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Basic Human Needs and the Globalisation of the Economy

Authors:

Xabier Barrutia

University of the Basque Country

Alfonso Dubois

University of the Basque Country

Patxi Zabalo

University of the Basque Country

We will begin with a theoretical reflection on the concept of development and its required ethical references. A characterisation of human development which takes as its defining element the well-being of all people leads us to the consideration of human rights as a necessary tool to achieve this global objective. In this consideration, we will examine to what extent the international community accepts these ideas and we will expose the limits of the Millennium Declaration. In the second section, we will look at the reality of globalisation. This process of globalisation is seen as economically exclusive and involves the neo-liberal construction of rules, such as those of the World Trade Organisation, which respond to the interests of the multinationals companies. As a consequence of this process of globalisation, inequalities in income distribution have increased and poverty and hunger remain persistent problems, while basic medical care is beyond the reach of most of humanity. This is due to market logic, which revolves around business profits rather than the satisfaction of human needs. For this reason technological advances, particularly those in the field of biotechnology, are not a solution in themselves, but rather require a reconsideration of the role of the public sector in order to change their orientation.

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CHAPTER 29

Basic Human Needs and the Globalisation of the Economy

Xabier Barrutia, Alfonso Dubois and Patxi Zabalo

We will begin with a theoretical reflection on

the concept of development and its required ethical

references. A characterisation of human development

which takes as its defining element the well-being

of all people leads us to the consideration of human

rights as a necessary tool to achieve this global

objective. In this consideration, we will examine to

what extent the international community accepts

these ideas and we will expose the limits of the

Millennium Declaration. In the second section, we

will look at the reality of globalisation. This process

of globalisation is seen as economically exclusive

and involves the neo-liberal construction of rules,

such as those of the World Trade Organisation, which

respond to the interests of the multinationals

companies. As a consequence of this process of

globalisation, inequalities in income distribution

have increased and poverty and hunger remain

persistent problems, while basic medical care is

beyond the reach of most of humanity. This is due to

market logic, which revolves around business profits

rather than the satisfaction of human needs. For this

reason technological advances, particularly those in

the field of biotechnology, are not a solution in

themselves, but rather require a reconsideration of

the role of the public sector in order to change their

orientation.

1. ETHICS AND ECONOMIC DEVELOPMENT

The consideration of the ethical dimension of

economic activity with regard to developing countries

is closely linked to the definition of development

that has been dominant until very recently. Modern

development economics, which began after the

Second World War, had a limited view of

development centred on the problem of identifying

and quantifying economic growth, which has marked

its later evolution. Although other elements were

added at a later date, their inclusion did not alter

this narrowly framed vision of the concept of

development. It was implied that the study of

development was in no way connected to the

philosophical question of the need for a change of

values or the search for new institutions and rules.

Development studies were limited to technical

solutions regarding the mobilisation and assignation

of factors that would lead to previously established

objectives.

Thus, the development tradition has been

characterised as being merely descriptive. The

development debate has focussed more on the ways

and means than on the goal. One single development

objective was legitimised: the goal for all countries

was modernisation. In this context, the ethical

dimension is regarded as an added extra or comple-

ment which acts to lessen the negative consequences

of modernisation or in order to design specific social

policies, but which does not question the objectives

of development.1

This does not mean that there was a complete

absence of critical vision in the following decades,

particularly in the 1960s, when the objective of

redistribution with growth was proposed, together

with the need to place job creation at the centre of

development and the priority given to the satisfaction

of basic needs (Thomas, 2000). However, the truth

is that these attempts were not strong enough to

question basic development objectives and their

influence was short-lived.

In the 1980s all ethical and evaluative consi-

derations were abandoned and the idea of economic

growth and the attainment of macroeconomic

objectives resumed their central role. This was the

era of structural adjustment. The terrible social

consequences of this policy for the majority of the

population led to the need to introduce the concept

of «adjustment with a human face» and of the social

dimension as a new task.

However, the term development can be used in

a normative sense as well as a descriptive one, that

is to say it can be used either to describe an existing

situation or to project a desirable alternative. Until

now, the descriptive use of the term has been

prevalent, with the normative use limited to critical

viewpoints or to the defence of alternatives. For

Goulet (2000), rather than this more common use,

development is «above all a question of attitudes and

human values, objectives defined by each society and

criteria to determine which costs are tolerable and

can be borne, and by who, in the process of change».

Development is an ambiguous adventure that is born

full of tensions between which goods are desired, by

who and how to obtain them. Therefore the central

242 XABIER BARRUTIA, ALFONSO DUBOIS AND PATXI ZABALO

questions of development include ethical judgements

concerning what is «the good life»; the definition of

the objectives which must be achieved to reach a

fairer society; and, the type of relationship which

should be established between people, and between

people and nature.

THE INTRODUCTION OF THE

NORMATIVE DIMENSION

At the end of the 1990s, a certain change can

be seen taking more into account the normative

dimension of development. This new tendency has

arisen from the conjunction of a series of processes.

The most immediate of these is the failure of the

prevailing model of development to reduce the levels

of poverty – a phenomenon which, for some, is

increasingly regarded as a threat to the system while

for others is seen as the main impediment to

development. Above all, the persistence of poverty

has become an ethical scandal for an international

community that bases the legitimacy of its world

order on the concepts of democracy and peaceful

coexistence. How can a model of development that

perpetuates poverty and generates inequality be

sustained at the same time as it proclaims democracy

and the respect for human rights as the basis of

society? Poverty is the great challenge for a world

that contains more than enough resources to satisfy

basic needs.

In the light of this, economists have tended to

review the experience of the last few decades and

take note of the doubts over the general premises of

development economics (Adelman, 2000). The

legitimacy of the model can be questioned both from

the point of view of justice and from that of

effectiveness, that is to say at the level of the very

conception of the objectives or priorities of develop-

ment or at the level of the policies used to obtain

results.

Development is a historical concept, which

means there is no one fixed definition of the term

but rather an evolution, based on the dominant values

and thought in society. Thus, development as it is

currently understood is a very different thing from

that which was defined forty years ago. Each society

and each era has its own idea of what development

is, based on the convictions, expectations and

possibilities which predominate. In short, the concept

of development is related to the idea of the future

that each society proposes as a goal for the collective

of humanity. When we establish the priorities of what

we understand by development, we are merely stating

our own vision of what we want our future to be.

Sometimes, this dimension is hidden and

development is shown as determined by external

laws, but those who defend this position are the

beneficiaries of the current state of affairs and have

no particular interest in changing them. It must be

argued as strongly as possible that the decision over

which should rest the objectives of development

should be the result of a grand consensus in which

everyone participates, because the definition of the

future cannot be the exclusive preserve of the few.

Thinking about development means thinking about

the future we want to build.2

These considerations are particularly applicable

to our society today, where, when we talk about

development, we assume this implies something

desirable and legitimate. The word development is

unconsciously identified with a positive perception.

However, behind many proposals that include the

term development some questionable objectives are

hidden. It is important to maintain a critical attitude

in order to discover which proposals really lead to

fair development and which respond only to the

particular desires of certain powers or minorities.

In the situation of profound change in which

we are living in the era of globalisation, a concern

for change and for justice cannot elude the answer

to questions such as: What are the existing visions

of the future? And what legitimacy do these visions

have? This implies knowing how to differentiate

between the proposals that maintain the current

situation of power relations and their alternatives,

and understanding the different forces at work and

the historical processes which have led to the current

situation. It implies becoming aware of the moment

in which we are living and taking on an active role

in the construction of the future, not as the only

agents for change but rather co-operating in a

definition of the future that we consider the most

human and viable.

This progressive opening up to the idea of the

ethical considerations of development has occurred

at different speeds, and we can highlight three levels

of the inclusion of the concern with the normative

use of the term:

a) The ethical dimension is seen as a mere append-

age. This position limits itself to admitting that

development consists of more than just the

economic dimension.

b) There is an ethical questioning of the processes

and policies which lead to development, but not

of its objectives. It is recognised that not all

processes are valid, that participation is nece-

BASIC HUMAN NEEDS AND THE GLOBALISATION OF THE ECONOMY 243

ssary to achieve change and that people need to

participate in the process, but this does not imply

that different objectives should be proposed.

c) An authentic normative vision which states that

development is concerned with objectives and

processes. The inescapable questions which this

normative development poses include: i) a

review of what is desirable, which implies the

establishment of ethical criteria to define what

we understand by «the good life» or by well-

being; ii) a reconsideration of what develop-

ment is possible, which implies the establish-

ment of criteria related to justice which will

define the objective that can be achieved.

With regard to this last viewpoint, the UNDP3

has played a key role in the diffusion of this human

development approach, considering the question of

human well-being as the objective to be achieved,

over and above mere economic growth.

THE LIMITS OF TOLERANCE:

THE REFERENCE OF WELL-BEING

The questions posed by the normative

viewpoint become particularly relevant when we

consider the current state of poverty in the world.

How much can we tolerate when faced with people’s

hardship in today’s world? Is it correct to propose

different limits to what is tolerable according to each

society? This would be more understandable if the

limits to available resources did not allow the

definition of more ambitious objectives at a collective

level, as was the case in the past. Or, from a different

point of view, it would be acceptable to establish

differences so as not to fall into the illusory and

utopian desire to create egalitarian living standards

on a world-wide scale. This question, however, is

posed in a context characterised by an increasing

interdependence and by a sufficient availability of

resources and we must therefore pay special attention

to this differentiation of levels of poverty. One thing

is to propose the impossibility of immediately

reaching identical objectives, but quite another is to

deny objectives which are achievable. That is to say,

one thing is to recognise the limitations which exist

with regard to possible results and another is to define

these possible results on the basis of different

conceptions of what poverty consists of in different

countries and for different people.

The question we are posing is whether the

starting point for a scale of well-being differs

according to which people we are talking about, or

whether there is a universal benchmark. From a

normative approach, there is no doubt that there

should be one single reference point for all humanity,

even when the specific nature of that reference is

represented by multiple manifestations (Nussbaum,

1998). It is quite another matter that the task of

defining well-being is not easy and, above all, implies

commitment. Well-being as a reference for economic

activity and for social coexistence introduces a

situation in the future and formulates what people

want; it establishes open debate, tolerance and

participation as indispensable elements in the process

and formulates its the necessary minimum objectives.

It is clear that, from this point of view, we will reach

a very different understanding of poverty and of the

limits of tolerance of human need.

A careful definition of the concept of well-being

is fundamental in order to construct the normative

approach. Without sufficient reference to what we

understand by well-being, how to measure it and how

to insert it in economic analysis, the approach loses

its effectiveness and its claim to be an alternative.

How then can we define well-being? We should point

out here that the answer to this question does not

imply the definition of an ideal final objective but

rather seeks to establish under what conditions people

can develop themselves as human beings. To put it

in another way, under what conditions do people

cease to be in a bad situation and when can they

begin to feel well. In short, poverty is a concept based

on knowing when a human being has the opportunity

to develop his or her potential as a person. It consists

in defining positively the minimum capacities and

activities which enable each person to carry out their

own personal search for the way of life that satisfies

him or her.4

The priority objective is to make sure that

people can live as people. Determining at what point

a person really becomes a person does not imply

establishing the final result nor even the range of

possible desirable states that being a person would

mean. In fact, there would be many possible groups

or packages of different objectives which could be

reached. Poverty is definable if it can be precisely

pinpointed when a person has the capacity to advance

towards a desirable combination of states and make

the effort to gain the resources necessary to reach

this combination.

If we start from a definition of well-being based

on the capability and the freedom of people, we must

take into consideration the category of rights. On the

one hand, because a human rights perspective sees

people as conscious beings who freely choose their

life options and, on the other hand, because a rights

244 XABIER BARRUTIA, ALFONSO DUBOIS AND PATXI ZABALO

perspective recognises the need for people to obtain

certain basic .. capabilities. The language of rights is

a way to make the aspirations of well-being considered

basic for all people clear in the discourse of society.

A person’s well-being consists of an aggregate

of three elements: material achievements, rights and

freedoms. This aggregate is different for each person

but in every case must contain a minimum of each

of these three elements. Defined in this way,

individual well-being is ethically significant and an

object which can be demanded from economic

activity. The area of most resistance is found in the

acceptance of rights in the international arena. The

concept of rights as positive freedoms implies the

recognition of people’s access to certain goods, which

means there is a positive right to those goods whose

use or disposition cannot be left to the invisible hand

of the free market. The recognition that certain goods

and services are people’s right, because they are

necessary in order to reach fundamental capabilities,

introduces a new dynamic to the consideration of

the role played by these goods and services in

economic activity.

THE REFERENCES OF WELL-BEING IN

THE INTERNATIONAL COMMUNITY

In this framework of new references -access to

resources, well-being and rights- to what degree have

we seen a reform of the welfare proposals in the

international institutions and the aid donor

countries? Has the normative dimension been

introduced as a constituent part of development

discourse? It must be recognised that the practical

consequences of this proposal lead to different

complications. It is true that the World Summits

organised by the United Nations throughout the

1990s have proved to be a first step forward, albeit

an insufficient one. Although the Social

Development Summit, held in Copenhagen in 1995,

opened up new horizons, the international

organisations’ commitments have been put into

practice under a very limited vision of what well-

being means. Moreover, the programmatic

declarations have taken precedence over the recog-

nition of the rights of some and the responsibilities of

others in reaching development goals.

In 1996, the Development Aid Committee

(DAC)5 proposed the new goals for international

development to be reached in the 21st Century,

applicable to the actions of the donor countries and

agencies. These goals were later adopted by the

OECD, the World Bank, the International Monetary

Fund and the United Nations6, and have become the

benchmark for what orthodoxy considers the

desirable and feasible framework of well-being for

the economic South (or developing countries). The

Millennium Summit, held in 2000, ratified these

objectives as the grand commitments and challenges

for the coming decades. The Development Finance

Conference, held in Monterrey in March 2002, was

called to adopt the measures necessary to guarantee

fulfilment of these goals. The weakness of the

commitments made and of the arguments used in

this Conference clearly shows the difficulties concer-

ned with an acceptance of rights as the instrument

required to reach the basic goals of human develop-

ment.The goals proposed for 2015 in the Millennium

Declaration are the following: a) with regard to

economic welfare: reducing the percentage of poor

people, people without access to drinking water and

people who suffer hunger, by 50%; b) in the field of

social development: extending primary education in

all countries; c) eliminating the gender disparities

in primary and secondary education; d) reducing the

figures for infant mortality by two-thirds and those

for maternal mortality by three-quarters; e) improv-

ing access to primary health care, including family

planning; f) containing and beginning to reduce the

HIV/AIDS contagion rate; and, g) with regard to the

environmental sustainability and regeneration:

reversing the current trends and promoting strategies

for sustainable development.

How can we evaluate this strategic definition

of objectives from the viewpoint of the new references

of well-being? First, we must recognise the

importance of the proposed goals. No one could deny

that we are talking about necessary objectives for

any development model. However, at the same time

they are clearly insufficient, given that their sphere

of action is reduced to the participation in a very

limited area of all that development consists of.

Achieving a reduction of absolute poverty and hunger

and reaching the social development goals involves,

without a doubt, an improvement in people’s quality

of life.

Nevertheless, two questions need to be asked.

The first is, what is the concept of poverty used as a

base line? In other words which extreme situations

are considered intolerable and should provoke an

intervention over and above merely economic

considerations? In the last few years we have

observed a wide-ranging debate around the concept

of poverty and a wider vision of this notion has slowly

been accepted. The World Bank (2000) proposed a

BASIC HUMAN NEEDS AND THE GLOBALISATION OF THE ECONOMY 245

revision of this concept and of the strategy for the

fight against poverty in its World Development

Report 2000-2001. However, even though a more

multidimensional vision of this concept was intro-

duced, it remains a fact that the indicator which

continues to be used as the reference to measure

poverty corresponds to the narrowest definition

possible: that of an income of one dollar a day as the

threshold which determines whether a person is in a

situation of poverty or not. This reference does not

correspond to any previous study which would allow

us to state that income above this level permits a

person a satisfaction of the basic needs that allow

biological survival, let alone the development of their

capabilities. As a result, the limits of tolerance have

not been changed and made more demanding, but

have been maintained within totally inadequate

parameters with regard to the characteristics which

define the current framework and which we

mentioned above: interdependence and availability

of resources.

In second place, the precise delimitation of the

objectives which correspond to development aid

implies the establishing of a dividing line between

what is considered to be achievable through foreign

aid and what corresponds to the workings of the

market. In fact, the idea of development aid came

about as a mechanism designed to counteract what

the market was incapable of providing. It was

recognition of the need to develop instruments other

than the market if the countries’ development and

the reduction of the North-South divide were really

to be achieved. Development aid makes sense when

there are deficiencies in the provision of vital

resources without which development does not exist.

Development aid is a necessary correction to

guarantee that the development model achieves

certain results which are regarded as fundamental.

Development aid should be an instrument which

allows people to exercise their right to development

as people.

It does not appear farfetched to state that, with

this limited number of objectives, the international

institutions consider the remaining development

objectives –which are not regarded as priorities- to

be achievable with the application of the correct

economic policies. Development aid is only necessary

to reduce extreme poverty, to improve basic education

and in some, not very precise, areas to conserve the

environment. Other objectives, such as equity, the

realisation of human potential, increased equality

of opportunity, etc. are not proposed as development

goals. If these are not constituent parts of develop-

ment, it will be necessary to show clearly how it is

formulated the normative reference which allows us

to evaluate if the economic model works or not.

What perception of positive freedoms as rights

does the international community hold today, if it

cannot even guarantee the resources needed to reach

the minimum objectives?

FINAL CONSIDERATION

The debate around well-being, as the central

reference for the analytical category of poverty,

constitutes the unavoidable approach for a new

conception of the limits to be demanded from a human

development coherent with our world. It is a theore-

tical construction which cannot be dismissed as empty

academic theory, but rather seeks to become a

reference for public action and an evaluative reference

for economic activity. The election of one or other

approach to well-being is of great importance in the

determining of goals and the design of polices. The

definition of a threshold of a decent life which can be

applied universally is increasingly necessary. If this

does not happen, we are opening the doors to the

consolidation of an already existing discrimination

instead of overcoming it.

The definition of well-being should be the

foundation on which to build our relationships as

human beings. The main issue lies in establishing

which are our common interests with regard to our

future as humans. The grand question is to know

who we are with regard to the future. In other words,

what future do we want –and are we able- to build

for everyone.

In this project, both solidarity and exclusion

are possibilities. We will not converge around the

idea of a co-operative coexistence and of enriching

interdependence if we do not propose them as an

objective and as the definition of our species. A

universal definition of well-being could be the basis

of a common project. The question of participation,

therefore, becomes an absolute necessity in the

construction of a valid and valued human co-

existence.

In this situation, the base line is the individual

person. If there are no guarantees that every person

can participate effectively in the decisions adopted

by the most elemental group to which he or she

belongs, the process will be perverted from the start

by admitting poverty and exclusion. In the last resort,

this means denying a future to certain people. If the

people have not participated in deciding what they

want, giving them something material from outside

246 XABIER BARRUTIA, ALFONSO DUBOIS AND PATXI ZABALO

is useless. This only means we have taken away their

freedom to be what they want to be and we have left

them without a future.

A human being becomes human when his or

her potential is stimulated and this happens only

when he or she has a future. People experience well-

being when they can decide about their life, when

their capabilities and the resources available allow

them to distinguish, to choose, to reject, to progra-

mme, to desire, to feel, etc. The recognition of this

objective as the basis of humanity and the commitment

to carry out the public action required to achieve it is

the ethical basis which we propose in order to

construct a new human paradigm which provides

answers in the global dimension we are faced with.

2. ECONOMIC GLOBALISATION AND

BASIC HUMAN NEEDS

The term «globalisation» tries to explain the

increasing economic interrelations and the

multiplication of global networks of production and

information which appear to lead inexorably to a

true world market. We should therefore expect to

see, in the same way as when we talk about the single

European market, the free movement of goods,

services, people and capital throughout the world.

In other words, the most relevant fact is that the

economic reference space has widened, from state

to global level. This implies the creation of new

challenges and opportunities which all can take

advantage of, if they can adapt to the new situation.

From this point of view, economic globalisation

implies an improvement in human well-being.

However, this official discourse of Northern (and of

many Southern and Eastern)7 governments, which the

international economic institutions they dominate

have not ceased to repeat for the last two decades,

does not fit very well with existing economic reality.

AN EXCLUSIVE GLOBALISATION

The evolution of the world economy in the last

twenty-five years shows certain characteristics that

question this optimistic vision of the processes

underway. First, world trade flows have polarised.

The origin and destination of these flows have

concentrated in the Northern countries and in the

few Southern economies that have transformed

themselves in large-scale exporters of manufactured

goods.8 In this way, large swaths of the Third World,

including Sub-Saharan Africa and most of Asia and

Latin America, together with the countries in

transition in Eastern Europe, are being excluded from

world trade. The regulation of world trade has

contributed to this, since it is based on the

liberalisation of trade in manufactured goods in

general, but not that of textiles and clothing or of

agricultural products.

Secondly, despite the tremendous expansion of

international financial and currency markets, most

countries have remained on the sidelines of this

globalisation of capital flows. Investment is directed

essentially to Northern financial markets and, to a

much lesser extent, to no more than a dozen emerging

markets. Moreover, the list of participating developing

countries changes as some markets disappear after

each of the frequent international financial crisis.9

These crises are caused by the sudden fluctuations of

capital movements that increasingly escape from the

control of governments and multilateral institutions

and provoke great economic instability. Paradoxically,

these recurrent crises are of increasing concern to the

same state authorities and organisations such as the

IMF that have been recommending and putting into

practice this international financial liberalisation for

more than two decades.

In the third place, movements of labour are much

less important than at other historical periods and are

faced with increasing difficulties when the movement

is from South or East to North. As a result, the

defenders of globalisation tend to forget this

unpleasant lack of coherence. The globalisation is

thus seen as an exclusive and deceptive one: not

everyone can participate and not everyone can win.

A global market is being built for some concerns but

not for others: there is considerable globalisation in

the commercial field and even more in the financial

field, but there is no globalisation for the people who

are looking to improve their situation through

employment. Some participate more and more in this

global market under construction while others

remain on the sidelines and are marginalized.

Unequal income distribution has increased in

each country, both in the North and in the South

and, above all, in the East. The gap between

developed and developing economies has widened.

With the important exception of East Asia and the

Pacific region, the income per capita of the

developing countries is further from that of the

Northern countries than it was forty years ago. In

the extreme case of sub-Saharan Africa, the income

per capita is lower in absolute terms than thirty years

ago. Thus, the distance between the rich and the poor

has increased at a global level. The distance between

the richest 10% of world population and the poorest

BASIC HUMAN NEEDS AND THE GLOBALISATION OF THE ECONOMY 247

10% has increased from 1 to 19 in 1970 to 1 to 27 in

1997 (UNDP, 2001).

In accordance with this fact, poverty has not

diminished. Thus, even the arbitrary indicator of

poverty used by the World Bank shows the persistent

economic misery of excluded populations at the

beginning of the twenty-first century. According to

statistics from 1998, almost half the world population

-2800 million people- lives on less than two dollars

a day. Of this population, 1200 million people, a

fifth of humanity, live on less than a dollar a day.

The latter figure is similar to that of 1987, which

means that the percentage of the total population in

absolute misery has improved somewhat (from 28%

of the world population to 24%). But this is due

almost entirely to the sharp decline in poverty

experienced in China. Excluding China, the percen-

tage of the population with less than a dollar a day

would have been consolidated and the absolute figure

would have risen by 100 million in this period. This

increase is found principally in sub-Saharan Africa,

but also in Southern Asia, in Latin America and in

the East (Eastern Europe and the ex Soviet Union),

where the increase of poverty has been spectacular

and has reached 24 million people (World Bank,

2000).

Approximately two out of every three people

who have less than a dollar a day suffer from hunger

at the beginning of the twenty first century: 826

million people, forty million less than ten years ago.

However, the progress made in the reduction of

chronic malnutrition is much slower than was

foreseen in the World Food Summit in 1996 and

included in the Millennium Declaration. To continue

at the current pace, sixty years will be needed to halve

the number of people who suffer hunger, or in other

words in 2015 there will be close to 700 million

undernourished people. As it can be expected, the

geography of malnutrition and that of absolute

poverty are very similar. Southern Asia (in quantity)

and sub-Saharan Africa (in intensity) are the

unhappy winners: in both regions the absolute

numbers of undernourished people has increased and

the percentages have barely declined in the past

decade. However, neither the rest of Asia, despite

the progress made by China, nor Latin America are

free from this curse, which has also grown rapidly

in the Eastern bloc countries, particularly in the

former-Soviet republics (FAO, 2001).

As we have seen, the official pro-globalisation

discourse promises universal benefits derived from

the complete liberalisation of the economy; promises

which it does not fulfil. It therefore refuses to accept

that the kind of globalisation we are witnessing is

neither inexorable nor the only globalisation possible.

Speaking of human actions, there is always an

alternative. Against the dominant ideology and

neoliberal policies, «Another world is possible» as

the World Social Forum has proclaimed.10 Indeed the

actually existing globalisation is the result of the

implementation of a concrete, neoliberal project. This

project became dominant in the Northern countries

at the beginning of the 1980s and quickly extended

to the Southern countries and, from the 1990s

onwards, to the East, with the helping hand of the

World Bank and FMI’s structural adjustment

programmes. The clearest expression of this project

is the World Trade Organisation (WTO). Above all,

the official discourse hides the fact that the rules

with which globalisation is built do not even open

opportunities for everyone. It is not that everyone is

denied the same opportunities, which in itself would

be evidence of an injustice given the enormous

inequalities from which different countries start, but

rather that in many cases the opportunities are simply

not available for all. This is the case with the WTO

rules concerning agriculture, textiles, services or

intellectual property rights.

THE WTO, PARADIGM OF NEOLIBERAL

GLOBALISATION

The current world economic rules were written

at the peak of neoliberal influence, during the eight

years of negotiation of the Uruguay Round, which

ended in 1994 with the creation of the WTO. The

rules of the WTO, in force since 1995, present the

clearest expression of the playing field that those

who promote neoliberal globalisation seek to

construct. In fact, the WTO is a basic element in the

deepening of neoliberal practice. This practice is

different from the discourse in that it only liberalises

those markets which are convenient, at the required

rhythm for those who really dictate the rules of the

world economy: the major multinational companies

based in the Northern countries.

The agricultural and textile sectors have been

protected in this way for decades, in the framework

of the General Agreement on Tariffs and Trade

(GATT), and with the arrival of the WTO trade in

these sectors is being liberalised little by little. In

the same way, the service sector has been placed

under the WTO’s supervision, through the General

Agreement of Trade in Services (GATS) and those

areas (financial services, telecommunications, etc.)

where the United States and the European Union

248 XABIER BARRUTIA, ALFONSO DUBOIS AND PATXI ZABALO

believe their companies will gain advantages are

beginning to be liberalised. At the same time

migrations of labour are explicitly excluded from the

WTO’s field of competence, while the Northern

countries have imposed a uniform projection of

intellectual property rights, much to the advantage

of the multinational companies, which obtain ever

larger incomes from the trade in this matter.

The Agreement on Trade Related Intellectual

Property Rights (TRIPS) is one of the central pieces

of this construction. Another is the capacity of the

WTO, through its Dispute Settlement Body, to

impose economic sanctions on countries that do not

comply with WTO rules. No other world-wide

organisation has such a capacity. It should be pointed

out that these sanctions could consist of intersecting

reprisals, by which the failure to comply with TRIPS

rules can be punished by a restriction in imports of

goods, which would fall under GATT regulations.

This explains the presence of intellectual property

rights, which were already controlled by the World

Intellectual Property Organisation (WIPO), in the

WTO. It also explains the repeated attempts of

Northern countries to widen the field of competence

of the WTO to almost any «trade related» matter:

investment, labour rights, environmental protection,

etc. TRIPS establishes minimum rules on the

protection of patents, registered trademarks and

author’s rights which must be complied with by all

member countries of the WTO. There are fixed

timetables for developing countries to adapt their

national legislation, generally five years, which have

already expired, plus a further five years when they

are obliged to introduce a law for a previously

unprotected sector. Without wishing to minimise the

importance of the other two questions, we will centre

our attention on the effect that this universalisation

of patents causes on Southern economies. TRIPS

implies levelling up of the protection on innovations

by means of patents, so that the absence or

«weakness» of protection should be strengthened to

the level of the most powerful economies. This

implies, among other things, a minimum life of

twenty years for patents, both for products and for

processes, and their extension to all sectors of the

economy. Thus – and this implies a novelty even for

developed countries- the extension of patents to

certain life forms. Effectively, although article 27.3

of TRIPS allows countries to ban patents on plants

and animals, it obliges them to accept patents on

microorganisms, plant varieties and microbiological

processes.

This is a very controversial matter from many

different points of view. The «patents on life» are

the subject of a debate that starts with the denomi-

nation itself, rejected by industry for reasons of public

relations. However, apart from the discussion over

the name, it appears obvious that a patent can only be

applied to something that has been invented. And

biological material is discovered not invented.

According to the basic principle of patents legislation

developed since the industrial revolution, only

inventions can be patented, not mere discoveries.

Thus, the TRIPS rules appear to stretch the concept

of invention further than should be admissible,

allowing biotechnology to claim the creation of life

itself. The dubious legal solution has been to declare

that a naturally occurring substance is patentable if it

is isolated and purified by human intervention

(Drahos, 1999).

But the ethical questioning of TRIPS does not

stop there. Indigenous communities, Southern

governments and NGOs accuse TRIPS of providing

cover for bio-piracy by Northern multinational

companies, which patent biological material and

Southern peasantry’s ancestral knowledge (Shiva,

1998). This clearly enters into contradiction with

the United Nations Convention on Biodiversity,

which establishes the right of indigenous

communities to share the benefits of the use of genetic

resources (Khor, 2000). Thus, although these patents

on biotechnological «inventions» have legal cover,

numerous civil organisations and Southern govern-

ments consider them illicit and support their removal.

Moreover, the protection of intellectual property

does not seem very coherent with the basic principles

of the WTO, by which the liberalisation of trade will

be of benefit for everyone. Historically, intellectual

property rights, which were developed with the

arrival of capitalism, are linked to the ideas of

monopoly and privilege. Now they are justified with

the argument that there would be no investment in

research if it were not profitable. Thus, conven-

tionally, the protection of intellectual property rights

on a temporary basis implies a balance between

incentives for creativity and the defence of the public

interest (Sánchez Padrón, 2002). This temporary

privatisation of knowledge implies the private

appropriation of something that, by its very nature,

is the result of an accumulative public process

acquired by humanity during thousands of years, and

thus appears highly debatable. It would seem more

appropriate to use something which belongs to all

humanity for everyone’s benefit rather than only for

a minority. Moreover, it obstructs the unselfish

BASIC HUMAN NEEDS AND THE GLOBALISATION OF THE ECONOMY 249

sharing of information, which has been so important

in the progress of scientific research. Neither is it

true that creativity only exists when it produces

profits and is protected by intellectual property rights.

In fact, most major inventions have been developed

in a very different context.

The privatisation of knowledge and its

concentration in the hands of a few multinational

companies marks the orientation of scientific and

technological research towards the profitable, at the

expense of the necessary. Thus between 1979 and

1997, the number of requests for patents in the WIPO

rose from 3000 to 54.000. It is calculated that 97%

of world patents belong to Northern based compa-

nies. In the last twenty years, the constant privatisation

of research, financial and trade liberalisation and the

strengthening of intellectual property rights have come

together to increasingly marginalise an important part

of the world’s population (UNDP, 1999). The peculiar

globalisation we are experiencing is based on the

extension of the global market to all the possible

corners and sectors of the world. Thus, the process

of commercialisation and private appropriation is

reaching the sectors of public services and scientific

and technological knowledge.

All of the above is far easier to understand if we

remember that the implication of the multinational

companies in the decisions taken by the WTO/GATT

since the Uruguay Round has reached scandalous

heights. Different interest groups have pressured

governments, particularly the US government, to

influence their positions and the composition of

delegations as well as to intervene directly in the

orientation of GATT. It is of little surprise to discover

that the content of the agreements are much more

favourable to the interests of the multinationals than

to those of thousands of millions of people supposedly

defended by their governments. The most recent WTO

ministerial conferences (Seattle 1999 and Doha 2001)

have not been financed by multinational companies

in vain. Although high level civil servants are the only

formally legitimate representatives allowed to take

part in the negotiations, the permeability between

these civil servants and the multinationals is highly

suspicious, and can even come to resemble revolving

doors. The principal negotiator for the United States,

the then-Secretary of State for Trade, Mickey Kantor,

has since moved to Monsanto (Ferrara, 1998). And

Monsanto is one of the multinationals which managed

to introduce TRIPS in the WTO with the decisive

support of the US representative body, which included

96 people from the business field in a delegation of

111 (CEO, 1999).

The TRIPS case is evidence of the real empire

of the multinationals in the establishment of world

economic rules according to their wishes. TRIPS is

a direct result of pressure from the same companies

that benefit from it. First, a dozen large US multina-

tionals, half of them related to the pharmaceutical or

biotechnological industries, created the Intellectual

Property Commission (IPC) with the explicit aim of

including this matter in the GATT agenda. The

European employers grouping UNICE and the

Japanese grouping Keidanren joined IPC to put

pressure on their own governments. In 1988 this

coalition of business organisations from the Triad did

what had never been done before; it proposed a draft

version of what would later become TRIPS to the

then–Director of GATT (CEO, 1999). This document

contains all the essential elements of the later

agreement, including the widening of what could be

patented to the field of life forms (Shiva, 1998).

Until this standardisation imposed by TRIPS,

different countries had developed patent laws based

on technology they needed for their economic

development, with the consequent difference between

laws in different countries. In general, economies

with less technological development established a

«weak» system of patents, favouring the absorption

of technology by imitation, as the industrialised

countries had done before them. This was the case

of Japan in the post war expansion and also, later

on, of other South East Asian countries which also

grew to be competitors for US and European industry.

The technologically powerful economies tended to

have a system of «strong» patents designed to hinder

the springing up of competitors. With TRIPS there

has been a qualitative change: the potential future

competitors are being restricted by a tight control

which stops, or at least slows down, their possible

technological development (Correa, 2000).

Once TRIPS was in place, the need to be

competitive with the fast-lane US biotechnology

industry was used as the decisive argument to

introduce the European Union Directive on Legal

Protection of Biotechnology inventions. This

directive, very similar to that which was rejected for

ethical reasons after a long debate in 1995, widens

the field of patents to plants, animals and human

biological material. This radical change of position

in only three years can be explained in part by the

economistic argument of the need to adapt to

globalisation, mentioned above, but it is also due to

the efforts of EuropaBio, a pressure group created in

1996 by the main European biotechnological

companies and which works in Brussels to influence

250 XABIER BARRUTIA, ALFONSO DUBOIS AND PATXI ZABALO

the EU. Evidence of this group’s methods is the 30

million dollars which one of the sector’s biggest

multinationals, SmithKline Beecham, spent to

promote the passing of this initiative (CEO, 2001).

Due to the controversy around this issue, several

countries have declined to apply the directive for the

moment.

This controversy has also reached the United

Nations. In August 2000 a resolution of the UN Sub-

Commission for the Protection and Promotion of

Human Rights admitted that there is a conflict

between the private interests protected by TRIPS and

public or social interests incorporated in international

law on human rights. Basing its opinion on the UN

Conventions on Economic, Social and Cultural

Rights and on Biodiversity, the Sub-Commission

questions the negative consequences of the

application of TRIPS on people’s rights to health

and food. The Sub-Commission therefore commits

itself to supervising the matter and recalls the fact

that intellectual property rights are subject to public

interest limitations.11 In April 2001 the UN High

Commission for Human Rights took over the case,

this time with regard to access to medicines in the

context of epidemics such as HIV/AIDS. The

resolution adopted recognises that access to

medication is a basic element in the advances towards

people’s full rights to enjoy the best possible physical

and mental health. It also requires the member states

to make sure that the application of international

agreements is compatible with public health

(Raghawan, 2001 Reference missing in biblio-

graphy). In August 2001 the aforementioned Human

Rights Sub-Commission made a new call for

governments to protect the social function of intellec-

tual property. Moreover the resolution calls on the

High Commissioner for Human Rights to organise a

Seminar to study the relationship between human

rights and TRIPS12.

In the context of this debate, with ethical

principles and economic profits at stake, we will

analyse the relationship between two knowledge

intensive chemical industries -biotechnology and the

pharmaceutical sector- and the satisfaction of basic

human needs such as food and health. Technological

progress, in general, and that experienced in these

fields, in particular, has always motivated the hope

of a world free of privations. Nevertheless, global

reality at the beginning of the twenty-first century,

in the midst of full-scale globalisation, does not allow

us to be as optimistic. The means exist, but they are

not within everyone’s reach.

THE BIOTECHNOLOGY INDUSTRY AND

THE ERADICATION OF HUNGER

Biotechnology is not an industrial sector in the

strict sense of the word. We are talking about techno-

logy in the field of life sciences with applications in

the pharmaceutical industry and in agribusiness

amongst other sectors. There are large-scale

biotechnological companies such as Monsanto, but

also small, specialised firms, which tend to be the

most innovative, although the formation of clusters

and relationships between companies is increasingly

important. Since biotechnology is technology or

knowledge intensive, the main producers are in

industrialised countries (UNCTAD, 2001), although

using raw materials that mainly come from Southern

eco-systems. The United States maintains the leading

position in the biotechnology research field, given

that it offers the most effective setting, after benefiting

from considerable public funding. At the same time,

the European Union has expressed its concern over

its difficulties in this field (COM, 2001).

In a greatly expanding sector the leading bio-

pharmaceutical firm is Amgen. This company

carried out the biggest fusion in the sector, in

December 2001, when it bought its rival Immunex

for the sum of $16 billion (Fortune, Europe Edition,

March 11, 2002, No. 3). Although pharmaceutical

firms have traditionally taken over biotechnological

ones, today bio-pharmaceutical companies are

buying each other (The Economist, December 22

2001). Biotechnology is also applied to agriculture

or to agribusiness, term applied in the 1950s to show

the increasing interrelationship between agriculture

and industry. In fact, agriculture has links with

industry at both ends of its activity. Inputs imply

relationships with the agricultural machinery

industry, with the chemical sector (fertilisers,

pesticides, and seeds) and others. Outputs imply links

with agro-food industry. In this field we can find

multinationals such as Unilever or Nestle. Here we

will limit our analysis to the field of .. chemical

industry and, more specifically, to biotechnology.

Since the mid-1990s, after years of research,

biotechnology has revolutionised seed and pesticide

markets with the introduction of genetically modified

plants.

The most active companies in agricultural

biotechnology are Syngenta, Monsanto, AgriBiotech,

AgrEvo/Aventis, Limagrain, Empresa La Moderna

(ELM), Rhone-Poulenc Agro, DuPont, DeKalb

Genetics, etc. As an exception it is worth pointing

BASIC HUMAN NEEDS AND THE GLOBALISATION OF THE ECONOMY 251

out that ELM is Mexican. Although some of these

companies work in both the pharmaceutical sector

and in agricultural biotechnology, the latest tendency

is the selling off or separation of the agricultural

branch. Four leading pharmaceutical companies

(American Home Products, Novartis, AstraZeneca

and Aventis) have decided to shed their agricultural

divisions. In 2000 Novartis agribusiness and Zeneca

agrochemicals merged to form Syngenta. At the same

time, Pharmacia has crated a separate unit

(Monsanto) as part of its recent fusion.

In recent years we have observed a process of

mergers and acquisitions and of vertical integration

in the sector. The major biotechnology companies

are buying up the few seed companies that remain

in individual owners’ hands in order to control the

genetic material which agricultural production

depends on. For example, in 1997 Monsanto bought

up the Brazilian seed firm Sementes Agroceres, thus

acquiring 30% of the Brazilian market for grain seed.

In 1998 the same company bought DeKalb Genetics

and the seed division of Cargill’s. In this way,

Monsanto controls more than half of Argentina’s

corn seed. As a result of this business concentration,

ten biotechnology companies (among which we can

find DuPont, Monsanto and Novartis) receive 32%

of all income from the trade in seed (Rifkin, 2000).

Inventions based on seeds are currently

protected by patents, now that property rights have

been extended to life forms with TRIPS, although

this tendency was already evident in the US several

years before. In 1987 the US Patents and Trademark

Office permitted the patenting of living creatures

(genes, chromosomes, cells and tissues) and their

consideration as intellectual property (Rifkin, 2000).

For plants, specific legislation existed even earlier.

The 1930 US Plant Patent Act established intellectual

property rights over asexually reproduced plants. In

1968 an international treaty, the Union for the

Protection of New Varieties of Plants (UPOV), signed

above all by the industrialised countries, established

rights over new varieties of plants. In spite of this,

most countries allowed exceptions to these rights for

their farmers, provided that they were not involved

in trading these seeds. Nevertheless, the UPOV has

become more restrictive since 1991 and some

countries have eliminated the exemptions for their

farmers (Kothari, 1999).

Modern biotechnology designs genetically

modified organisms (GMOs) in laboratories, far from

the traditional wisdom which has given rise to an

immense variety of crops and breeds of livestock for

human consumption. Protected by patents, the

multinationals are now able to take advantage of this

common legacy of all humanity for their own benefit.

They patent genetically modified seeds whose main

virtue is that they are sterile or simple prohibit the

traditional practice of reusing seeds at the new

harvest. This could put at risk access to food for many

millions of poor peasants, while at the same time

mounting a frontal assault on the maintenance of

biodiversity. For the problem is not biotechnology

in itself but rather the biotechnology of the

multinationals, which moreover has the tendency to

transform itself into all biotechnology. Thus, the

genetic manipulation which is carried out is guided

by economic profitability rather than by human

needs, while at the same time ignoring the principle

of precaution (Riechmann, 1999).

Despite the justifications of the biotechnology

multinationals for their vast profits based on the

monopoly granted by patents, justifications centred

on the argument that genetic engineering will end

world hunger, world hunger continues to exist. This

is because hunger is not a problem of food

availability, at least in the short run13. It is estimated

that there is enough food to feed approximately 12%

more than the current population (WRI, 1998).

Hunger is basically a problem of poverty and the

solution involves wealth (re)distribution, which gives

access to foodstuffs. Chronic malnutrition is inti-

mately related to poverty and even in periods of

famine which cause many deaths, the main cause does

not tend to be a lack of foodstuffs (Sen, 1981). Compa-

ring the evolution of China and India since the 1940s,

some interesting differences can be observed. China

made major advances in reducing poverty and hunger

through the creation of rural employment and the

provision of health and nutrition services, in both rural

and urban areas. However this did not prevent the

great famine of 1958-61, which caught the authorities

unprepared. In India, there has been more progress

in the prevention of famine, due to the popular

pressure that obliged the government to take effective

measures for bad times, than in the reduction of

chronic malnutrition, which needs profound social

changes to combat poverty (Drèze and Sen, 1989).

For this reason, the strategies to obtain food

security, which were based on national food availa-

bility in their origins in the 1960s, have evolved

towards a focus on the family unit. In this way,

household food security insists on guaranteeing

access to food for the poorest and most vulnerable

sectors of the population. From this position the idea

of the human right to food has developed, with legal,

ethical and political dimensions which impose on

252 XABIER BARRUTIA, ALFONSO DUBOIS AND PATXI ZABALO

states and the international community the obligation

to respect, protect and promote household food

security (Pérez de Armiño, 2000). The fact is that

there is hunger in several countries which are major

food exporters: in the mid-1990s, more than three-

quarters of malnourished underfives in the world

lived in countries with a net surplus of foodstuffs

(Gardner y Halweil, 2000 reference missing). In

Brazil, which is the world’s fourth largest agricultural

producer14 and a major food exporter, 10% of the

population goes hungry (FAO, 2000, 2001).

The so-called Green Revolution of the 1950s

and 1960s also proclaimed the end of world-wide

malnutrition. Research institutes and seed companies

developed new types of seeds that provided greater

yield per hectare, although they needed chemical

fertilisers, pesticides and irrigation that substituted

traditional practice. While it is true that production

rose, the strategy has not been enough to reduce

hunger since it has not altered socio-economic

structures in favour of the poor. In fact, it has

facilitated the concentration of land and profits from

agriculture in fewer hands. The result has been more

food and more hungry people, even though this

appears paradoxical. In the Third World as a whole,

the availability of food per person increased by 11%

between 1970 and 1990 and the number of under-

nourished people fell by 16%, which is undoubtedly

a success, as the defender of the Green Revolution

points out. However, excluding China, the number of

undernourished people rose, despite the increase in

the availability of food per capita, both in Latin

America and in South Asia, the main bastions of the

green revolution (Lappé et al., 1998).

Once again, the difference between these cases

and the strategy followed by China, which involved

profound economic and social changes, transformed

a necessary factor, that of an increase in food

production, into a sufficient one. In an unchanging

social context, the application of Green Revolution

techniques harmed the poorest people in rural areas,

who lacked access to credit and irrigation and were

without political influence. They were thus unable

to take part in an industrialised agriculture that needs

ever more fertilisers and pesticides to maintain the

same results. This is why, when biotechnology

multinationals announce a second Green Revolution,

not only should we take into account the ecological

implications but also raise the question of whether

this would solve the distressing problem of hunger

(Lappé et al., 1998).

This is not to say that certain application of

biotechnology which can help to increase agricultural

yields on marginal land or make crops more resistant

to drought are not very welcome (UNDP, 2001).

However, a biotechnological investigation with

precise objectives which favour poor people in the

rural areas of the South does not stand much chance

of being funded by private companies, which by

definition are profit making entities. Public funding

is therefore necessary (FAO, 2000b). But Official

Development Aid has been falling for the last ten

years and it is not possible to remain very optimistic

in this sense.

PHARMACEUTICAL COMPANIES AND

AVAILABILITY OF MEDICINES

The case of the pharmaceutical industry clearly

shows the difference between justifying patents for

the common good and acting for one’s own benefit

with a total disregard for public interest. On the one

hand, it is not even true that patents are the unavoi-

dable price to pay for the research needed to develop

new drugs. This information is kept secret and the

little that is published is highly contradictory: there

are variations in the figures of between two million

dollars and 500 million (Hoen, 2000). Moreover, in

The ten largest pharmaceutical companies by sales in 1989 ($million) and 2000 ($ billion)

1989 2000

1. Johnson & Johnson (US) 9844 GlaxoSmithKline (UK) 23.5

2. Bristol-Myers Squibb (US) 9422 Pfizer (US) 22.6

3. SmithKline Beecham (UK) 8029 Merck (US) 18.6

4. Sandoz (Switzerland) 7766 AstraZeneca (UK) 15.7

5. American Home Products (US) 6747 Aventis (France) 15.2

6. Merck (US) 6698 Bristol-Myers Squibb (US) 14.4

7. Pfizer (US) 5904 Johnson & Johnson (US) 12.0

8. Takeda Chemical (Japan) 5454 Novartis (Switzerland) 10.9

9. Abbot Laboratories (US) 5454 Pharmacia (US) 10.8

10. Glaxo Holdings (UK) 4408 American Home Products (US) 10.8

Sources: Fortune for 1989 and Pharma for 2000. The figures for 2000 only include turnover for the pharmaceutical sector.

BASIC HUMAN NEEDS AND THE GLOBALISATION OF THE ECONOMY 253

many cases most of the research has been paid for

with public money: «The applied research that is

carried out in the pharmaceutical industry interacts

ever more strongly with the progress of academic

research carried out in hospitals, medical centres and

universities. There has always been a very strong

complementarity between the product-oriented

research done in industrial laboratories and the more

problem-oriented research carried on in academic

settings» (Duestsch, 1998: 102).

On the other hand, these companies’ research

is not directed towards poor people’s illnesses, given

that their limited spending power implies little

potential business. Thus, only 0,2% of world health-

related technological research and development is

dedicated to pneumonia, diarrhoea and tuberculosis,

three poverty-related diseases which make up 18%

of world illnesses (UNDP, 1999). In the same way,

of 1223 new chemicals entities developed between

1975 and 1997, only 13 are for treating tropical

illnesses and only four were the result of research by

the pharmaceutical industry. Another example

concerns the only effective medication against

sleeping sickness in its advanced state which is no

longer produced by the multinational that holds the

patent because the thirty thousand people who catch

the disease each year do not represent a commercial

interest (Hoen, 2000).

This should not surprise us if we observe some

basic facts about the pharmaceutical sector. Its

demand is concentrated in industrialised countries,

with Africa representing only 1.3% of its market and

South East Asia, including China, representing 5%

(Hoen, 2000). Its production is dominated by

Northern companies (UNCTAD, 2001). Within the

Triad, the main producer in 1997 was the European

Union with 45.3% of total production, followed by

the United States with 35.9% and Japan with 18.8%

(COM, 2000). Of the ten largest companies in the

world, six were from the United States and the rest

were European.

The US and European companies (but not the

Japanese ones) have passed through an intense

process of mergers and take-overs to create a wider

base for research and a higher share of the market.

In 1985, for example, Glaxo bought Wellcome. The

year 2000 was very intense. Glaxo Wellcome took

over SmithKline Beecham for $76 billion. Pfizer

completed its merger with Warner-Lambert. Phar-

macia & Upjohn completed their purchase of

Monsanto/Searle. Recently, Bristol-Myers Squibb

has taken over DuPont Pharmaceutical. In addition

to these operations, the companies increasingly

develop strategic alliances and agreements to

collaborate with each other. The level of concen-

tration does not appear to be too high and it is

estimated that GlaxoSmithKline commands 7.3% of

the market after its fusion. What is undeniable is their

market power which is clear if we observe the high

market share that a few companies command in

specific products: analgesics, antibiotics, etc.

The pharmaceutical sector is technology

intensive, but not as much as is commonly believed.

GlaxoSmithKline, for example, spent 16% of its

turnover in 2000 on research and development and

Pfizer spent 19%. Staff costs are relatively high; in

1999 they made up 22.8% of total operating costs in

the case of the European pharmaceutical companies.

According to the European Commission, this is a

result of the high number of research staff in these

companies and their high salaries (COM, 2000).

Nevertheless the technological intensity of the

pharmaceutical sector has been overestimated.

According to a study carried out by the Health

Reform Program at the Boston University School of

Public Health, marketing costs are much more

important than research costs. In the year 2000 US

pharmaceuticals employed 81% more people in

marketing than in R+D. We can therefore see that

the industry is in fact marketing intensive: the

consumer pays more for marketing than for research

(Sager and Scolar, 2001). It is precisely because of

this fact that the companies are able to increase their

monopoly power. The power of the pharmaceutical

companies is such that they try to manipulate clinical

trials of their products as part of their marketing

policy. This is the accusation of the 12 most

important medical journals in the world: The Lancet,

The New England Journal of Medicine, BMJ, The

Journal of the American Medical Association,

amongst others (El País, 11-09-2001).

The key elements for their business are the

patents. The major pharmaceuticals depend to a

considerable extent on a few patented products, which

make up a high percentage of their income. Patents

give pharmaceutical companies monopoly power that

enables them to set prices in a totally arbitrary way.

In fact the prices of medicines vary substantially

between neighbouring countries, always reaching a

highest possible level in each market. Thus, in 1995,

the same presentation of Amoxil from SmithKline

Beecham sold at $36 in the United States and $14 in

Canada; $16 in Italy and $60 in Germany; $29 in the

Philippines, $34 in Malaysia and $8 in Pakistan

(Hoen, 2000). Moreover, once it has been invented

the production cost for medicine is relatively small.

254 XABIER BARRUTIA, ALFONSO DUBOIS AND PATXI ZABALO

As a result, the pharmaceutical companies make

enormous profits. Their income rate is much higher

than the average of the five hundred biggest

companies in the world. As we saw in the figure, year

after year the pharmaceutical sector is in first place

in profits compared to turnover in the Fortune 500

list. These same companies support the application

of TRIPS patents to restrict the rights of Third World

countries to produce, commercialise and import low

cost generic essential medicines. This increases

prices and reduces yet further the limited access of

the poor to vital cures. For example, the Indian generic

producer, Cipla, is able to offer its AIDS combination

medicines for US$150-300 per year per patient,

compared with the US$10,000-15,000 being sold by

the multinational companies; which means the

difference between life and death for many poor

people in Southern countries. Moreover, in countries

where alternative or generic medicines are available,

the price of a branded product usually falls as a result

of the competition it faces from low-priced

alternatives. When the Brazilian government began

producing AIDS drugs generically, for example, the

prices of equivalent branded products dropped by 79

per cent. The same brand is sold at a higher price in

countries where there is no competition from generic

producers (Oh and Leaver, 2001).

Until now many Southern countries and some

Northern ones, putting public health before private

profit, have not maintained a protectionist patents

legislation with regard to medicines. For example,

they have protected drug production processes but

not the final products. In fact, before TRIPS became

effective, there were more than fifty countries that

did not allow patent rights over pharmaceutical

products (Oh, 2000). In this context, very efficient

generic drug manufacturing companies have grown

up in Southern countries such as India15, Thailand,

Egypt, South Africa, Brazil or Argentina, capable

of producing medicines at a much lower price than

the originals. This has allowed the reduction of their

dependence on imports and has even enabled them

to export medicines to other poor countries such as

those of sub-Saharan Africa. However it is worth

remembering that patents on pharmaceutical

products in some Northern countries such as Italy,

Japan or Switzerland only appeared in the last

quarter of the century (Gerster, 2000).

Moreover, the scant safety measures foreseen

in TRIPS are proving very difficult to put into

practice. These measures include parallel imports,

which implies the purchase of the drug in another

country where it is cheaper, and obligatory licences,

which involve the concession, in exceptional circum-

stances, of a production license to a third party without

having to obtain the consent of the patent owners.

However, thanks to the collaboration of the US

government with PhRMA (Pharmaceutical Research

and Manufacturers of America), one of the strongest

pressure groups in the world, South Africa and Brazil

have been accused of not respecting pharmaceutical

multinationals’ patents and have faced the threat of

trade sanctions. Other countries such as Argentina,

the Dominican Republic, Egypt, Thailand or India

have also been pressured not to use their right to grant

obligatory licences and parallel imports, under the

threat of being accused before the WTO (Oh, 2000).

The South African case, however, had serious

repercussions in public opinion thanks to the

campaigns of Oxfam International y Médecins sans

Frontières (MSF)16 and has become an important step

forward. In this country four million people, ten per

cent of the population, are affected by HIV/AIDS.

Notwithstanding this fact, the effort of the

government to supply generic medicines due to the

existence of a national health emergency, contem-

plated in TRIPS, were faced with legal action by the

US government before the WTO’s Dispute Settlement

Body. Although domestic and international pressure

obliged the Clinton administration to back down, a

coalition of 39 companies took over the accusation

and challenged the law in South African courts on

the grounds that it was a violation of TRIPS (Oh,

2000). Months later the pharmaceutical companies

withdrew their case due to the bad publicity which

their actions received in their real markets in the

Northern countries. The affair was transferred to the

IV WTO Ministerial Conference in Doha, in

November 2001, where TRIPS was to be revised.

The Declaration on TRIPS and Public Health

agreed in Doha is an important step forward in the

campaign for affordable medicines. It affirmed the

primacy of public health over intellectual property

rights, and the rights of governments to make full

use of the public health safeguards in TRIPS. The

Declaration also gives least-developed countries

more time before they are required to implement

pharmaceutical patenting. However, there is some

important unfinished business in the Doha

Declaration. Ministers recognised a fundamental

imbalance within the TRIPS Agreement and

committed themselves to finding an effective solution

before the end of 2002. This concerns the way the

TRIPS Agreement, by restricting countries like India

from exporting inexpensive generic versions of new

BASIC HUMAN NEEDS AND THE GLOBALISATION OF THE ECONOMY 255

medicines, will prevent most developing countries

from finding affordable sources of new improved

medicines to treat diseases such as HIV/AIDS,

malaria, and tuberculosis.

Many developing countries cannot afford

expensive patented medicines yet neither can they

produce cheaper generic versions. Currently they can

import these generic copies from a handful of other

developing countries which do have the capacity to

produce them, but which have not yet fully complied

with TRIPS. The key problem is that these cheaper

supplies of medicines will begin to dry up once India

and other developing-country generic producers

comply with TRIPS, which they have to do by January

1st 2005, at the latest. This is because TRIPS prohibits

producer countries from exporting cheap copies of

patented medicines, whatever the health needs in other

countries, and even when there is no patent in force

in the importing country. This represents a

fundamental imbalance in TRIPS17. Some developing

countries and NGOs argue that the simple solution to

this problem is to lift TRIPS restrictions on exports

of public health related products.

But the governments of the United States and

other industrialised countries, pressured by their

pharmaceutical industries, oppose this. It therefore

appears difficult to believe that this path will be able

to establish the primacy of the right of access to basic

medicines over rights connected with intellectual

property. Nevertheless, effective follow up to the

Doha Declaration is a crucial next step in making

patent rules compatible with public health and

development needs. Half-baked solutions will

indicate that rich-country governments are not

serious about allowing developing countries the right

to buy the cheapest medicines, and will merely

strengthen the calls for a fundamental redesign of

TRIPS (Mayne et al., 2002).

RECONSIDERING TRIPS: A STEP

FORWARD TO CHANGE THE DIRECTION

OF GLOBALISATION

For all the above, many Third World countries

call for TRIPS to be modified and even for it to be

removed from the WTO framework, seeing it as an

obstacle for their development and a danger for the

environment, even a attack on the right to life. They

remind the developed countries that they were able

to incorporate existing technologies without having

to face protectionism such as that imposed by TRIPS.

The World Bank (2001), which predicts future

opportunities for developing countries under TRIPS,

recognises, however, that these rules clearly favour

industrialised economies and imply a considerable

cost for Southern ones. This is due to the increase in

1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Pharmaceutical companies Average of the 500 largest

Source:Fortune

Net profits in the world’s 500 largest companies and in the pharmaceutical companies (in per cent)

256 XABIER BARRUTIA, ALFONSO DUBOIS AND PATXI ZABALO

payments for the use of technology and the price

rise of products such as computer programmes or

medicines. The biopharmaceutical companies are

working hard to obtain new drugs in a field with

great potential, especially after the publishing of the

human genome map. But these new medicines will

be even more expensive than the existing ones and

therefore further from the reach of a third of

humanity –including half of the population of the

poorest parts of Asia and Africa- who do not have

access to essential medicines (Hoen, 2000).

They also recall that intellectual property rights,

as defined and protected by TRIPS, legalise biopiracy

and contribute to the destruction of traditional forms

of agricultural production and reduce access to food.

They therefore propose the renegotiation of the

agreement and, in the meantime, the extension of

the period of grace until its full application. For the

revision of TRIPS, the African Group has proposed

making it clear that «it is not permissible to patent

plants and animals or any other type of living

organism». Instead, it should allow the protection

of the innovations of indigenous communities and

the peasantry in the Third World (Khor, 2000). For

if we really want to fight hunger, food sovereignty is

fundamental. According to Via Campesina (2000),

it is the right of every nation to maintain and develop

its own capacity to produce the basic foodstuff for

its people, respecting productive and cultural

diversity. Food sovereignty implies the right to

produce food autonomously in a country’s own

territory and is a precondition for genuine food

security, while patenting life forms leaves the control

of genetic resources in private hands and is totally

unacceptable. Thus, Vía Campesina is committed to

changing the unsustainable and unfair models of

production and trade.

Patents are a type of property and as such are

not ethically neutral. A political regulation of

biotechnology developments is necessary, moving

from a logic based on the protection of inventions as

private property to one based on the social uses and

consequences of these inventions. To achieve this a

debate is needed in which the whole of the society

participates to decide which limits should be placed

on the privatisation and commercialisation of

biotechnology. These decisions are too important to

be left in the hands of the patents system (Sánchez

Padrón and Gómez Uranga, 2001).

On the whole, it is becoming clear that the

existing economic globalisation based on the tyranny

of the market, where the main priority is the

profitability of private companies, not only does not

improve the situation of many human beings, but in

fact make it worse. The acknowledgement that every

person has the right of access to the goods and

services needed to satisfy his or her basic necessities

demands that the public sector performs its role to

compensate growing inequalities. Contributing to

income redistribution, both at national and at

international level, it is the quickest way to eradicate

poverty and, in consequence, eliminate hunger. On

the road to human development, in the face of

neoliberal globalisation, the solution lies in globalise

solidarity: it is economically possible and ethically

necessary.

KEYWORDS Economic Development. Basic Needs. Patents.

Multinational Companies. Third World

ABSTRACT Development has to do with the well-being of all

people. Therefore, human rights are a necessary tool to achieve

this global objective. The international community doesn’t accept

these ideas and the Millennium Declaration has clear limits. The

process of globalisation is economically exclusive and involves

the neo-liberal construction of rules, such as those of the World

Trade Organisation, which respond to the interests of the

multinationals companies. As a consequence, inequalities in

income distribution have increased and poverty and hunger remain

persistent problems, while basic medical care is beyond the reach

of most of humanity. This is due to market logic, which revolves

around business profits rather than the satisfaction of human needs.

For this reason technological advances, particularly those in the

field of biotechnology, are not a solution in themselves, but rather

require a reconsideration of the role of the public sector in order

to change their orientation.

NOTES

1 For a panorama of the evolution of economic development

thinking and the current debates from an orthodox

perspective, although relatively critical of the multilateral

financial institutions, see Meier and Stiglitz (2001).

2 The importance of participation in development is highlighted

by all development agents. However it is worth differentiating

between the proposals which regard participation as a mere

instrument to obtain greater efficiency from those which pose

participation as the very aim of development. For the latter,

which form part of an alternative development approach,

participatory development is a distinct approach,

complementary to the traditional ways of conceiving and

carrying out development aid. In this sense it implies a

reconsideration of the traditional role of mediation. The

traditional view of the relationships between donor

organisations and beneficiaries and of their respective

functions undergoes an important change that obliges us to

review the form and content of the formulas for association.

3 The United Nations Development Programme (UNDP) has

published an annual Human Development Report since 1990,

which serves as a good reference point for this normative vision,

especially in the first half of the 1990’s.

4 The theoretical contributions of Sen (1992, 1999, 2000) have

had particular influence on this redefinition of well-being. We

owe the analytic concepts of functioning capabilities and

BASIC HUMAN NEEDS AND THE GLOBALISATION OF THE ECONOMY 257

entitlements to this author.

5 The DAC is a body that forms part of the OECD and brings

together the donor countries from the economic North. Its

role is to establish the requirements to be taken into account

in official development aid and the determination of its basic

directives.

6 For more details, visit the web site «A better world for all»:

http://www.paris21.org/betterworld/

7 The Northern or «developed» countries are the United States,

Canada, Western Europe, Japan, Australia and New Zealand.

They contain 14% of the world population but own 77% of

world GDP. In the South, Third World or «developing»

countries, we can find all the Latin American, African and Asian

countries (with the exception of Japan and the republics of the

ex - Soviet Union). These countries have 79% of the world’s

population but only 20% of world GDP. The Eastern countries

or countries «in transition» are the states which have arisen

from the ex – Soviet Union and those of East and Central

Europe. They contain 7% of the global population and receive

2,5% of world GDP (United Nations, 2000).

8 We refer to China, the Asian dragons and tigers (Korea,

Taiwan, Hong Kong, Singapore, Malaysia, Thailand and

Indonesia), Mexico and Brazil, which together represent more

than 90% of manufacturing exports from the Third World.

These countries participated in 6% of world exports in 1973

and 19% in 2000. In the same period, the remaining Southern

economies have fallen from 14% of world exports to 11%

and the Eastern countries have halved their previous share

of 9% (WTO, 2001).

9 In addition to the episodes which have affected Northern

economies (such as the New York stock exchange crash in 1987

or the recent fall in the value of «new economy» shares, the

collapse of the property market and the Japanese stick exchange

in the early 1990s or the crisis in the European Monetary System

in 1992) and the famous debt crisis in the Third World which

began in 1982, several crises have occurred in the emerging

markets since the mid-1990s. Following the Mexican

«tequilazo» (1994), we have witnessed financial crises in Asia

(1997), in Russia (1998) and in Brazil (1999). After a short

respite, the year 2001 has brought us financial crises in

Turkey (February) and in Argentina (December).

10 For information on the World Social Forum, whose first two

meetings have been held in Porto Alegre in 2001 and 2002, see

the web site: http://www.forumsocialmundial.org.br/

11 We refer to the Resolution of August 17, 2000 on “Intellectual

Property Rights and Human Rights” (E/CN.4/Sub.2/2000/

L.20). This resolution is based on a preliminary report on

“Globalization and is Impact on Full Enjoyment of Human

Rights” compiled by two jurists, members of the sub-

commission, J. Oloka-Onyango and D. Udagama (E/CN.4/

Sub.2/2001/10).

12 Resolution of 16 August 2001 (E/CN.4/Sub.2/RES/2001/21).

13 Even a neo-Malthusian like Lester R. Brown (2001), who

loses no opportunity to identify the demographic growth of

the poor as the main cause of their problems, acknowledges

that it is possible to increase the productivity of farm land

enough to feed the entire world population, both now and in

the coming decades. This can be achieved with the need to

generalise the use of GMOs, except in the case of more

drought-resistant varieties, given the question marks that

remain over their effects on the environment and on health.

14 Brazil represents 4.2% of world agricultural production, while

its population makes up 2.7% of the world total.

15 The key to Indian pharmaceutical industry success lies in its

1970 Patents Law, which only allows the patenting of processes

for a maximum of seven years, while, at the same time,

permitting obligatory licenses. Thus, companies such as Cipla

have allowed India to enjoy a high degree of self sufficiency

in medicines, available at much lower prices than those of

the major Northern multinationals. In South Africa, Cipla

created a mixed company with a local firm to supply

antiretrovirals there. This provoked the anger of the US

pharmaceutical industry, which pressure its government to

take the case to the WTO.

16 The basic principle of these campaigns is that access to

essential and vitally needed medicines is a fundamental

human right. Poor people have the right to a good health,

and therefore to medicines for the treatment of poverty-related

diseases. Protecting people’s health and saving their lives

must take precedence over the strict protection of intellectual

property and the very high profits which drug companies

derive from this. For more information see the following web

sites: Oxfam: http://www.oxfam.org.uk/cutthecost/

index.html and MSF: http://www.accessmed-msf.org/

index.asp

17 TRIPS allows countries to override a patent, for example if

prices are too high, or supplies limited, if certain procedures

are followed. Countries with their own production capacity,

mainly the rich and industrialised, can take advantage of this to

produce their own cheap generic versions of medicines.

However, the majority of poor countries are not able to because

they lack manufacturing capacity. Nor will they be able to

override a patent to import medicines, because TRIPS stops

generic-producing countries from exporting to them.

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Authors’ Address:Xabier Barrutiax Alfonso Dubois and Patxi Zabalo, Facultad de Ciencias Económicas

y Empresariales Universidad del País Vasco - Euskal Herriko Unibertsitatea Lehendakari

Agirre, 83 48015 Bilbao, SPAIN

E-mail: xabierbarrutia:eupbaetx@bs.ehu.es

Alfonso Dubois: eupdumia@bs.ehu.es

Patxi Zabalo: eupzaarp@bs.ehu.es

Human Ecology Special Issue No. 12: 241-258 (2004) Charles Susanne, Guest Editor

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