Owen Arthur Warns Against 'Race To The Bottom' To Attract Investment

by Philip Morton, Investors Offshore.com

19 June 2002

Speaking at the 90th session of the International Labour Organization conference in Switzerland last week, Barbadian Prime Minister, Owen Arthur warned that the international drive to attract foreign investment may lead to a 'race to the bottom' in terms of labour protection and social investment.

Mr Arthur reportedly told delegates that as a result of the current economic climate and the prevailing - and increasingly rampant - free market ideology, 'the ends of production are now being set only to maximise shareholder value'.

According to the Barbadian Prime Minister, who was the guest of honour at the session last week, this has meant that many national economies - in particular developing ones - have been forced to compete for foreign investment by lowering labour rights, and undercutting other countries in terms of corporate taxation. This has effectively meant that investment capital and international businesses can go 'regime shopping' according to Mr Arthur.

Reporting on the meeting this week, the Barbados Advocate quoted the Prime Minister as announcing that:

'The conditions of genuine global development can only be achieved if the existing dominant agenda in support of free trade, the protection of private investment and intellectual property rights, and the creation of an environment conducive to financial and capital mobility is counterbalanced and enriched by equal concern for matters pertaining to labour mobility (and) codes of conduct for transnational corporations.'

He added that: 'the development of sound rules to govern international competition and the development of compensatory financing mechanisms to sustain the participation of those in danger of being left out or left behind' are also essential elements if the current system is to benefit the entire international community.

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