed to be much more attention to this interface between the NGO and IGO sectors.

A third Commonwealth, which had so far been very much lacking, was a 'proprietorial' Commonwealth: a sense of pride, community, and ownership of the Commonwealth amongst its peoples at large. One of the great failures of the Commonwealth had been its inability to generate a feeling of attachment. The Commonwealth had been particularly low in the order of priorities for its largest member, India. But this was also true of the United Kingdom and of many other states. This lack of a sense of ownership had led to many missed opportunities.

A fourth Commonwealth, and one which was to be encouraged, was a 'proactive' Commonwealth. It was essential that the Commonwealth should take the lead in tackling the problems of its members and of the world at large. Nevertheless, partly because of a problem of resources, this was again an area in which the Commonwealth had hitherto been deficient.

This latter point, but the future of the Commonwealth more generally, begged the question whether the resources allocated to the Commonwealth would continue to be eroded. The Commonwealth Secretariat had reached a point where there was no longer any room for a reduction of its staff without grave effects for its efficacy and efficiency. Few international agencies were so exposed to recurrent investigations and audits. More resources were needed in particular for education and youth affairs. The Commonwealth had in the past paid little more than lip-service to the importance of youth affairs. But it was essential that the Commonwealth should widen its appeal in particular amongst young people.

The Commonwealth Secretariat certainly needed to become more open and transparent. It needed to cultivate relationships with the media and with outside experts. Partnership-building was essential. The Secretariat also needed to decentralise, and to reduce its London-centricitry. The Commonwealth was now a polycentric Commonwealth, not just a post-colonial club. There was a need for Commonwealth institutions and structures to reflect this.

The Commonwealth also needed to build on its recent experience of working with business, and to re-double its efforts to promote development. There was a need to rebuild the Commonwealth Fund for Technical Cooperation, which had done valuable work, but needed greater resources, a new set of roles, and a new mandate. There was also a need to make better use of the Commonwealth network of NGOs. The strength of the Commonwealth NGO sector provided real opportunities.

While it was foolish to pull up saplings to see if they had taken root, the Commonwealth needed to engage in a fresh and fearless examination of its fundamentals. Chief Emeka Anyaoku's ten years as Secretary-General had been notable for the way he had succeeded in operationalising the Harare and Millbrook declarations, and in adapting the Commonwealth to a post-dirigeiste world. The Commonwealth awaited the arrival of Don MacKinnon with interest.

• Several speakers disagreed with Michael Binyon's characterisation of the British Labour government's attitude towards the Commonwealth. Some felt that there had been a change of climate at the highest levels of government, by comparison with the attitude of the previous Conservative administrations (although the Howell Report was also given credit). It was pointed out that the incoming Labour administration had tried to lengthen the Edinburgh CHOGM, which had already been arranged by its Conservative predecessor, but had found the difficulties and objections too great. Tony Blair clearly liked the central part of the CHOGM, the retreat, as he had introduced one for G8 leaders at the Birmingham summit. Although the government's general contribution to the Commonwealth had continued to decline, some £6 or 7 million had been made available since Edinburgh for specific Commonwealth-related projects, such as the Iwokrama rainforest project, the Commonwealth Business Council, and good governance projects.
  
  
• On the other hand, several speakers supported Michael Binyon's position. It was clear that Tony Blair in particular had exhibited frequent signs of impatience with the Commonwealth and its procedures. Robin Cook appeared to feel neither particularly supported by his Commonwealth partners nor particularly anxious to secure their support. If there had been more engagement with CMAG, it was unlikely that the Sierra Leone arms scandal would have arisen. Several speakers said that they thought that the government's record on issues of particular interest to the Commonwealth-notably development-had been incomparably better than that of its Conservative predecessor. Claire Short's work at the Department for International Development came in for particular praise. But DfID, along with other government departments, had too often failed to spot the distinctive Commonwealth angle to a particular issue, and had therefore failed to make good use of the opportunities which the Commonwealth afforded.
  
  
• It was agreed that the next few years would be crucial in respect of the British government's attitude to the Commonwealth. Much would depend on the attitude of the Prime Minister in particular to the work of the high-level review group under Thabo Mbeki. Would Tony Blair be prepared to engage personally in this review? With the Finance Ministers meeting in the UK in 2002, the Commonwealth Games, and the Queen's golden jubilee, there would be other opportunities to raise the profile of the Commonwealth. The British government's attitude would be crucial, but NGOs also had an important role to play, particularly in promoting public awareness.
  
  
• It was suggested that the Commonwealth was in relatively better standing in the developing than the developed world. In the latter it was largely ignored. Perhaps part of the solution to this problem was an image-change for the Commonwealth. There was a need for the Commonwealth's image to match its aspirations, as a forward-looking and dynamic association. The work of the Commonwealth Secretariat, frequently consisting of behind-the-scenes diplomacy, did not always lend itself to a high media profile. Nevertheless there were ways in which image and presentation could be improved. It was also important for NGOs to do their bit to raise awareness and promote discussion.
  
  
• There was considerable discussion of the ways in which the Commonwealth could help influence the impact of globalisation, and in particular its role in promoting mutually beneficial, and equitable, trade liberalisation, and good governance. It was argued that the Commonwealth had a comparative advantage in many key aspects of economic activity. Growth rates in English-speaking countries were well above the global average, and investment costs in Commonwealth countries were significantly lower. The Commonwealth as an organisation was less formal, lees confrontational, more constructive than many other international agencies. As such it fitted well what was likely to be the ethos of the coming century. In such areas as debt relief, the particular concerns of small states, and corruption, the Commonwealth had already spear-headed international efforts. There were many other areas in which the Commonwealth could take a leading role.
  
  
• It was felt by some speakers that the Commonwealth still had a long way to go in involving the private sector. It was not possible to speak of a 'private sector Commonwealth', as it was to speak of a 'people's Commonwealth'. In a situation where there was a constant struggle for resources, and in which the aims of the Commonwealth in many areas of policy were consistent with the interests of the private sector, the building of partnerships with the business community could only benefit the Commonwealth.
  
  
• Several speakers were in favour of a major new initiative in support of education in the poorest countries. Free primary education should be seen as a basic human right. This was an area in which the Commonwealth was rich in networks and experience, and could make an outstanding contribution.
  
  
• Several speakers felt that there should be a stronger linkage between aid and good governance, so that countries which were deemed to be in defiance of internationally-accepted norms would find their share of aid drying up.
  
  
• It was suggested by one speaker that the Commonwealth might develop links with other English-speaking countries, notably the United States, and Eire, and might even gradually transform itself into an association of the wider English-speaking world. Several speakers disagreed with this suggestion. Both the United States and Eire were unlikely to be attracted to what some would inevitably portray as an attempt to reverse the consequences of the wars of independence. The Commonwealth itself would undoubtedly lose much of its cohesiveness in such a process. A looser association would mean that much of the valuable work of the Commonwealth would be impossible.
  
  
• It was suggested that the trend towards a more rules-based organisation should continue. Several speakers expressed dissatisfaction that the proposals for strengthening CMAG had been shelved at the Durban CHOGM. The mechanisms in place were still insufficient to deal effectively with the unfinished business of the Harare Declaration.
  
  
• It was felt that the Commonwealth had much unfinished business in other areas, such as education, gender issues, local-national government relations, and the myriad issues wrapped up in the phrase 'sustainable development'. Some speakers felt that what the Commonwealth needed was the time and resources to settle down and pursue its existing priorities through existing programmes and structures; others felt that much would be gained from a review such as that now undertaken by Commonwealth governments. It was widely agreed that as the high-level review would be taking place, it was essential for NGOs to make their own views known.
  
  
• A number of speakers returned to the point that, without a significant increase of resources, the future work of the Commonwealth would be impeded.

Participants

Ron Archibald, Head, EU-Developing Countries Trade Relations Unit, Department of Trade and Industry; Colin Ball, Director, Commonwealth Foundation; Tendai R.W. Bare, Director, General Technical Assistance Services Division, Commonwealth Secretariat; Sir Nicholas Bayne, Round Table/ Visiting Fellow, London School of Economics; Michael Binyon, Round Table/ Diplomatic Editor, The Times; Richard Bourne, Round Table/ Director, Commonwealth Policy Studies Unit; Colin Bright, Head, Commonwealth Coordination Department, Foreign & Commonwealth Office; John Cook, Principal, Cumberland Lodge; Sheelagh M. De Osuna, High Commissioner for the Republic of Trinidad and Tobago; Arthur R. Donahoe, Secretary-General, Commonwealth Parliamentary Association; Joshy Z. Easaw, Round Table/ Research Fellow, School of Economics, Middlesex University; David French, Round Table/ Director-General, Commonwealth Institute; Ian Gillham, Executive Director-designate, Commonwealth Journalists Association; David Green, Publishing Director, Taylor & Francis; Meredith Hooper, Round Table/ Partner, Hooper Communications; Derek Ingram, Round Table/ Founder, Gemini News Service; Alexandra Jones, Round Table/ Chief Executive, Westminster Foundation for Democracy; Mohan Kaul, Director-General, Commonwealth Business Council; Peter Lyon, Editor, The Round Table; Nana-Serwa Mancell, Head of Public Affairs, Royal Commonwealth Society; Sir Peter Marshall, Chairman, Joint Commonwealth Societies Council; Stephen Matlin, Director, Human Resources Development Division, Commonwealth Secretariat; Sir Humphrey Maud, Round Table/ former Deputy Secretary-General, Commonwealth Secretariat; Alex May, Secretary/ Treasurer, The Round Table; Simon U.R. Mlay, Director, Tanzania Trade Centre; Stuart Mole, Round Table/ Director and Head of Secretary-General's Office, Commonwealth Secretariat; Sally Morphet, Head, Global Issues Research Group, Foreign & Commonwealth Office; Muhammad Muda, Counsellor, Malaysian High Commission; Martin Mulligan, The Financial Times; Abdel-Fatau Musah, Research and Publications Officer, Centre for Democracy and Development; Sandra Pepera, Chief Programme Officer, Political Affairs Division, Commonwealth Secretariat; David Peretz, Senior Adviser, World Bank/ Commonwealth Task Force on Small States; James Porter, Round Table/ former Director-General, Commonwealth Institute; S.K. Rao, Director, Strategic Planning and Evaluation Unit, Commonwealth Secretariat; Prue Scarlett, Round Table/ Manager, Public Affairs, Commonwealth Business Council; Tim Slack, Chairman, The Round Table; Elizabeth Smith, Secretary-General, Commonwealth Broadcasting Association; Chris Stevens, Institute of Development Studies, University of Sussex; Dame Veronica Sutherland, Deputy Secretary-General (Economic & Social Affairs), Commonwealth Secretariat; Sir Roger Tomkys, Round Table/ Master, Pembroke College, Cambridge; Peter Tulloch, Director, Development Division, World Trade Organisation; Sidney van Heerden, Counsellor, South African High Commission; Sir Robert Wade-Gery, Round Table/ Vice-Chairman, Barclays Capital; Lawrie Walton, Section Manager (Social Sciences), Taylor & Francis; Trish Williams, Chairperson, UK Branch, Commonwealth Journalists Association; Geoffrey Williams, Director of Studies, Cumberland Lodge; Sandra Willson, Conference Coordinator, Cumberland Lodge; Keith Yeomans, Independent Consultant and Author.

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