UNCTAD’s future mandate on the line at UNCTAD XIII

Martin Khor

On 21 April, the UNCTAD ministerial conference known as UNCTAD XIII begins in Doha.   It is shaping up as an important milestone to reaffirm – or not – the mandate given to UNCTAD to work on key global economic issues, including finance and macro-economic policy.

In fact, UNCTAD enjoys that mandate already, given its role in the UN system to organize an integrated perspective on trade, finance and economic issues.

However, some developed countries have attempted to dilute the specific issues that the UNCTAD secretariat has highlighted in recent years, especially in the wake of the global financial and economic crisis.

A draft outcome document prepared in Geneva by delegates is being transferred for continued negotiation in Doha with the hope that a consensus can be reached by 26 April, when UNCTAD XIII ends.

A major contentious point is whether UNCTAD XIII reaffirms the Accra Accord, adopted at UNCTAD XII in Accra in 2008.  The Accord gave UNCTAD a mandate to work on a broad range of issues.

UNCTAD was set up in 1964 s to support developing countries to strengthen their weak position in international economic structures. It became a kind of secretariat on behalf of developing countries, providing a small pro-development balance to the Western-dominated OECD, IMF and World Bank.

In the past two decades, however, the developed countries have tried to curb the pro-South orientation of the UNCTAD secretariat and its many reports.

At a 13 April meeting, some developed countries did not even agree to “reaffirm” the Accra Accord.  The developing countries saw this as an attempt to take away some of the issues that UNCTAD is working on and thus chip away at UNCTAD’s support for development.

Speaking on behalf of the G77 and China, Ambassador Pisanu Chanvitan of Thailand said the global economic and financial crisis should have marked the end of the bad old days, and the dawn of global economic governance based on the highest UN principles.

“Instead, we see behaviour that seems to indicate a desire for the dawn of a new neocolonialism. We cannot, we will not, accept this.”

The G77 stated that the Accra Accord must be reaffirmed and as a minimum the compromise text of the President of the preparatory committee (Ambassador Maruping of Lesotho) should be adopted.

In response, a group of developed countries regretted that they were being painted as being on the “bad side” and asked that their proposals be not  “engineered always as a weapon in a North-South conflict.”

Meanwhile, an influential group of 50 former senior UNCTAD staff issued a joint statement criticizing efforts by major developed countries to reduce UNCTAD’s mandate. The signatories included former UNCTAD Secretary-General Rubens Ricupero, two former deputy Secretaries-General, Carlos Fortin and Jan Pronk, and many Directors.

At a press conference, former UNCTAD Director John Burley, warned of an attempt “to change UNCTAD’s mandate by denying the organisation the right to continue to analyse global macroeconomic issues, including the role of global finance in development.”

Yilmaz Akyuz, former UNCTAD chief economist, said that since the collapse of the Berlin Wall, the major developed countries “have become increasingly intolerant to diversity of views and indeed wanted the Washington Consensus to become a global consensus. They have seldom engaged in constructive dialogue in UNCTAD over policy options and ignored UNCTAD research findings even when they are proven right.”

Saying that UNCTAD has been well ahead of the curve in anticipating problems and proposing feasible solutions, he gave these examples:

  • UNCTAD was the first organisation in the 1980s to argue for the need for debt relief in Latin America, several years before it became part of the official wisdom to the Brady Plan.
  • It was the first one to argue in the early 1990s for the need for the relief of debt of poor countries to the Bretton Woods Institutions, something which was taboo at the time but then it came to be accepted by the mainstream in the HIPC (Heavily Indebted Poor Countries) initiative.
  • UNCTAD was also the first to argue for orderly workout mechanisms for sovereign debt, more than a decade before it came to be put on the agenda of the IMF.
  • UNCTAD has been well ahead of the curve in predicting and analysing financial crises in emerging economies and recognising the need for reform of the international financial architecture and to manage international capital flows.

“Now the major OECD governments are trying to silence the Secretariat once-and-for-all at a time when we need a broad-based, participatory debate on the governance of international finance or even the governance of global economic system of the kind that the UN system allows is desperately needed. This will not do any good to anybody,” said Akyuz.

In their statement, the former UNCTAD staff members said that 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.”

The former UNCTAD staff depicted the developed countries’ move as “if you cannot kill the message, at least kill the messenger.”

These developments at the UN’s premier development institution are disturbing, to say the least.  It is hoped that the developing countries can strongly defend the organisation that has supported their development efforts through many decades, and that the developed countries can allow UNCTAD to continue and expand its work for the benefit of the international system as a time of global crisis.

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