FROM INTERACTIVITY TO THE BUSINESS OF UNCTAD

by Chakravarthi Raghavan

Bangkok, 17 Feb 2000 -- Member governments of UNCTAD got down Wednesday night to the "business" of UNCTAD-10 - negotiating and finalizing the draft Plan of Action to be adopted by the Conference before it ends Saturday.

In the week-long meetings so far, much of public attention and focus have been on the "inter-active debates" with speeches and statements from heads of specialized agencies and comments and questions from delegates - not often eliciting clear answers - and with some industrialized countries trying to use the occasion to repeat their views of what is in the interest of developing world.

And while 'inter-active debates' produce some copy for the media, particularly those who are ready to uncritically accept the claims of agency heads, it may be in danger of over-shadowing or substituting for the serious business of intergovernmental deliberations and decisions. The secretariats may partly be responsible, but more responsible are the government members themselves.

As Gunnar Myrdal, as the Executive Secretary of the UN Economic Commission for Europe pointed out long ago, the purpose of economic research and activities of inter-governmental secretariats is not an exercise in academic pursuit of knowledge, but presenting clear options that the governments can focus on and take decisions in their inter-governmental deliberations.

Unfortunately, few of the agency heads, who came and participated in four mornings of inter-active debates or even the academic economists who presented papers and participated in a panel discussion, attempted to do this. The Committee of the Whole of the Conference got down to its nitty-gritty work on Wednesday evening, and remained stuck with some ideological formulations that the industrialized countries want, to cover up their inability or unwillingness to carry out their own obligations.

While much of the text had been cleared during the pre-conference negotiating process at Geneva, a few tricky paragraphs and issues remain to be negotiated and agreed.

One such is the bundle of slogans used to blame developing countries for the failure of the liberalization and globalization policies to produce growth and development -- issues and ideas, now acknowledged as global phenomenon, that figure in the evaluation of the developmental impact of globalization.

A paragraph in the square-bracketed text on assessment says:

"Democracy, rule of law, transparent and accountable governance and administration, including combating and eliminating corruption - a global phenomenon, affecting both developed and developing countries - are indispensable foundations for the realization of people-centred sustainable development. Human rights and fundamental freedoms, with the right to development as an integral part, must be promoted and protected. Macro-economic stability has proved to be an important element for economic growth and the alleviation of poverty."

But while developing countries were willing, as a compromise, to refer to some of these in terms of assessment, and as a global phenomenon, rather than one characteristic only of developing countries, they have not been willing to make it a focus of UNCTAD's analytical work or inter-governmental activity.

They have opposed UNCTAD secretariat's already meagre resources being diverted into analytical work on institutional reforms and capacity-building "including issues such as accountable governance, exchange of experience in the fight against corruption, and the establishment of a regulatory framework favourable to the development of a market economy."

The compromise formulation, put forward in a chairman's text (Amb. Petit of France is chairing the committee of the whole) is for UNCTAD's entire analytical work to take "into account issues such as accountable governance, fighting corruption, social and environmental dimensions and the establishment of a regulatory framework favourable to the development of market economy."

There may, of course, be some useful work to be done in this area, taking some of the most publicized and recent examples such as the scandals surrounding the raising and use of election funds in such advanced market-economy countries with regulatory frameworks such as in Germany, France, UK and USA. But should the scarce resources of UNCTAD be further depleted by such work?

The drafting of a plan of action, eliminating the points of contention or finding acceptable compromises, has also involved here some shadow-boxing on the issues to be negotiated at the WTO.

These relate to or include issues such as:

* UNCTAD's role as a forum for exchange of views and perspectives on evolution and management of globalization and interdependence of trade, finance, investment and technology as they affect growth and development prospects of developing countries.

An issue is what should be UNCTAD's role over the questions about reform of international financial institutions and international financial architecture.

The square bracketed text on this, remitted in the draft plan from the preparatory process in Geneva had a formulation (in para 105):

"UNCTAD....should contribute, through its analytical capabilities, to ongoing efforts in respect of reforms of monitoring and regulatory systems and enhanced early warning and response capabilities for dealing with the emergence and spread of financial crises. UNCTAD, through its analytical work should assist developing countries in advancing their development objectives in ongoing reforms of the international financial institutions (IFIs)."

As a result of the discussions in the COW on Wednesday night, there are three different formulations, in square brackets:

1. Through its analytical work, UNCTAD... should assist developing countries in advancing their development objectives in ongoing reforms of IFIs, including the enhancing of early warning and response capabilities for dealing with the emergence and spread of financial crises.

2. Within its existing mandate and taking into account work done in other relevant organizations, UNCTAD should contribute to the debate on issues related to strengthening and reforming the international financial architecture by continuing to provide relevant analysis from a development perspective.

3. The third is the original formulation, in square brackets, that was remitted to the Conference from Geneva.

Not only has the search for new financial architecture been reduced to 'fixing the plumbing' in the house (as UNCTAD's Chief Economist Yilmaz Akyuz described it at a TWN organized forum discussion this week), but the major powers controlling and running the IMF don't want any critical look at their 'plumbing'.

* agricultural subsidies, and payment of large transfers by governments to their agricultural producers (unlike in the area of industrial sector of trade in goods where these are prohibited by WTO rules), and support for agricultural production and exports in developed countries can have significant distorting effects, particularly on developing countries. The EU and others have objections to this, and the Canadians and Argentineans (of the Cairns group) who formulated a different wording, have also been unhappy that the chair did not incorporate their formulations either.

* enhancing market access for the least developed country exports in the markets of the developed countries, through duty-free, quota-free treatment to such goods.

The industrialized countries are trying to draw red herrings by wanting to focus also on proposals for developing countries 'to contribute to improved market access', or talking about UNCTAD's work programme in terms of maximizing market access benefits for LDCs 'for example, by developed countries granting duty-free and quota-free treatment for essentially all products..."

This is really a formulation to legitimize or authorize the industrial world to 'except' the so-called sensitive products that the LDCs could export and gain added value from such exports (textiles and clothing, footwear, agricultural products etc).

Another issue is a proposal from the Latin American group about UNCTAD technical cooperation programme.

It started with a proposal from the group for a center on research and capacity building in UNCTAD, to enable officials and others from developing countries and transition economies to become better informed through training courses on key issues on international economic agenda, it has slowly been reduced to a unit in UNCTAD, and now a programme.

The irony perhaps lies in the fact that in the run-up to and at UNCTAD-VIII, the Latin American group acted to end virtually all the central economic negotiating roles of the organization.

The group had been in the forefront of the founding of UNCTAD in 1964, and its role as a central negotiating forum (the mandate drawn from UNCTAD's role as the principal organ of the UN General Assembly on Trade and Development, and the mandate at UNCTAD-V at Manila in 1979). But at the Teheran meeting of the G-77 preparatory to UNCTAD-VIII in Cartagena (Colombia), the group had insisted on the end to the group system of negotiations, and the trade and economic negotiations themselves. (SUNS4609)

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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