Celebrating the Love of Friends in a Loving World

Celebrating the Love of Friends in a Loving World
Red Roses for You, My Sweet Friends ... Total Love.

My Sweet Friends

My sweet friends,

We grow closer to each other;

When we interact together and share ideas;

The common faith that we share,

Binds our hearts in one accord.

For sweet friendships last a life time,

When built on mutual respect, humility and understanding;

Throughout each different season,

We find we are one in life.

Sweet friends are there through times of grief;

And times when hope is gone;

Always there with encouragement;

So we can carry on.

I thank the Lord for you,

My true and faithful friends;

To fondly speak with you, whether we agree or not,

On this, our beloved blog;

For sweet friends will stay, no matter what;

Giving support.

Together, our hearts and minds truly unite;

With the amazing love of sweet friends.

In the spirit of true friendship,

Best wishes, my sweet friends;

May the Lord bless you abundantly.

I remain, yours truly,

B.B. Bakampa.

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Sunday, February 19, 2012

Economic Sovereignty and its Challenges in Developing States

By Bakampa Brian Baryaguma
[Dip. Law (First Class)–LDC; Cert. PELD–NALI-K; LLB Student–Mak.]
bsaint3@gmail.com; www.bbbakampa.blogspot.com

September 2011

For at least 50 years, the developing states phenomenon has existed and generated raging debate. Today, it centres on their financial survival; the question being whether they are economically independent enough to spur human development. This essay considers the international economic law approach to this question. It looks at existing legal and quasi-legal instruments endeavouring to guarantee states’ economic sovereignty, contending that whereas substantial resources have been devoted to the process, this has been without proper analysis of the underlying causes, which explains the phenomenon’s continued existence. The essay identifies four main causes namely, globalization gone bad, mischievous policies of international financial institutions (IFIs), imperialistic foreign states’ interference and system failures in developing countries. They are political, thus necessitating a revolutionary political solution. Finally, it proposes that developing states should adopt domesticated development policies, coupled with restrictive and moderated foreign interaction.

1. Introduction

Economic sovereignty is a defining feature of national authority and independence. A country’s economic independence is the only viable guarantee that other countries and other inter-state actors will respect its international law rights, since ‘As a construct of international law, a nation is nothing more nor less than a bundle of entitlements, ... which ... define and secure its boundaries on a map, while others define its jurisdictional competency ...’. [1]

The quest for economic independence is articulated through the doctrine of economic sovereignty (hereinafter ‘the doctrine’), that is enunciated through various international legal instruments and it is entrenched by the concept of permanent sovereignty over natural resources (hereinafter ‘the concept’).

The Charter of Economic Rights and Duties of States(CERDS) lists the fundamental principles regulating international economic, political and other relations among states, chief among which is state sovereignty and equality of all states, internationally co-operating for development. [2]

This resolution attempts to establish norms of international economic relations among international economic law subjects, operating in an anarchical international system, which assumes that states have to rely on their own capabilities to defend themselves from aggressive acts of other states i.e. that none can command and none must obey – balance of power. [3]

Section one introduces the doctrine of economic sovereignty generally and defines the key terms used. Section two puts the discussion into perspective by drawing the nexus between economic sovereignty and developing countries. Section three examines the legal basis of the doctrine while section four addresses its challenges, with reference to developing countries. Section five makes concluding remarks. Finally, section six suggests the way forward for developing countries.

1.1. Definition of key terms

In this essay, unless the context otherwise requires, the following words and phrases carry the meanings attributed to them.

1.1.1. Developing countries

This term will be used interchangeably with such connotations as Third World and poor countries. The term Third Worldis understood to refer to, ‘... the economically underdeveloped countries of Asia, Africa, Oceania, and Latin America, considered as an entity with common characteristics, such as poverty, high birth rates, and economic dependence on the advanced countries.’ [4] I respectfully agree with and adopt this definition to mean and refer to developing countriesas employed here.

The categorization of states into for instance, developing and developed, is often correlated with levels of political or military power, based mainly on a measure of economic development, as an important determinant of several fields like trade. [5]

1.1.2. International economic law

International economic law, just like its precursor –international law – is not yet empirically defined. [6] The debate is rife as to its extent and meaning.

Joel Trachtman posits that, ‘International economic law does not have a standard definition.’ [7] He states descriptively that it is a ‘... a type of "public" international law that has economic goals.’ [8]

For Professor Subedi, international economic law is the law that regulates the international economic order or economic relations among nations. [9]

Suffice to say, that international economic law, is a subsidiary of international law that regulates the activities of international entities like states and economic organizations, engaged in international transactions. In this respect, it is the legal foundation of the international economy.

1.1.3. Economy

This term emanates from the word economics which literally is the science of the production, distribution and consumption of goods or the condition of a country as to material prosperity. [10]

In its normative form, economics evaluates the design of institutions for the organization of economic activity, for purposes of allocating social capital through markets. [11]

Consequently, the term economy denotes a society’s system of controlling and managing its money, goods and other resources. [12]

1.1.4. Sovereignty

Sovereignty is the supreme and independent power or authority in government, as possessed or claimed by a state or community in a defined territory, based on the conception that there must be, within every political community of state, a determinate sovereign authority whose powers are decisive and recognized as the rightful or legitimate basis of authority. [13]

Sovereignty is closely linked to territory because a state is only sovereign within the bounds of its territory. By territory is meant a state’s geographical cover and extent. [14]

Needless to say, sovereignty has contributed to world peace and stability as well as the development of international law generally. As illustrated by Richard Haass, 'Sovereignty has been a source of stability for more than two centuries. It has fostered world order by establishing legal protections against external intervention and by offering a diplomatic foundation for the negotiation of international treaties, the formation of international organizations, and the development of international law. It has also provided a stable framework within which representative government and market economies could emerge in many nations. At the beginning of the twenty-first century, sovereignty remains an essential foundation for peace, democracy, and prosperity.' [15]

1.1.5. Economic Sovereignty

This is an international economic law doctrine, which means a country’s power to take effective charge of its wealth and natural resources, within its territory to the exclusion of all others.

It is the assertion of control over the economic activities of all persons – juridical and natural – conducting business within the jurisdiction of a given country, irrespective of whether they are nationals or foreigners. [16]

2. Background

Economic and political sovereignty are two different sides of the same coin, both of which are rooted in the functioning of states as independent and sovereign entities. [17] Although developing countries attained political sovereignty first, it was soon realized that political independence was separate and distinct from economic independence. [18]

Hence, claims were made concerning the control of resources situated in their territories and demands voiced for special measures to remedy decades of economic stagnation under colonial rule, plus an international system bent towards favouring colonial interests. [19]

Former colonies also embarked on policies of economic development, through harnessing their natural resources, in accordance with their economic policies and by requiring all persons (especially foreigners who had the rights, concessions and privileges to exploit all resources) to comply with newly imposed state policies. [20]

But this faced stiff resistance from former colonial masters attempting to shield their citizens from subjection to these unfriendly policies, arguing that international law made it obligatory for new states to honour existing agreements. This inevitably caused tension, escalated by pressure on the new states to deliver essential goods and services to their people.

Diffusing this tension necessitated legal guarantees, focussing on harmonizing international economic development, based upon the recognition that real independence requires more than political independence and that special measures should be taken to assist developing countries in realizing economic independence. [21]

3. The Doctrine in Various International Legal Instruments

Different international legal instruments were entered into, to allow developing countries to overcome the difficult situation they had inherited from their past. This was based on principles of equity among states, including redistributive concepts like permanent sovereignty over natural resources, to special measures concerned with economic development. [22]

For want of space and time, I shall, in this section, consider a few instruments.

3.1. United Nations General Assembly Resolution on the Permanent Sovereignty over Natural Resources (PSNR) [23]

Article 1 of this resolution recognizes the right of states to permanent sovereignty over their natural wealth and resources, to be exercised in the interest of national well-being and development. [24] The resolution considers this right as a basic constituent of the right to self-determination and the economic independence of states, [25] constituting complete and permanentauthority over all natural resources.

Paragraph 2 further entrenches the concept of sovereignty by subjecting the ‘… exploitation, development and disposition of such resources …’ and foreign capital to national regulations.

Paragraph 4 recognizes the states’ rights to nationalize, expropriate or requisition natural resources, as long as this is done;

(i) in public interest,

(ii) in accordance with national and international law; and

(iii) payment of appropriate compensation.

Paragraph 8 assures foreign investors that any existing agreements will be adhered to, on condition that they strictly and conscientiously respect state sovereignty.

3.2. Charter of Economic Rights and Duties of States (CERDS) [26]

Chapter two of this charter concerns the economic rights and duties of states in the development process. In particular, Articles 1, 2, 4 and 5 are more explicit on this matter. Article 1 guarantees the economic, political, social and cultural sovereignty of states ‘...without outside interference, coercion or threat in any form whatsoever.’

Article 2 is widely framed, bringing in the principle of permanent sovereignty over natural resources and economic activities. Clause (1) protects states’ free exercise of full permanent sovereignty, including possession, use and disposal, over their natural resources and economic activities. Clause (2) permits states;

(a) to regulate and exercise authority over foreign investment within their national jurisdiction. Any compulsion to grant preferential treatment to foreign investment is prohibited;

(b) to regulate and supervise the activities of transnational corporations within their national jurisdiction and to this effect, transnational corporations are prohibited from intervening in the internal affairs of host states.

(c) to nationalize, expropriate or transfer ownership of foreign property, upon payment of appropriate compensation, taking into account their relevant laws and regulations.

Article 4 extends sovereignty to the realm of international trade. It obliges states to respect one another’s differences in political, economic and social systems. To this end, states are free to choose the forms of organization of their foreign economic relations and to enter into bilateral and multilateral arrangements consistent with their international obligations and with the needs of international economic co-operation.

Article five provides the right to associate in primary commodity production organizations, geared towards developing states’ national economies and prohibits the application of economic and political measures designed to limit it.

The CERDS represents a typical give and takesituation – a true embodiment of the correlation of rights and duties – with the potential to foster states’ economic sovereignty to great lengths.

3.3. Declaration on the Right to Development [27]

Article 1 of this declaration spells out the ingredients, scope and extent of the human right to development. Clause (1) provides that this right is inalienable, by virtue of which everybody is entitled to participate in, contribute to, and enjoy economic, social, cultural and political development, enabling the full realization of all human rights and fundamental freedoms. Under clause (2), this human right also implies the full realization of the right to self-determination, including the exercise of the inalienable right to full sovereignty over all natural resources.

Article 2 is very important because;

(i) it provides for the human being as the central subject of development under clause (1);

(ii) under clause (2), it places both individual and collective responsibility for development on the human being; and

(iii) clause (3) enjoins states to formulate development policies to enable human well-being.

The right to development, though difficult to define in concrete terms and without much legal significance, [28] is argued to have contributed to the international community’s adoption of the Millennium Development Goals in 2000. [29]

The interplay of international environmental law and international economic law

International environmental law has over the years embraced economic concepts in a bid to draw a combined effect between environmental and economic law principles. Therefore, international economic law inevitably encompasses some aspects of international environmental law.

However, international environmental law sought to limit the rights of states to exploit their natural resources, in sharp contrast with international economic law that sought to entrench them. [30]

3.4. Declaration of the United Nations Conference on the Human Environment

Popularly known as The 1972 Stockholm Declaration, this conference met at Stockholm from 5 to 16 June 1972, to consider the need for a common outlook and common principles to inspire and guide the peoples of the world in the preservation and enhancement of the human environment.

Principle 21 thereof guarantees the states’ sovereign right to exploit their own resources pursuant to their own environmental policies, in accordance with the Charter of the United Nations and the principles of international law, while bearing the responsibility to ensure that activities within their jurisdiction or control do not cause damage to the environment of other states or of areas beyond their limits of national jurisdiction.

Principles 2, 3 and 5 of the declaration concern the conservation of natural resources, for the benefit of present and future generations; maintenance, restoration and improvement of the earth’s capacity to produce renewable resources and the prevention of the exhaustion of non-renewable resources, respectively.

The CERDS though, provides the best link between international environmental law and international economic law. [31] Article 30 thereof imposes the obligations of protecting, preserving and enhancing the environment for the present and future generations on all states. It further provides that states may draw ad hoc policies but they should enhance and not adversely affect the present and future development potential of developing countries.

Apparently, the Charter recognizes that although development should be considerate and mindful of the environment, environmental policies should equally promote development programmes.

3.5. World Charter for Nature [32]

This instrument emphasized the need for sustainable use of natural resources. In the preamble thereof, it is provided among others, that man’s actions or their consequences can alter nature and exhaust natural resources; therefore he must fully recognize the urgency of maintaining its stability and quality as well as of conserving natural resources.

Further still, that the degradation of natural systems owing to excessive consumption and misuse of natural resources, coupled with failure to establish an appropriate economic order, leads to the breakdown of the economic, social and political framework of civilization.

Needless to say, the above three preceding instruments marked the formal introduction of the principle of sustainable development in the realm of international economic law, which was subsequently popularized by the Report of the World Commission on Environment and Development. [33]

This report understood sustainable development to comprise both states’ right to economic development and their duty to avoid environmental degradation resulting from development activities i.e. the need to balance between resource utilization and preservation. [34]

It believed that sustainable development ‘... implies meeting the needs of the present without compromising the ability of future generations to meet their own needs ...’ and recognized ‘... the common interest of all countries to pursue policies aimed at sustainable and environmentally sound development ....’ [35]

This principle reconciled the conflict between the right of states to exploit their natural resources as stipulated by international economic law and the need to conserve them as stipulated by international environmental law. [36]

3.6. United Nations Convention on the Law of the Sea, 1982

Article 193, addresses the need to exploit natural resources while paying close attention to environmental preservation. States have the sovereign right to exploit their natural resources although in accordance with their duty to protect and preserve the marine environment.

3.7. The Rio Declaration on Environment and Development, 1992

This declaration resulted from the United Nations Conference on Environment and Development, held in Rio de Janeiro from 3 to 14 June 1992. The conference analyzed the intrinsic importance attached to the elements in both the environment and development, unlike the 1972 Stockholm Conference which only concerned the human environment. [37]

Principle 1 proclaimed that, being at the centre of concerns for sustainable development, human beings are entitled to a healthy and productive life in harmony with nature.

Under principle 2, states have the sovereign right to exploit their resources pursuant to their own environmental and developmental policies.
Principle 12 fuses international environmental issues like sustainable development, with international economic issues. States are obliged to co-operate in order to promote a supportive and open international economic system that would lead to economic growth and sustainable development in all countries, to better address the problems of environmental degradation.

3.8. Convention on Biological Diversity, 1992

The Rio conference resulted into this Convention too, which reaffirms ‘... that States have sovereign rights over their own biological resources’ [38] and ‘...also that States are responsible for conserving their biological diversity and for using their biological resources in a sustainable manner.’ [39]

In sum, the doctrine of economic sovereignty has been fairly exhaustively debated at the international law and policy level. The special emphasis on developing countries is notable. Under normal circumstances, the doctrine should be doing well. But in practice – where the rubber hits the road – the story is quite different, as there are several challenges impeding its effectiveness.

4. Challenges Facing the Doctrine

The challenges facing the effective application of the doctrine in developing countries are multidimensional, cutting across different social disciplines (like economics, international relations political science) and are in many respects closely related.

There are four major challenges namely, the influence of globalization, the role of international financial institutions (IFIs), foreign countries’ interference, and systematic failures of developing countries. The first three are closely related but quite distinct.

These challenges may not be purely legal, but considering that law does not operate in a vacuum and that laws are only formal ways in which societies express approval of how they wish to be governed, their study is nevertheless relevant.

As Passerin D’Entreves philosophically stated, ‘The law ... is conceived as an aspect of collective life, as custom; the legislative act is not a manifestation of a normative will, but a simple written record of what is already lived as Law in the use and customs of its men.’ [40]

4.1. Globalization

Globalization is ‘... fundamentally the closer integration of the countries and peoples of the world ...’. [41] It is a belief system attempting to view social phenomena from a common worldwide perspective, necessitated by enhanced interdependence of states on issues of global reach. [42]

For all its good and benefits, globalization has not brought its promised economic benefits to many people in developing countries. [43]

Joseph Stiglitz identifies some of these benefits as, opening up many countries to international trade, which has helped them to ‘... grow far more quickly than they would otherwise have done’ through export led growth; increased life expectancy and standard of living; and the reduction of the sense of isolation in the developing world through easier access to knowledge. [44]

He therefore, asserts that, ‘Those who vilify globalization too often overlook its benefits.’ [45]

However, Stiglitz notes that globalization has had many failures such as escalating poverty levels in developing countries, due to ‘A growing divide between the haves and the have-nots ...’ emanating from a failed market economy that failed to bring unprecedented prosperity as alleged by the West – consequently increasing instability. [46]

The advantages and disadvantages of globalization to developing countries are unbalanced, in that the latter far outweigh the former. In short, globalization has actually turned out to be exploitative and has made poor countries poorer! [47]

The net result is that the price paid for globalization has been higher than its benefits, since ‘... the environment has been destroyed, as political processes have been corrupted, and as the rapid pace of change has not allowed countries time for cultural adaptation ... followed by longer-term problems of social dissolution ...’ all of which have inevitably ‘... undermined national sovereignty.’ [48]

I strongly submit that in the face of these occurrences (especially the undermining of national sovereignty), naturally follows the undermining of economic sovereignty. Firm socio-political structures are a prerequisite for a healthy and vibrant economic system, without which states cannot claim economic sovereignty.

4.2. The Role of International Institutions

Globalization has been accompanied by the creation of new institutions which are its powerful drivers, moving ‘... not only capital and goods across borders but also technology.’ [49] These global institutions have occasioned the phenomenon of global governance, [50] though without global government, because they are not effectively accountable to common people who finance them. [51]

Some of the institutions include the international financial institutions (IFIs) like the World Bank (WB), the International Monetary Fund (IMF) and the World Trade Organization (WTO). There are intergovernmental institutions too like the United Nations (UN), the International Labour Organization (ILO) and the World Health Organization (WHO).

However, the IFIs play a more prominent role in the international system because they are central to the major economic issues affecting states. For instance, the IMF and the World Bank are the most powerful institutions in global trade and finance. [52]

In the 1980s, they embraced the free market gospel, packaged in the name of Structural Adjustment Programmes (SAPs), which prescribed rapid trade liberalization for developing countries. This forced them to open up their markets for unfair trade competition from developed countries, with disastrous social and economic consequences. [53]

SAPs have torn at the heart of economies and the social fabric, resultantly expanding poverty, inequality, insecurity and delegitimizing democratic political systems globally. [54] This has culminated into social and political chaos in many countries. [55]

My country Uganda, which has fully embraced SAPs, has seen widespread economic turmoil this year alone. Inflation has rapidly risen and is now standing at 21.4%; in June, Kampala City traders closed their shops for three days in protest against exorbitant importation costs; primary and secondary school teachers laid down their tools demanding higher pay due to a high cost of living; in September, Makerere University (Uganda’s premier higher education institution) academic and non-academic staff went on strike demanding better remuneration, leading to closure of the university and violation of students’ right to education.

Food prices are unacceptably high so that many people cannot afford decent meals any more – my family cannot afford to buy bread for breakfast anymore.

Thanks to IMF and World Bank cost sharing policies, basic services like medical care and water are now total luxuries – my taps back home are closed because the cost of water is unaffordable.

Uganda’s economy is choking from the Bank’s and IMF’s policies, which have no consideration for basic human rights. [56] The government says that it cannot do much to salvage the situation since it is running a liberalized system! Therefore, talking of economic sovereignty, for a poor and vulnerable developing country like mine, is total day-dreaming.

As if this is not bad enough, the Bank has warned that economic growth rate in the SAPs-enforcing East African region will lower due to the rising commodity prices on the world market. [57]

World Bank and IMF liberalization policies have crippled systems in developing countries, so much so that, in spite of international economic law’s promises of permanent economic sovereignty, they would not be able to defend it.

I am cognizant of the eloquent submissions of Kal Raustiala on a related topic and which I wish to respond to, albeit briefly. [58]

Kal believes that international institutions enhance state sovereignty, arguing that, ‘... changes in the international system or in domestic politics have already compromised sovereignty in an irrevocable manner, and thus international institutions, while rendering the erosion of sovereignty more legible, actually serve as a means to reassert sovereignty. [59]

Kal bases this view on the proposition that, ‘International institutions derive their powers from the explicit consent of the contracting states. This consent is not necessarily permanent. States may allocate power to international institutions in ways that are revocable or irrevocable.’ [60]

The author recognizes that, ‘To be sure, it may be costly for a state to revoke its delegation of power through exit or renegotiation.’ [61]

I should say here that as the foregoing discussion reveals, developing countries are in so delicate a situation that they cannot safely withdraw their membership from the IFIs because they desperately need their loans and grants. Such a radical move would not just be costly, but deadly too.

Fortunately, Kal observes that, ‘... a state would never agree to institutions that diminish its sovereignty unless it is in its interest to do so or some overwhelming power compels it to.’ [62]

The absolute dependency of developing countries on multinational corporations constitutes the overwhelming power which compels them to maintain unprofitable relations. This dependency is manifested in things like economic aid and security guarantees.

Therefore, Kal’s analysis is (with due respect) hardly relevant to understanding relations between developing countries and the IFIs. This is implicit in the author’s heavy reliance on Europe, North America and Japan (all economically self-sustaining states) to inform the article’s submissions.

4.3 Foreign States’ Interference

It is common knowledge that in today’s globalized world, the actions and policies of individual states, especially the economically powerful ones, constrain and influence the internal affairs of other states. [63]

For instance, powerful states often meddle in electoral democratic processes of developing states purposely to suit their own interests. A case in point is China (having huge business interests in Zambian copper industry), which in 2006 threatened to cut diplomatic relations with Zambia if Michael Chilufya Sata (whom China accused of harbouring anti-Chinese sentiments) won the presidential election. [64] Sata lost that race to Late President Levy Mwanawasa, but won the recent presidential election held on 20 September 2011, after he reportedly toned down his anti-Chinese rhetoric. [65]

However, one state’s foreign policy – i.e. the United States of America – deserves special mention and scrutiny, for reasons that being a key player on the world scene, with hardly rivalled authority, the US highly strongly influences most trends in developing countries.

The IMF and World Bank were created in July 1944, in a conference held at Bretton Woods, New Hampshire, USA, by the delegates of 44 nations. [66] With much of Europe destroyed by the Second World War, the US was economically the world’s most powerful country. This reality was the decisive factor at the conference, such that a US vision prevailed, which culminated into the creation of the Bank and IMF along US chosen lines. [67]

Over 60 years later, the American government still dominates both bodies because it has veto power over their decisions. The World Bank and IMF are controlled by a one-dollar-one-vote system, not one-country-one-vote. USA’s voting share is 17.16% in the IMF and 16.41% in the World Bank and in both organizations changes to the Articles of Agreement require 85% of the votes. [68] It should also be noted that the US alone funds about 51% of the Bank’s budget. [69]

With this enormous power, the US uses these institutions to subjugate poor countries’ economies since, as the adage goes, he who pays the piper, calls the tune.

This predominance has ensured that whatever the two institutions’ theoretical mandates might be, they should become instruments of US foreign policy; [70] their role being to fully integrate developing countries into the American dominated global capitalist system in the subordinate position of raw material supplier and open market. [71]

This crusade started in the 1980s during the presidency of Ronald Reagan who preached free market ideology in the US, assisted by Margaret Thatcher in the United Kingdom (UK). [72]

The IMF and the World Bank were assigned the duty to spread these ideas on poor developing countries that often badly needed their loans and grants. [73]

Asad observes (and I agree) that, '... World Bank and IMF SAPs have de-developed Africa and left it in a state of economic and social collapse. The destructive effect of these two institutions cannot be over-emphasized. ... However, the World Bank and the IMF are not the main problem; they are merely instruments for the imposition of a U.S. imperial design upon Africa and the rest of the Third World.' [74]

American foreign policy in the developing world is premised on might rather than right. The World Bank and IMF complement its use of the Pentagon and the Central Intelligence Agency (CIA) to crush developing countries aspiring to independent development. [75]

For example, between 1972 and 1976, Chile was destabilized by President Richard Nixon who, in order to ‘make the Chilean economy scream’, stopped World Bank loans to the elected government of Salvador Allende in 1972, thereby causing an economic crisis that paved way for General Augusto Pinochet’s 1973 bloody coup. The US poured aid on the new dictatorial military regime and from 1973-1976, the World Bank gave Chile US$ 350.5 million, almost 13 times more than the US$ 27.7 million it gave, during the three year Allende presidency! [76]

Though unfortunate, this approach is understandable because the structure of the international system induces states to maximize their relative power position, since there are no satisfied or status quo states; rather all states are continually searching for opportunities to gain power at the expense of others. [77]

Therefore, talking of economic sovereignty for poor developing countries, which are mere dependants of rich and powerful states like the US, is purely wishful thinking. Their inferior position in the global economy militates against their enjoyment of rights proclaimed in UN conferences and concretized in resolutions.

As Stiglitz notes, 'Small developing countries are like small boats. Rapid capital market liberalization, in the manner pushed by the IMF [and the US], amount[s] to setting them off on a voyage on a rough sea, before the holes in their hulls have been repaired, before the captain has received training, before life vests have been put on board. Even in the best of circumstances, there [i]s a high likelihood that they w[ill] be overturned when ... hit broadside by a big wave.’ [78]

4.4. Internal State Failures

One wise sage remarked that, a great civilization cannot be destroyed from without unless it destroys itself from within. Developing countries have their own serious internal shortcomings that inevitably undermine their economic sovereignty.

Often they are ruled by comprador ruling elites (like Late Zaire President Mobutu Sese Seko) who operate as agents of oppression and exploitation for their masters in developed countries. [79] Their leaders are told to sell their countries’ national assets following promises of huge commissions paid into Swiss bank accounts. ‘You could see their eyes widen [at the prospect and] objections to selling off state industries were silenced,’ said Joseph Stiglitz, former World Bank Chief Economist and Senior Vice President. [80] Their societies glorify and reward corruption, either expressly or inadvertently. [81]

Then, most regimes in developing countries are unaccountable and dictatorial. [82] They preside over undemocratic systems that are unsustainable because of their exclusionary nature. This promotes popular public discontent which inevitably compromises social, political and economic structures that are necessary for upholding national sovereignty.

The on-going Arab uprising highlights this, especially in the Libyan situation, where Colonel Muammar Gaddafi abolished elections in his 42 years presidency. His macabre attack on peaceful protesters demanding human rights and democratic reforms triggered a full scale war that even prompted foreign military intervention, which critics say is mainly driven by the desire to ‘steal’ Libyan oil and other minerals.

The 42 years of Libyan stability and self-sustaining economic progress, registered under Gaddafi’s leadership, was a unique opportunity in which to establish long-lasting and firm institutions capable of safeguarding Libyan assets and interests.

But the failure to establish democratic institutions, that would outlive individualism, has shattered the country and brought it back to square one. This vindicates US President Barack Obama’s assertion that, ‘prosperity without freedom is a form of poverty’.

The Democratic Republic of Congo (DRC) is a good example of a developing country, whose vulnerability has undermined its sovereignty. This is demonstrated by the 11 September 1998 to 10 July 1999 invasion of its vast territory by Uganda, in the name of self-defence against rebel forces operating there. [83]

On 19 December 2005, the International Court of Justice (ICJ), found Uganda guilty of illegal invasion of DRC’s territory and commission of human rights violations. The Court ‘... conclude[d] that Uganda has violated the sovereignty and also the territorial integrity of the DRC’ and ordered it to pay compensation.

5. Conclusion

Economic sovereignty is a fully debated doctrine in international economic law, with sufficient UN legislative guarantees.

Unfortunately, its effectiveness is impeded by several challenges which render it illusory, mythical and fallacious.

The lack of a power balance mechanism in the contemporary international system, renders any talk of economic sovereignty in developing countries, a beggar’s wish.

Therefore, Trachtman’s anticipated international economic law revolution, in so far as it concerns ‘... fundamentally a law of competition which permits and forbids certain competitive acts in international trade ...’, may not occur any time soon. [84]

6. The Way Forward

The challenges to economic sovereignty in developing countries, being imperialistic, are politically oriented, except that they are economically disguised. Therefore, countering them requires political strategies.

Developing countries should aspire to relate with their developed counterparts under their own terms, while pursuing partial delinking.

Partial because global association ‘... is not only a desirable but inevitable course of events, which no people worth their name can afford to neglect.’ [85] Instead of seeking loans and grants, they should mobilize for ‘development from within.’ [86]

This may not be easy, but as Bobby Kennedy said, the future is not a gift but an achievement. The world is for giants and developing countries should claim and secure their place.

The IFIs and developed states like the US, should genuinely support development efforts in the developing world, because as Phillipe Cullet notes, 'In economic terms, developed countries gain from a secure access to primary resources situated to a large extent in developing countries. Besides, they will also eventually gain from developing countries becoming richer and being more amenable to absorb part of the production of developed countries, be it in the form of manufactured goods or services. Some of the more successful developing countries in economic terms now constitute significant export markets for the North and these cannot easily be abandoned.' [87]

Notes and References

1. Anthony D’Amato, ‘Is International Law Really “Law”?’ 79 NULR, (1985), at 1308.

2. GA Res. 3281 (XXIX), 12 December 1974, chapter 1.

3. Boniface E.S. Mgonja and Iddi A.M. Makombe, ‘Debating International Relations and its Relevance to the Third World’ 3(1) AJPSIR (2009), at 031. International anarchy denotes a system of states characterized by competition, conflict, and power politics.

4. Ibid., at 027.

5. Philippe Cullet, ‘Differential Treatment in International Law: Towards, a New Paradigm of Inter-state Relations’, 10 EJIL (1999), at 551.

6. The question is whether international law, is law properly called or simply international relations. But this is beyond the scope of this essay and it need not detain us here. For an in-depth discussion on this issue, see Anthony D’Amato, supra note 1.

7. Joel P. Trachtman, ‘The International Economic Law Revolution’, JIEL (1996), at 9.

8. Ibid., at 3.

9. S.P. Subedi, International Economic Law (2007), at 21.

10. A.S. Hornby, A.P. Cowie and A.C. Gimson, Oxford Advanced Learner’s Dictionary of Current English (1983), at 280.

11. Joel P. Trachtman, supra note 7, at 2-3.

12. A.S. Hornby, A.P. Cowie and A.C. Gimson, supra note 10.

13. Kal Raustiala, ‘Rethinking the Sovereignty Debate in International Economic Law’ 6(4) JIEL (2003) at 842.

14. Geert van Calster, ‘International Law and Sovereignty in the Age of Globalization’, EOLSS, at 2.

15. John H. Jackson, ‘Sovereignty-Modern: A New Approach to an Outdated Concept’, 97:782 AJIL (2003), at 789.

16. S.P. Subedi, supra note 9, at 23.

17. Ibid., at 22.

18. Philippe Cullet, supra note 5, at 565.

19. Ibid.

20. S.P. Subedi, Supra note 9, at 22.

21. Philippe Cullet, supra note 5, at 565.

22. Ibid.

23. GA Res. 1803 (XVII), 14 December 1962.

24. This concept has its origins in the 1970s unilateral demands of developing countries, for a New International Economic Order (NIEO), centring on the denunciation of injustice in economic relations among developed and developing countries. See, Philippe Cullet, supra note 5, at 566.

25. GA Res. 1803 (XVII), supra note 23, Preamble, paragraph three.

26. GA Res. 3281 (XXIX), 12 December 1974.

27. GA Res. 41/128, 4 December 1986.

28. But see the 1995 Uganda Constitution which recognizes the right to development in its national objectives and directive principles of state policy. Nevertheless, it is not clear why it was not expressly included among the fundamental and other human rights and freedoms, in Chapter four thereof.

29. S.P. Subedi, supra note 9, at 27.

30. Ibid., at 28.

31. GA Res. 3281 (XXIX), supra note 26.

32. GA Res. 37/7, 28 October 1982.

33. GA Res. 42/187, 11 December 1987.

34. S.P. Subedi, supra note 9, at 30.

35. GA Res. 42/187, supra note 33.

36. S.P. Subedi, supra note 9, at 31.

37. Ibid., at 30.

38. Preamble, paragraph four.

39. Preamble, paragraph five.

40. Joaquin Varela Suanzes, ‘Sovereignty in British Legal Doctrine’, (1999), at 3.

41. Joseph E. Stiglitz, Globalization and its Discontents (2002), at 9.

42. Philippe Cullet, supra note 5, at 550.

43. Joseph E. Stiglitz, supra note 41 at 5.

44. Ibid., at 4-5.

45. Ibid.

46. Ibid., at 5-6.

47. Europe and North America, who are the lead promoters of globalization, are in fact hypocrites. For instance, whereas they push developing countries to eliminate trade barriers, they maintain theirs; thereby preventing poor countries from exporting and making it difficult for them to compete. This denies them needed export income.

48. Joseph E. Stiglitz, supra note 41, at 8-9.

49. Ibid., at 10.

50. Kal Raustiala, supra note 13, at 842.

51. Joseph E. Stiglitz, supra note 41, at 22.

52. Asad Ismi, ‘Impoverishing a Continent: The World Bank and the IMF in Africa’ (2004), at 5.

53. SAPs require governments to: cut public spending (including eliminating subsidies for food, medical care and education); raise interests, thus reducing access to credit; privatize state enterprises; increase exports; and reduce barriers to trade and foreign investment such as tariffs and import duties.

54. Asad Ismi, supra note 52 at 5-6.

55. Joseph E. Stiglitz, supra note 41, at 17-18. No wonder therefore, that it is becoming difficult for IFIs to meet without attracting crowds of protestors pouring scorn over their policies.

56. Jorge Daniel Taillant, ‘Human Rights and the International Financial Institutions’ (2002), at 3.

57. Martin Luther Oketch, ‘WB predicts slow growth for EA economies’ Daily Monitor, 26 September 2011.

58. Kal Raustiala, supra note 13.

59. Ibid., at 843.

60. Ibid., at 846.

61. Ibid., (emphasis added).

62. Ibid., at 856 (emphasis added).

63. John H. Jackson, supra note 15.

64. Wikipedia, http://en.wikipedia.org/wiki/Michael_Sata#2011_election (accessed on 27 September, 2011).

65. Ibid.

66. David D. Driscoll, ‘The IMF and the World Bank: How Do They Differ?’ (1996), at 1.

67. Asad Ismi, supra note 52, at 7.

68. Ibid.

69. Bhoyy Jalloh, ‘The IMF and World Bank are Major Causes of Poverty in Africa’ MercyCorps/global envision (2007), at 2.

70. Asad Ismi, supra note 52, at 8.

71. Ibid.

72. Joseph E. Stiglitz, supra note 41, at 13.

73. Ibid. The Bank and IMF are said to play a god-father role since they make irresistible offers to countries.

74. Ibid., at 21 (with emphasis added).

75. Asad Ismi, supra note 52, at 8.

76. Ibid.

77. Boniface E.S. Mgonja and Iddi A.M. Makombe, supra note 3, at 31.

78. Joseph E. Stiglitz, supra note 41, at 17.

79. E.M. Nyanja Musoke, ‘Donors and the Hope for Development in the Third World’ (2001), at 10 (on file with author).

80. Asad Ismi, supra note 52, at 18.

81. Bakampa Brian Baryaguma, ‘Pragmatically Fighting Corruption through Collective Action: Challenges and Associated Solutions for Companies’, (2009), at 5.

82. Bakampa Brian Baryaguma, ‘The African Dream’ (2009), at 10 (on file with author).

83. International Court of Justice, Case Concerning Armed Activities on the territory of the Congo: (Democratic Republic of the Congo v. Uganda), 2005.

84. Joel P. Trachtman, supra note 7, at 9-10.

85. Bakampa Brian Baryaguma, ‘The African Dream’ supra note 82 at 9.

86. E.M. Nyanja Musoke, Supra note 79, at 2.

87. Philippe Cullet, supra note 5, at 560.