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TWN Info Service on WTO Issues (Nov 03/8)

21 November 2003

Third World Network

Dear friends and colleagues,

 

PRESENTATION OF NGO STATEMENT AT UNCTAD XI PREPARATION MEETING

UNCTAD XI, which is the eleventh Conference of the UN Conference on Trade and Development (held once in three or four years) will be held in June in Sao Paulo, Brazil.

A preparatory committee (prepcom) has been set up in UNCTAD for UNCTAD XI.

The first substantive session of this prepcom was held in Geneva on 17-20 November.

Several NGOs took part in a process of drafting a statement for the prepcom. 

Below is a presentation introduing this statement made by Goh Chien Yen of Third World Network, which was made at the opening part of the Prepcom meeting.   It is followed by a report of the responses of the delegations to this presentation.   The joint NGO statement is being sent separately.

With best wishes

Martin Khor

TWN

 

 

“UNCTAD XI SHOULD REVITALISE NOT FURTHER MARGINALISE UNCTAD”

Presentation by Goh Chien Yen, Third World Network, introducing the Civil Society Statement to the UNCTAD XI Preparatory Committee Meeting , 17-20 Nov 2003 in Geneva

Thank you for this opportunity for civil society to present our views on UNCTAD XI. We have met several times over the last month to prepare a civil society statement, which I have the pleasure of introducing. The statement is co-signed by Third World Network, CONGO, CONGAS, CIEL, Oxfam International, IATP, ICDA, ICFTU, International Gender and Trade Network, Public Service International, World Council of Churches, WWF International, Women and Development Denmark, and Coordination Sud.  In the process of preparation, we also have had the chance to think through for ourselves how we see the purpose and objectives of this conference and our role in it.

In our opinion, UNCTAD XI could be an important forum for tackling the most pressing developmental challenges confronting developing countries. Indeed, UNCTAD has taken the lead in doing so, addressing these issues through its own activities and analyses.

For instance, just last week, it held the 4th Inter-regional Debt Management Conference where solutions to the intractable problem of developing countries’ debt were explored and examined.

Through its analyses contained in the annual Trade and Development reports UNCTAD has pointed out the fundamental flaws and weaknesses in the international financial architecture, and have highlighted the imbalances and deficiencies of the multilateral trading system. Significantly, this year’s issue of the TDR provides a sobering critique and account of the failure of neo-liberal policies in delivering economic growth and development. Another example is The Economic Development in Africa report which is one of the few if not the only publication which critically assessed the limits and purported benefits of the World Bank and the IMF’s Poverty Reduction Strategy initiative.

The ultimate significance of these analyses and activities is that they enable developing countries to think through the interface between their own national development policies and the global economic environment.

This is valuable to all stakeholders in developing countries as they struggle to define an appropriate developmental strategy and their relationship with the global system. 

We hope that UNCTAD and the upcoming Conference will affirm and expand this vital function.

This approach of finding the right development strategy for each developing country in relation to the global economy stands in stark contrast to the one-size-fits all approach of market fundamentalism and liberalization. Regrettably, this neoliberal ideology has dictated the design of development strategies, ignoring the contradictions and iniquities in the global economic system which developing countries are routinely faced with.

It is thought that this neoliberal approach would usher in a period of sustained economic growth. Strategies for this purpose have required many developing countries to break with past policies and to pursue closer and faster indiscriminate integration into the world economy. However, the past two decades have been characterized by slow and erratic growth, increased instability, and rising income gaps between most developing countries and the industrial world and the unprecedented erosion of natural resource base. In real terms, millions of people especially those in the poorest countries continue to live in abject poverty and resource insecurity. For them, even the pragmatic objective of reaching the Millennium Development Goals by 2015 remains a distant and empty promise. 

Nonetheless, the WTO, World Bank and the IMF dogmatically continue to pressurize developing countries to adopt policies promoting greater market fundamentalism, a minimal role for the state and further liberalization. Perhaps as explained in this year’s UNCTAD Trade and Development Report, “fanaticism calls for a doubling of effort in the face of failure.”

The UN and its agencies, such as UNCTAD, on the other hand, operate under a different belief, one that sees public intervention and a proactive state as necessary to enable basic needs to be met and human rights fulfilled.

More importantly, UNCTAD and the UN have provided not only policy options for governments but have offered a vision of equity to the international economic system and the relationship between developed and developing countries premised on North-South partnership and the right to development, instead of the principles of liberalization and laissez-faire.

This should be one of the cornerstone principles of UNCTAD XI.

The dangerous disregard for the contradictions and iniquities in the global economic system is a vital issue which UNCTAD XI must tackle head on as it deliberates on appropriate development strategies in a globalising world.

We know that in today’s increasingly interdependent world, developing countries are ever more vulnerable to disturbances emanating from the advanced industrial countries.

International trade has been an important channel in transmitting the slowdown in the industrial countries to developing countries. Furthermore, in many regions, slower growth in export volumes has been compounded by lower prices, particularly those of primary commodities. In addition, developed countries continue to distort international trade by dumping artificially cheap agricultural products maintained inter alia, through high export and domestic subsidies.  More importantly, the rhetoric of free trade does not reflect the reality of widening trade deficits, the closing down of firms and farms leading to the loss of jobs and livelihoods, the degradation of the environment and the further marginalization of women and vulnerable groups in many developing countries which have adopted trade liberalization policies.

These critical issues must be taken up and effectively addressed by UNCTAD XI, if trade is to become a genuine prime lever for sustainable development. UNCTAD’s work in the area of trade has also provided an important counterpoint to the mainstream and uncritical view that greater liberalization would simply bring economic growth. In relation to some of these problems, UNCTAD has also provided support, research and analyses to developing countries in their trade negotiations. This critical function must be affirmed and expanded by UNCTAD XI.

Finance has been another channel of transmission of vulnerability. The expectation that liberal financial and monetary policies in the industrial and developing countries would trigger capital flows to the latter, has not happened. Rather, developing countries have been and continue to suffer from financial instability and crises, which have ravaged their economies, plunged them into debt and pushed millions of people below the poverty line.

We urge all delegations to ensure that the draft declaration for UNCTAD XI and the final declaration fully reflect commitments by governments to resolve the above mentioned global problems and that UNCTAD is provided with the continuation and expansion of its important role in seeking for solutions to these global economic problems.

Indeed, civil society will be judging the extent of success of UNCTAD XI according to whether UNCTAD is allowed to expand its role not only in assisting developing countries to cope with their national development problems, but even more so whether UNCTAD will have stronger capacities to help change the present unfair and unjust rules and practices of global trade, finance and investment. It is crucial therefore that UNCTAD is not diverted onto a path, which is uncritically accepting of globalisation. In this kind of scenario, UNCTAD would end up shepherding developing countries into globalisation, regardless of its negative ramifications.

The changing of the unfair terms of global relations so that the developing countries could get a better share of global economic benefits was after all the reason for the formation of UNCTAD in the first place so many years ago.

We must admit today that the role of UNCTAD has been diminished because of the emergence of institutions such as the IMF, World Bank and the WTO, but as our statement makes clear, these other institutions now have diminished credibility everywhere in the world.  This diminished credibility is mainly due to the poor development record emanating from their policy advice and loan conditionalities and the imbalanced rules of the trading system. In so many parts of the world, there has been the eruption of financial, economic, social and even political crises as a result of countries having to follow the bad advice and rules of these other institutions.

It is now time for UNCTAD to be given back its appropriate, important function in the international arena. This is the time for UNCTAD to move ahead and to fill in the vacuum left by the failure of the orthodox policies. We urge all delegations and the UNCTAD secretariat and its leadership, to make use of the UNCTAD XI process, to revitalize UNCTAD both as an important secretariat working for development as well as a premier inter-governmental forum dealing with the interaction of trade, finance and development, in all their important facets.

It would surely be wrong if ironically, UNCTAD XI were to lead to a further marginalization of UNCTAD.

In this respect, on behalf of the Third World Network, I would add some comments on the pre-conference text for UNCTAD XI.

Whilst we find several interesting views reflected in the Secretary-General’s preparatory document on UNCTAD XI, we find that it is not bold enough in staking out UNCTAD’s role in this changed international scenario.

There is a mismatch between the recognized gravity of the problems, which the Conference is to address, and the level of ambition of the pre-Conference text.

We would especially like to stress that in Section One of the pre conference text on development strategies, while it has identified and listed most of the issues confronting developing countries, the critique, analyses and prescriptions are too modest, qualified and equivocal.

In relation to this first subtheme, “Development strategies in a globalizing world”,  we find that there is inadequate treatment of global economic problems such as the external debt crisis, the financial crisis and the need for a new financial architecture, the inadequacies and the adverse consequences of inappropriate loan conditionalities including the PRSPs, the issue of ODA inadequacy, and the negative transfer of resources from South to North which is now USD 200 billion a year, as remarked by the Secretary-General of the UN, Mr Kofi Annan during the Financing for Development follow up. The document does not seem to be giving an adequate role for UNCTAD to deal positively with all these critical issues.

This makes the pre-conference lopsided in comparison to the following two sections on “Building productive capacity and international competitiveness” and “Assuring development gains from the international trading system and trade negotiations” where UNCTAD’s role and contribution in these areas and the direction in which UNCTAD’s work is to be continued are more thoroughly and explicitly stated. These run well into three pages, while the equally critical if not more so, issue of creating an enabling international economic environment for development is summarily dealt with in barely a page.

On the recurring issue of coherence between the international economy and national strategies, the pre-conference text is notably silent on what needs to be obviously addressed, which is an honest and comprehensive account of all the external hindrances and curtailment to domestic policy formulation, such as the inappropriate structural adjustment policy conditionalities imposed by the international financial institutions, the predatory practices of transnational corporations and foreign capital, the imposition of imbalanced and often damaging commercial and trade rules through the WTO, regional and bilateral agreements. An analysis of these will allow for deeper understanding of the fundamental changes needed to the international economic system and their institutions in order to be supportive of development.

It is vital that this Conference and UNCTAD speak clearly and emphatically on the international problems undermining development on the one hand, and the principles, political gumption and proposals we need to decisively rectify them. 

Perhaps the Secretary-General and the secretariat of UNCTAD are too modest about UNCTAD’s role in this regard. We urge the delegations would take steps to rectify this deficiency and come up with language and text that adequately deals with these issues as well as with UNCTAD’s future role in these issues.

Finally, on a more practical note, UNCTAD should enhance its efforts in promoting UNCTAD XI and reaching out to more civil society organisations, especially those from developing countries.  Several practical hurdles such as the issue of accreditation, financing for civil society participation and the lack of information and advance notice of the UNCAD XI process have not yet been effectively addressed. .

The modalities of civil society participation should be open to allow civil society’s views, values, concerns, analyses and proposals to be taken into effective consideration for the purposes of this Conference. In this regard, our role as potential partners cannot simply be pre-determined as merely “supporting the objectives and policies defined at the intergovernmental level” as envisaged in the preparatory document for UNCTAD XI.

These logistical matters and the modalities of civil society participation should be dealt with immediately. A list of practical concerns and recommendations is appended to this statement.

 

REPORT OF RESPONSES BY DELEGATIONS TO THE PRESENTATION

Following the above presentation, there were responses from delegations and the UNCTAD Secretariat. 

Below is a report of this.

 

The Ambassador of Jamaica, speaking for the G77 and China supported the civil society statement and thanked Goh for his presentation. According to the Ambassador, Goh’s presentation makes clear what UNCTAD should be doing. “A number of areas have been identified by Goh in which the role of UNCTAD should continue, especially UNCTAD’s role for policy analysis and consensus building” he said.

He shared the view that it would indeed be ironic if UNCTAD XI were to lead to the marginalization of UNCTAD.  Instead, UNCTAD should be revitalized. “On that point we are at one with the civil society statement” he emphasized.  

The US representative welcomed the civil society’s views and look forward to civil society’s continuing participation in the UNCTAD processes. She found the presentation provocative and interesting and contained elements of agreement and disagreement.

The representative from the Least Developed Countries (LDC) Grouping associated themselves with the comments expressed by Jamaica for the G77 & China, in expressing appreciation for the statement presented by the civil society and Third World Network.  He said, “the need for appropriate development strategies is important and we appreciate especially the emphasis on development issues and poverty reduction which are of interest to the LDCs.” He hoped that there would be further interaction and co-operation between civil society and UNCTAD. He also wanted to know how civil society organization from developing countries, and the weakest region, Africa can be strengthened in their participation in the UNCTAD processes, in order to achieve a balance representation which reflects the concerns of all regions.

According to the Canadian representative, the Canadian government is considering funding representatives of civil society in the participation in the conference.  She however disagreed with the presentation made by Goh. She argued that Goh’s views “seem to be value-laded and not balanced.” The presentation is too critical of the Secretary General’s text on which governments have worked and is balanced. There are however areas in could be strengthened she admitted

On the issue of NGO participation, the Deputy Secretary General of UNCTAD, Carlos Fortin informed the delegates that there is a procedure for accreditation. According to Fortin, “if there are some practical problems, these can be dealt with. Nevertheless the procedure has basic criteria for civil society participation which can only be changed by governments.  By these criteria, civil society organizations are chosen on the basis of their international scope.  National organizations are also chosen but this is to be decided on a case by case basis.”  The Secretariat further clarified that a fast track process for accreditation for UNCTAD XI has now been established and information is currently available on the UNCTAD website.

Fortin provided further clarification on how he understood the conference sub-theme of partnership for development. “As presented in the pre conference text, it is envisaged that there are to be joint activities between UNCTAD and a range of stake-holders, apart from civil society organisations  But this refers outcomes reached after the conference, in the context of implementing an agreed work programme which will emerge from the conference,” he explained. This is different from the issue of civil society participation which deals with the content of the work programme prepared during periods before and at the conference. The way for dealing with this is provided in the annex to the pre-Conference text, Fortin pointed out. 

He also emphasized the need to include the private sector and other parties interested in UNCTAD XI including academics, parliamentarians and local governments.

The representative of China supported the statement of Jamaica, in thanking Goh and civl society. He wanted to know in the experience of the developing country civil society organizations such as TWN, what are some of the difficulties of civil society in participation in such conferences and the way they have tried to handle them.

Goh thanked the delegates for their comments and questions. In relation to issue of civil society participation, Goh highlighted the specific procedural concerns and recommendations pertaining to practical matters such as accreditation, financing, and establishing processes for greater interaction between the Bureau, UNCTAD and the delegations and civil society, listed in the civil society statement.

He also reiterated the need for the Secretariat to enhance their efforts in promoting UNCTAD XI to civil society. This could be done by making relevant documents on UNCTAD XI available well in advance. This information could be posted on the website so that NGOs not based in Geneva could facilitate their participation. The information should also be made more reader friendly. In this respect, the UN FFD and WSSD websites could serve as useful templates.

He also suggested formats used in these UN conferences such as the roundtable and the multi-stakeholder arrangements, could be explored by the prep committee for UNCTAD XI.

The Chair of the preparatory committee reiterated his support for the participation of civil society and expressed his interest in further contributions from civil society, including thought-provoking ideas.  He however reminded that UNCTAD is an inter-governmental organization and that “anything useful from civil society will be accepted, but  this does not mean everything that civil society says.”

He pointed out that “for the first time, UNCTAD has made arrangements for hearings from civil society.  The first of this will take place on 16 January 2004.  The Preparatory Committee will be happy to hear civil society views on the four subthemes of the Conference.” 

 


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