|In Defence of UNCTAD|
Industrialised countries have mounted an unprecedented campaign to stop the United Nations Conference on Trade and Development (UNCTAD) from providing policy advice to the poorest countries in Africa and across the globe - but developing countries and progressive economists are fighting back.
12th April 2012 - By Gustavo Capdevila, IPS News
The reason the United Nations Conference on Trade and Development (UNCTAD) is under attack is that rich countries do not want an organisation that carries out independent analysis, Rubens Ricupero, UNCTAD secretary general from 1995 to 2004, told IPS.
In recent weeks UNCTAD has come under fire from powerful industrialised countries that wish to modify its mandate, which since its creation in 1964 has been the defence of the interests of poor nations.
According to officials in countries of the global South, the nations of the industrialised North see the agency's advice on finances, the environment, food security, intellectual property and development as running counter to their own free market and free trade agenda.
Around 50 former senior UNCTAD staff members, including Ricupero, issued a statement Wednesday Apr. 11 in Geneva at a meeting with five journalists, including IPS, denouncing efforts to silence the United Nations agency.
Turkish researcher Yilmaz Akyuz, one of the signatories of the statement titled "Silencing the message or the messenger ... or both?", attributed the attempt to gag UNCTAD to leading countries of the Organisation for Economic Cooperation and Development (OECD), known as the "rich nations club".
The endeavour to stifle UNCTAD is happening just when a broadly participative debate on the governance of international finance and of the entire world economy is desperately needed, said Akyuz, a former chief economist at UNCTAD and now chief economist at the South Centre, an organisation of developing countries based in Geneva.
The collective statement says that UNCTAD's analyses of global macroeconomic issues with a development perspective have for years "provided an alternative view to that offered by the World Bank and the IMF controlled by the West."
UNCTAD was "ahead of the curve in its warnings of how global finance was trumping the real economy": it forecast the 1994-1995 Mexican crisis, the East Asian crisis of 1997 and the late 2001 financial and economic collapse in Argentina, the document says.
"No organisation correctly foresaw the current crisis, and no organisation has a magic wand to deal with present difficulties," the communiqué says. "But it is unquestionable that the crisis originated in and is widespread among the countries that now wish to stifle debate about global economic policies, despite their own manifest failings in this area."
John Burley, who worked for UNCTAD for 17 years in senior positions, and who coordinated the letter, said the attack by rich countries is aimed at important principles, such as the plurality of viewpoints in the international system, and freedom of speech in the organisation.
The attack, which will be debated at the 13th session of UNCTAD to be held in Doha, the capital of Qatar, Apr. 21-26, is not the first onslaught the organisation has had to contend with, said Burley.
Ricupero's experience is illustrative. "When I arrived at UNCTAD in 1995 there was already a conspiracy afoot by 'the usual suspects,' the rich countries - not to change the mandate as they want to now, but to simply suppress the organisation they have never accepted since its inception," he told IPS in an interview Tuesday Apr. 10.
The pretext then was the creation, a few months earlier, of the World Trade Organisation (WTO), which supposedly would make UNCTAD superfluous.
"A clear indication of what I am saying is that the post of secretary general had been left vacant for nearly a year, something that had never happened before and has never happened since," he said.
That threat was overcome by means of a vigorous reaction that "we launched with the backing of many developing countries," Ricupero said.
The Brazilian politician and diplomat particularly mentioned the support from South Africa, which was then at the height of its international prestige under the presidency of Nelson Mandela (1994-1999).
The holding of the 9th session of UNCTAD in the northern South African city of Midrand in 1996 thwarted the conspiracy for a time, Ricupero said.
But the attacks were repeated later under a different guise, nearly always with the goal of limiting the agency's mandate, he said.
"It is an open secret that over the past few decades, UNCTAD was deprived of the opportunity to work on areas that had been its original raison d'être, like commodities," said Ricupero.
The pretexts for the rich countries' attacks have varied over time, he said. They tend to be dressed up in false arguments such as the inefficiency of the secretariat, or the duplication of efforts with other organisations.
But in Ricupero's view, the true motive is very different. "The rich countries don't like an organisation that is outside their control, and has the capacity for independent analysis, giving advice to African countries, for instance, against the neocolonialist intentions of France and of European countries in general," he said.
"The more the facts prove UNCTAD right in its forecasts, about the risks of finance-driven globalisation, for example, the more those who side with the powers responsible for the lamentable state of anarchy of the international monetary and financial system will try to silence it," he said.
Against this continuing danger, there is only one weapon, "unity and vigorous reaction from developing countries," he said.
Unfortunately, every time the rich countries have succeeded in cutting back UNCTAD's powers, it has mainly been due to "the relative lack of interest, or qualifications, or the inefficiency, or lack of courage" of those who should be the first to defend "the organisation that exists to serve the world's defenceless poor," he concluded. (END)
6th April 2012 - By Ravi Kanth Deverakonda, IPS News
Industrialised countries have mounted an unprecedented campaign to stop the United Nations Conference on Trade and Development from providing policy advice to the poorest countries in Africa and across the globe.
As UNCTAD attempts to secure a new mandate at its ministerial meeting in Doha, Qatar, from Apr. 21 to 26, industrialised countries have voiced their unhappiness with the agency’s policy advice to developing nations.
According to trade officials from developing countries, industrialised countries believe that the agency’s advice on finance, environment, food security, intellectual property rights and development clashes with their market-driven liberal agenda.
"Developed countries do not want UNCTAD to enter into finance on the grounds that it is an area that only the International Monetary Fund and the World Bank must handle," said Lesotho’s ambassador to the U.N. and World Trade Organization (WTO), Dr. Anthony Mothae Maruping. He is also chair of the UNCTAD negotiating committee in charge of the draft text for the upcoming meeting. Maruping said that he was working to bridge the differences between the industrialised countries, led by the European Union (EU) and the United States (U.S.), and the G77 and China - the coalition of developing countries.
The draft text on the agency’s mandate for the next four years outlines its research and policy advice on subjects including the current economic recession, exchange rate misalignments, the volatility and financialisation of commodity markets, special and differential treatment for developing countries, regional financial and monetary cooperation, and the need for the reform of the international financial and economic architecture. In his report for the Doha meeting, UNCTAD Secretary-General Dr. Supachai Panitchpakdi calls for a paradigmatic shift to development-oriented growth that would bring about sustainable and inclusive economic and social change in the world’s least-developed countries (LDCs).
"The combination of macroeconomic austerity, rapid liberalisation, privatisation, and deregulation not only failed to produce a supply-side revolution but, instead, set the region (Africa) back economically; productivity growth stalled in most sectors, and the informal economy had grown rapidly since the onset of the international debt crisis in the early 1980s," Panitchpakdi said in the report.
He argued that the time has come for moving away from finance-driven globalisation, which has characterised the dominant pattern of international economic relations based on a one-size-fits-all policy agenda. He said this has had a destructive impact on all countries, particularly on least- developed ones.
However, the aftershocks of the global economic crisis of 2008 continue to reverberate across the world in countries like the United States, the United Kingdom, France, Germany, Greece, and Portugal.
It is little wonder that, despite this, industrialised countries led by the U.S. and the EU are stubbornly pressing ahead with their failed boom-and-bust policies, say analysts.
Against this backdrop, UNCTAD’s meeting in Doha has assumed considerable importance in setting out a new agenda.
"It comes at a time when global economic governance is under close scrutiny, with growing concerns about the health of the multilateral agenda," said Richard Kozul-Wright, the head of UNCTAD’s Unit on Economic Cooperation and Integration among Developing Countries.
A plurilateral agreement allows member countries to voluntarily agree to new rules. In contrast, in a multilateral agreement all members have to be in agreement.
"The stalled Doha Round, the slow pace of climate discussions and the failure of the international community to pre-empt recurrent food crises have added to the growing concerns about multilateralism," he told IPS.
UNCTAD was the first multilateral body, since its inception in 1964, to point out the dangers of an unsustainable housing bubble and the unsustainable public and private debt of industrialised countries. Its 1997 report cautioned against the downside risks of finance-driven globalisation.
The U.N. agency also cautioned against the demands made on developing countries during the Doha negotiations to reduce the tariffs on their industrial goods to almost zero.
"UNCTAD’s work in all areas is commendable," said Dr. Matern Yakobo Christian Lumbanga, Tanzania’s ambassador to the U.N. and WTO. "UNCTAD’s assistance in different policy areas is vital for LDCs and it has rightly advised us not to depend on one or two areas of exports or raw materials." He said that LDCs in Africa have come to realise the benefits of diversification, as advocated by UNCTAD.
The upcoming UNCTAD meeting is going to address the specific concerns of the LDCs, and will focus on durable economic changes such as "broadening the variety and sophistication of goods and services produced so that LDCs are less vulnerable to external shocks," said Kozul-Wright. "This is the most pressing of the rebalancing challenges, which must include an emphasis on job creation, social protection and environmental sustainability if the opportunities provided by a more open global economy are to improve the lives of many rather than the favoured few," he said.
13th April - By Duncan Green, Poverty to Power
The UN system is normally a terribly polite sort of place, but something is seriously amiss at UNCTAD. Despite its name (The UN Conference on Trade and Development), UNCTAD is a permanent body founded in 1964, which even at the height of Washington Consensus orthodoxy, provided developing countries with an invaluable source of thinking on alternative, heterodox policies on trade and finance (see my recent post on its latest hard-hitting report).
Now, it is under threat in the run-up to its big once-every-four-years conference, which kicks off in Qatar on 21st April. Developed countries stand accused of trying to narrow its mandate and effectively shut down its role as an alternative voice. On Wednesday, a phalanx of former senior staff and other big economic cheeses like Dani Rodrik went public with a press conference in Geneva and presented the following statement.
“Statement by former staff members of UNCTAD, Geneva, 11 April 2012
Silencing the message or the messenger …. or both?
Since its establishment almost 50 years ago at the instigation of developing countries UNCTAD has always been a thorn in the flesh of economic orthodoxy. Its analyses of global macro-economic issues from a development perspective have regularly provided an alternative view to that offered by the World Bank and the IMF controlled by the west.
Now efforts are afoot to silence that voice. It might be understandable if this analysis was being eliminated because it duplicated the work and views of other international organizations, but the opposite is the case – a few countries want to suppress any dissent with the prevailing orthodoxy.
No multilateral institution is perfect, but UNCTAD’s track-record of analysis and warnings on global trends and problems certainly stands up to those of other organisations. As otherwise unfavourable commentators have occasionally admitted, UNCTAD was ahead of the curve in its warnings of how global finance was trumping the real economy, both nationally and internationally. It forecast the Mexican tequila crisis of 1994/5. It warned of the East Asian crisis of 1997 and the Argentinian crisis of 2001. It has consistently sounded the alarm of the dangers of excessive deregulation of financial markets. It has stressed the perils of rapid, non-reciprocal trade liberalization by developing countries. UNCTAD economists have not had to suffer the psychology of denial so prevalent in other organisations.
So why is the UNCTAD message so unwelcome? The fact that UNCTAD has no formal responsibility for the global management of the international economy and none of its own funds to dispense means that its analysis is free of vested interests. No organisation correctly foresaw the current crisis, and no organisation has a magic wand to deal with present difficulties. But it is unquestionable that the crisis originated in and is widespread among the countries that now wish to stifle debate about global economic policies, despite their own manifest failings in this area.
Because of the crisis, we do now have a better explanation of the inter-relationships between the real economy and the world of finance. Those explanations are now a good deal closer to what UNCTAD has been saying for nigh on three decades about the dangers of finance-driven globalization. And it is precisely in its analysis of interdependence that UNCTAD brings added value to an understanding of how the functioning of the global economy impacts on the majority of the world’s population who live in developing countries. Given the current pressure on the organisation and its secretariat, that contribution could now be gone for good.
Why now? UNCTAD is about to have its next quadrennial conference (Doha, 21-26 April). UNCTAD conferences are a shadow of their past, being now simply a time to agree on secretariat work programme priorities for the next four years. But that is precisely what is at stake.
Developing countries in Geneva, again, are struggling to resist the strong pressure piled on them by OECD countries and to defend the organisation to which they had been “umbilically” tied. They are not fully succeeding, in spite of the BRICS pledge of support manifested at its recent summit. So the developed countries in Geneva have seized the occasion to stifle UNCTAD’s capacity to think outside the box. This is neither a cost-saving measure nor an attempt to “eliminate duplication” as some would claim. The budget for UNCTAD’s research work is peanuts and disparate views on economic policy are needed today more than ever as the world clamours for new economic thinking as a sustainable way out of the current crisis. No, it is rather – if you cannot kill the message, at least kill the messenger.
All of the undersigned have worked as senior officials for UNCTAD at one time or another. Individually, we may not necessarily have agreed with what UNCTAD was saying on specific issues. We have no vested interest in this matter except that we all fervently believe in the value of maintaining an independent research capability that serves to focus inter-governmental debates on how the workings of the global economy affect developing countries.
At time when pluralism is finally being meaningfully discussed in the election of the President of the World Bank, it is ironic that OECD countries are endeavouring to stifle freedom of speech within another multilateral organization.
If those who were proud to work for UNCTAD do not speak out now, who will?”
If true (and the signatories are serious people), the attack on UNCTAD feels more like some G8-led skirmish from the 1990s than a response to a global economy in turmoil. Surely now, more than ever, we need new thinking, and power and voice needs to shift to the developing countries? I’m genuinely baffled by why thisis happening now – if anyone from DFID or elsewhere cares to explain, feel free. More background in the Guardian from the LSE’s Robert Wade.
12th April 2012 - By Paul Rogers, Open Democracy
A paradox of the current political and media world is that the intergovernmental body with the best record in supporting the interests of the poorest gets the least attention and support. The World Bank, the International Monetary Fund (IMF) and the World Trade Organisation (WTO) seem everywhere, but another institution with key global responsibilities - the United Nations Conference on Trade and Development ↑ (Unctad) - finds itself consistently sidelined by the most powerful states.
This seems especially strange in light of Unctad's record ↑, which include its prescient warnings over the years of the dangers of industrialised countries accumulating unsustainable debts. As early as 1997 it "cautioned against the downside risks of finance driven globalisation" (see Ravi Kanth Deverakonda, "The Battle over Development-Led Globalisation ↑ ", TerraViva/IPS, 6 April 2012).
Unctad maintains a secretariat in Geneva, with its main negotiating forum a quadrennial conference; the next one will be held ↑ in Doha on 21-26 April 2012. The agenda includes ↑ setting Unctad's work for the next four years - and it is here that powerful western states are working to limit the body's role. Their intention, backed by a sustained campaign, is to prevent Unctad giving policy advice to some of the world's poorest countries on the grounds is that this is the prerogative respectively of the IMF ↑ (over financial issues) and the WTO ↑ (over trade).
In one sense this rich-world plan ↑ is no surprise, in that in its inception and since its early years Unctad's main focus was and has been the interests of the poorer countries. Its very formation in 1964 was owed to the arrival of numerous former colonies joining ↑ the UN as independent states, able to articulate resentment at a world trading system skewed against their economic interests - and exerting moral, political and intellectual pressure that was impossible to ignore.
Unctad's first head was the Argentine economist Raul Prebisch ↑ (1901-86), himself appointed by the then UN secretary-general, U Thant. The scheduling of its first ↑ conference in Geneva in 1964 inspired Prebisch and a team of economists to published a set of proposals that linked trade reform to improved development chances.
Towards a New Trade Policy for Development ↑ - always better known as the "Prebisch report" - advocated policies that were progressive in the context of the time, and directly counter to later free-market orthodoxy. A key item was commodity agreements designed to provide stable prices for commodity exports from the "third world". These would be negotiated between the main producing and consuming states, and would be backed by buffer stocks and a compensatory finance system to protect poorer countries suffering from temporary problems (such as poor harvests).
Prebisch's ↑ further recommendations were a tariff-preference system, poor-country involvement in invisibles such as insurance and transport, improved development assistance and schemes for regional industrialisation across what would later be termed the "global south".
Unctad's first eight years were a struggle to establish such concerns on the international policy agenda, as powerful states sought to maintain the status quo even in the face of deteriorating terms of trade for many in the south. But by Unctad's third session ↑ in 1972 in Santiago, Chile ("Unctad III"), a change in the global climate was becoming apparent; over the next two years, in the context of a general increase in commodity prices, oil producers were becoming more confident, the richer states were starting to feel vulnerable at ther growing dependency, and pressure for a change in the overall balance accelerated.
In early 1974, a special session of the United Nations general assembly was convened which led to the call for a "new international economic order" (NIEO ↑ ). Unctad itself argued for an "integrated programme for commodities" as a core part of the NIEO and - with the poorer states able by then to wield some negotiating power - this was agreed even over entrenched opposition.
The programme was to be negotiated at Unctad IV ↑ in 1976, in Nairobi. But by then economic stagnation had set in, commodity prices had fallen back, and the richer states were no longer interested in managed world trade. The ideological tide turned to the right over the next few years, and by the early 1980s the ideas underpinning ↑ the NIEO were becoming anathema. The "Washington consensus ↑ " emerged as a new othodoxy that guided the World Bank and IMF's imposition of radical austerity across much of the south.
The forthcoming Doha meeting will be Unctad XIII ↑ - and the number, representing thirty-six years since the landmark Santiago conference and its aftermath, indicates for just how long the body has been trying to present ↑ a different worldview. Unctad has also acquired an unfortunate reputation, as "under no circumstances take any decision" - though that is largely a reflection of where international financial power lies. Yet it survives, and its very existence ↑ - and refusal to embrace the now-discredited free-market consensus - is an embarrassment to the world's traditional economic bastions.
But if the latter's position ↑ is predictable, it is more dismaying that emerging powers in the global south are so reluctant ↑ to support Unctad. The "Brics" states ↑ (Brazil, Russia, India, China and South Africa) now have the clout to support Unctad, but - says the LSE's Robert Wade ↑ - with the exception of South Africa show little inclination to do so.
The other four Brics, in resisting Unctad's planned ↑ agenda of backing the weaker states, "have remained largely passive in the face of [the] roll-back. They each appear to give greater priority to their new opportunities for negotiating in small groups with the major developed countries, including through the Group of 20 process. So major western countries feel they do not have to negotiate seriously on the issues that the developing countries want Unctad to work on" (see Robert Wade, "Support for Unctad could make a real difference ↑ ", Financial Times, 3 April 2012).
The Prebisch report, reread after almost half a century, strikingly resembles a blueprint for just the kind of trade system that activists and the "fairtrade" movement are today arguing for. Its emphasis ↑ on the need to link trade ↑ and development in systematic fashion is more relevant than ever. So it is vital that Unctad is allowed to maintain and advance this agenda. But given the realities of global power, don't hold your breath.
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