TWN Info Service on WTO and Trade Issues (Oct06/10)

12 October 2006

Report 9 on UNCTAD meetings

Reform process must revitalize UNCTAD

By Goh Chien Yen (TWN) Geneva, 9 Oct 2006

"UNCTAD needs to establish itself as the leader among UN agencies in identifying and analysing emerging issues ...", Ms. Faiyza Abou El Naga, the Egyptian Minister of International Cooperation, declared at the final plenary on 6 October of the high-level policy dialogue on UNCTAD's Mid-Term Review (MTR) - "UN reform, development and UNCTAD".

Other developing countries such as Pakistan, the Philippines, Indonesia and Iran that took the floor at the meeting also articulated their grand visions for UNCTAD in being the key institution and focal point within the UN system in addressing the challenges of globalization, especially in the area of trade, finance and development.

While countries expressed the need for an enhanced and revitalized role for the organization in tackling development issues, there has been palpable concern that the current UN-wide reforms and initiatives for change within UNCTAD itself could leave the organization further diminished.

As pointed out by the Ethiopian Ambassador, Mr Fisseha Yimer, in his presentation last Friday, "previous attempts to reform UNCTAD... had resulted in subsequent reduction of mandates and resources." He warned that the UN reform process should not become "an exercise to cut resources and to downsize the institution's mandate."

The Finnish trade and development minister, Ms Paula Lethomaaki, on behalf of the EU in her keynote speech on 4 October at the opening of the high-level policy dialogue of the MTR, said that "UNCTAD needs to be leaner, meaner and more profitable."

"The EU is fully committed in making UNCTAD an effective organization that would deliver for the benefit for all developing countries," an EU representative reassured members on Friday.

"I like to stress that the reform process should in no way undermine UNCTAD, rather to strengthen it," he said.

He added that "UNCTAD could execute its mission more successfully and efficiently especially in the intergovernmental pillar and... that the EU thinks that UNCTAD's work should have more impact."

Other Group B member countries like Canada and Norway that took the floor on Friday reiterated that the reform process should in no way undermine the organization.

"Reform is not to minimize UNCTAD, nor to withdraw resources. UNCTAD has a broad mandate and the developing countries need such a focal point. Therefore, UNCTAD needs to be strong on these issues," Norway affirmed.

"It is clear from what has been said that the mission and mandate of UNCTAD is not in dispute or in question. We are all committed in a stronger UNCTAD," the Philippines' delegate observed.

Among other developing countries, Pakistan, India and Indonesia joined in to express their desire to see UNCTAD strengthened.

To do so, UNCTAD should also spearhead the work on the international financial system and other financial issues related to development. In particular, UNCTAD should play a greater role in the UN financing for development process, these developing countries argued.

In the area of trade and development, where UNCTAD has played a central role within the UN system, it "has lost some [of] its relevance," Norway pointed out.

"However, we want UNCTAD to reclaim its role and be the focal point for these issues."

This was supported by the other countries.

In this respect, "UNDP and DESA should support UNCTAD by providing outlets for its work," the Philippines proposed.

There was also much enthusiasm from the member countries that UNCTAD play a central role in the Aid for Trade initiative.

Nonetheless, it was pointed out by the Ethiopian Ambassador that this is an "evolving process, and as such it is unfinished business."

"We are yet to know the magnitude and intensity of aid that will eventually be agreed upon as well as operational modalities, including its governance structure," he added.

More generally, UNCTAD should pay greater attention to "analysing the systemic issues related to the structure of international economic relations, the inter-linkages between the different elements of such relations, especially the monetary, financial and trade aspects... and provide a holistic view of the global economy, from a development perspective that focuses on amplifying the policy space necessary for developing countries to respond to its daunting challenges," the Egyptian minister said.

UNCTAD should also play a leading role in the UN's efforts aimed at improving global economic governance by enhancing the coherence of global economic processes, particularly among international monetary, financial and trading systems, Iran argued.

Envisioning an expanded role for UNCTAD's intergovernmental process beyond consensus building, the Iranian delegation proposed that this could also be used as a negotiating platform for international agreements, "drawing on its past experience such as international commodity agreements and the GSTP."

Furthermore, this intergovernmental process should also "contribute to strengthen a normative foundation for development, including the development of soft law for the guidance of international activities on trade and development... investment regulation, transfer of technology... conduct of transnational corporations and finally debt sustainability and relief," Iran suggested. This was supported by Pakistan.

Member countries also proposed several more specific suggestions targeted at strengthening UNCTAD's three functional pillars of consensus building, research and analytical work and technical assistance at the meeting.

Pakistan, in particular, presented its written proposal entitled "Elements for the Revitalisation of UNCTAD" of 15 recommendations. The proposal was formally submitted to the UNCTAD secretariat.

Many of the countries that spoke alluded positively to the recommendations made in the "Report of the Panel of Eminent Persons" as an important input in this reform process. (See SUNS #6052 dated 22 June 2006.)

Pakistan said that the South Centre's work on strengthening UNCTAD is another valuable contribution that should be seriously considered.

UNCTAD Secretary-General, Dr Supachai Panitchpakdi, ended the meeting by appealing to member countries to make explicit what they have said they want UNCTAD to do and the role it should play with the other UN agencies working on development issues, in particular the Department for Economic and Social Affairs (DESA) and UNDP.