SUSTAINABLE DEVELOPMENT IN THE NEW ECONOMIC (DIS)ORDER: THE RELATIONSHIP BETWEEN FREE TRADE, TRANSNATIONAL CORPORATIONS, INTERNATIONAL FINANCIAL INSTITUTIONS AND ‘ECONOMIC MIRACLES’

‘Free trade’ in the 1990s — the legacy of the 1980s Thatcher/Reagan free market era — has been portrayed as a panacea to cure recession in the economies of industrialized countries and deeply rooted social problems in poor countries. Over 70% of international trade is controlled by transnational corporations (TNCs), which have became the biggest world economic power of this century, helped by trade agreements signed at the World Trade Organization (formerly GATT), the North American Free Trade Agreement, the European Union and other similar organizations. Impressed by the ‘economic miracle’ of East Asian countries, the International Monetary Fund and the World Bank are pushing the ‘tiger’ economic model as a solution for developing and least developed countries to grow. Governments anxious to increase employment, acquire hard currency and improve their industrial power image are also keen to offer TNCs subsidies, tax incentives, less trade barriers, low cost wages, flexible environmental legislation, land, cheap energy and water supply. Environmentalists, academics and some economists believe that the combination of free trade and TNCs will not solve local poverty, might adversely contribute to increase environmental degradation and widen the unequal distribution of global wealth. There is a great concern that sustainable development would be not possible in this ‘new economic (dis)order’.  The global system is marked by a very great asymmetry. The most important economic, political and cultural–ideological goods that circulate around the globe tend to be owned and/or controlled by small groups in a relatively small number of countries (Sklair, 1991).