The Nation
With the failure of the WTO, the IMF, G-7 and other bodies, Unctad has an opportunity to influence the world, write Walden Bello and Nicola Bullard.
Unctad X takes place at a critical moment in the global economy. Two central institutions of the Northern-dominated system of economic global governance, the International Monetary Fund (IMF) and the World Trade Organisation (WTO), are undergoing a severe crisis of legitimacy and have, at least temporarily, lost their sense of direction.
The developing countries have the opportunity to seize the initiative, frame the terms of debate on the future of global governance, and push for the creation of institutions that will truly serve their interests.
The United Nations Conference on Trade and Development (Unctad), with its 190 member countries, can serve as the catalyst for this process.
Founded in 1964, Unctad played a decisive role in forging a common front among the developing countries to reverse the deteriorating terms of trade against their agricultural and mineral products and dismantle the tariff and non-tariff barriers to their exports to developed countries. In the past two decades, however, Unctad was systematically relegated to the sidelines of global economic governance by the United States and other northern governments.
The collapse of the Third WTO Ministerial meeting in Seattle two months ago is a window of opportunity for Unctad to reclaim a central role in setting the agreements for global trade, finance, investment and development. But Unctad must engage in analytical and institutional renewal if it is to break out of the cage that the rich countries have fashioned for it and carve out a much more powerful role in trade and development issues. Also essential is the will and the vision to accompany this process.
What Unctad should be doing, in the aftermath of Seattle, is aggressively asserting itself as a key actor in the reform of the reigning system of world economic governance. There are many areas that demand Unctad intervention, but five in particular urgently demand broad global agreements:
- There is a pressing need for such an agreement on the "Special and Differential Treatment" that must be accorded to developing countries in global trade, investment and finance. Such an agreement would specify both positive and negative measures to protect developing economies from the perils of indiscriminate liberalisation, support their efforts to develop or industrialise through the use of trade and investment policy, and secure their preferential access to Northern markets. Such an Unctad-sponsored agreement would serve as an over-arching convention that would guide the actions of the WTO, IMF, European Union and all other major international economic actors.
- Unctad must intervene in the issue of debt and move to forge a global alliance among governments and NGOs that would press for a Global Compact for the unconditional cancellation of the commercial, bilateral and multilateral debts of all developing countries.
- Unctad could also play a key role in addressing the critical nexus of trade and environment. Together with the UN Environmental Programme and UNDP, Unctad could lead in drafting an agreement specifying broad but binding guidelines and a pluralistic mechanism, involving civil society actors, that would judge on the conflicting claims of the WTO, multilateral environmental agreements, governments and NGOs.
- In light of the failure of the G-7 to seriously respond to the urgent need for a reformed global financial architecture, Unctad should seize leadership in this area and forge an agreement among its 190-members countries that would put such a system in place. This architecture could involve taxes on capital movements, regional and national capital controls and a pluralistic set of global and regional regulatory institutions.
- Unctad should also lead in forging a "New Deal" for agriculture in developing countries. The emphasis of such a convention would not be the integration of agriculture into world trade but the integration of trade into a development strategy that will put the emphasis on raising incomes and employment in the agricultural sector and achieving food security through a significant degree of food self-sufficiency.
Unctad must learn and profit from the crisis of the WTO and IMF. It is not surprising that both the WTO and IMF are currently mired in a severe crisis of legitimacy. Both are highly centralised, highly unaccountable, highly non-transparent global institutions that seek to subjugate, control or harness vast swathes of global economic, social, political and environmental processes to the needs and interests of a global minority of states, elites and transnational corporations. The centralising thrust of these institutions clash with the efforts of communities and nations to regain control of their fate and achieve a modicum of security by deconcentrating and decentralising economic and political power.
The monolithic systems of the WTO and the IMF must give way to a pluralistic global economic regime where global institutions, organisations and agreements complement as well as check each other. It is Unctad's task to play midwife to a more democratic system of global economic governance.
WALDEN BELLO is executive director of Focus on the Global South at Chulalongkorn University's Social Research Institute. Nicola Bullard is deputy director of Focus on the Global South.
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