The Battle for UNCTAD’s future mandate

Martin Khor

18/04/2012

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On the eve of UNCTAD’s thirteenth session, the Ministerial conference known as UNCTAD XIII, a major battle is under way to preserve UNCTAD’s mandate to work on key areas, especially macro-economic and finance issues.

A serious impasse emerged in the preparatory committee of UNCTAD XIII, which is tasked with preparing the draft outcome document that Ministers are scheduled to adopt at the end of UNCTAD XIII in Doha on 21-26 April.

While the previous two or three conferences were rather tame affairs, it looks like UNCTAD XIII (whose general theme is development-centred globalization) will be more difficult, with the organisation’s future scope of work and influence at stake.

UNCTAD was set up in 1964 to support developing countries to strengthen their weak position in international economic structures, and to design national development strategies.

It became a kind of secretariat on behalf of developing countries, providing a small pro-development balance to the huge organisations dominated by the developed countries, such as the OECD, the 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. The inter-governmental discussions became less significant, while UNCTAD’s pro-development mission was increasingly challenged by the developed countries.

This unhealthy trend seemed to have subsided in the past decade, but in the past two months during the meetings in Geneva to prepare for UNCTAD XIII, some developed countries have reportedly attempted to dilute the areas of future work of UNCTAD, to the frustration of the G77 and China.

The meetings on 10-13 April of the preparatory committee ended in a near crisis, with the countries unable to agree on how to proceed with some key issues and with a draft of the outcome document.

At the committee’s meeting on 13 April, a major dispute arose over whether the Doha outcome should “reaffirm” the mandate given to UNCTAD at the previous session (UNCTAD XII held in Accra in 2008, which adopted the Accra Accord). The G77 and China proposed reaffirming the Accra Accord, and normally this would have been accepted as a matter of routine.

However, a group of developed countries opposed the term “reaffirm”. Instead, they wanted language to “build on” the Accra accord.

This caused frustration to the members of the G77 and China, which saw the move as an attempt to take away some of the issues that UNCTAD is working on. Refusal to reaffirm the Accra accord seemed to be another measure to chip away at the influence of UNCTAD and its support for development.

The G77 and China are insisting that UNCTAD XIII should reaffirm the Accra Accord.

Speaking on behalf of the G77 and China, Ambassador Pisanu Chanvitan of Thailand regretted that the accommodative stance of the group had been viewed as weakness or capitulation.

The group has hoped that the global economic and financial crisis marks for once and for all the end of the bad old days, and perhaps the dawn of a new international regime of global economic governance. “Instead, we see behaviour that seems to indicate a desire for the dawn of a new neo-colonialism. We cannot, we will not, accept this.”

While UNCTAD XIII can contribute to a new beginning, unfortunately, the developing countries feel increasingly marginalized by their partners especially when they seem to deny them their own priorities.

The Thai Ambassador stressed that the Accra Accord must be reaffirmed. And while the G77 and China had already made “incredible compromises”, it now proposed that at the minimum the Doha conference could adopt the compromise text that the President of the Trade and Development Board, Ambassador Mothae Maruping of Lesotho, had issued in the first week of April. This was a 22-page President’s text that had drawn from a thick compilation document containing proposed language from all members.

The G77 and China said its development partners (referring to developed countries) may mistakenly think that the question is whether there will be an outcome document, and added that: “Let us assure our partners that there will be an outcome document”, but the question is whether there will be a consensus document.

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.”

The impasse, so close to the start of UNCTAD XIII, has given rise to discussions on whether the Doha conference will result in a consensus-based outcome, or whether the developing countries would resort to proposing a vote on a document it puts forward. A vote on a G77 and China document is considered a last resort, since the normal procedure is to adopt a consensus document.

It would appear that whether the Doha outcome will reaffirm the Accra Accord has become the most important political issue at this point of the negotiations. It is understood that there is widespread agreement that the outcome document will be based on negotiations on the President’s text. The G77 and China are however adamant that this text, which they consider already too much watered down from the group’s own proposed text, should not be diluted further.

The negotiations will resume in Doha in a Committee of the Whole, to produce the UNCTAD XIII outcome document.

The battle in the UNCTAD process is being monitored with a sense of serious concern. An influential group of 50 former senior UNCTAD staff issued a joint statement criticizing efforts by major developed countries to reduce UNCTAD’s mandate and deny it the right to continue to analyse global macroeconomic issues from a development perspective. (See separate article on the statement.)

The signatories included former UNCTAD Secretary-General Rubens Ricupero, two former deputy Secretaries-General, Carlos Fortin and Jan Pronk, and several Directors.

At a press conference on the statement, as reported in the SUNS Bulletin, former UNCTAD Director John Burley, warned of an attempt "to change UNCTAD's mandate by denying the organisation the right to continue to analyse and report on global macroeconomic issues, including the role of global finance in development."

"We are angry because we feel that the two principles of the need for a plurality of views in the international system and the need to preserve UNCTAD's freedom of speech, are being threatened.”

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."

Akyuz said that UNCTAD has always taken interest in policy with significant effect on development and developing countries. "It has done so by taking a broad perspective, focusing on interdependence of issues, and in several areas, UNCTAD has been well ahead of the curve in anticipating problems and proposing feasible solutions."

He gave several examples of UNCTAD being the first organisation to make proposals that later became mainstream or official, such as the need for debt relief in Latin America in the 1980s, the need for the relief of debt of poor countries to the Bretton Woods Institutions in the early 1990s, the proposal for orderly workout mechanisms for sovereign debt, and 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.

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.

They stressed that developing countries in Geneva are struggling to resist the strong pressure piled on them by OECD countries and to defend the organisation. The developed countries in Geneva have seized the occasion to stifle UNCTAD's capacity to think outside the box.

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

Source: South Bulletin 61http://www.southcentre.org/

https://www.alainet.org/es/node/157304