12:18 AM Apr 11, 1996


Geneva 9 Apr (Chakravarthi Raghavan) -- When developing country ministers and senior officials gather at Midrand, South Africa, later this month, for the ninth session of the UN Conference on Trade and Development, they will have a major battle on their hands to 'save the soul' of UNCTAD -- its ability to function, with essential organs and limbs unimpaired, and focus on the development problematic of the world.

After 3-4 weeks of consultations and negotiations, a heavily square-bracketed pre-conference text, has emerged from a Committee of the Whole of the Trade and Development Board, and has been remitted by the Board for the consideration of the Conference, where it is to be further negotiated and adopted.

In terms of length, the text at 57 pages is an 'improvement' over the 79-page text that was tackled in two drafting groups of the COW and pared down to 57 pages, but still bristles with brackets and square brackets. A first draft for the final outcome, prepared by the secretariat, was found fault with by most delegations and regional groups. A second draft was then prepared, by a different team of officials, and to which delegations and regional groups proposed amendments which was then remitted to the drafting groups.

When the pre-conference text was remitted to the Conference by the Trade and Development on 29 March, delegations who spoke at the final plenary said that lack of time had prevented a cleaner text from emerging.

However, a perusal of the text suggests that the differences reflected in square brackets -- whether for elimination of some parts of the text, alternate formulations for others or for new texts -- are fundamental differences going to the heart of the issues of Development.

The text begins with talk of ideological differences in the world having been largely overcome (a reference to the end of the East-West divisions following the collapse of the Berlin Wall and of the centrally planned economies of Europe) and convergence of countries around market-oriented economics.

While the market-oriented economics that everyone professes to have embraced has not in fact removed the accentuated South-North divisions, developing countries by and large seem to fight shy of recognising this reality of a South-North divide which is greater than divisions within the South.

It is a reality that goes to the heart of the matter:

Can the people of the developing world aspire to see an end to their grinding poverty, and the growing inequalities among nations and within nations, and have development as each society wishes to define it for itself or would they, in the name of the 'market' and 'globalization' and 'integration' be put into strait-jacket for the continued benefits and prosperity of a small minority of the world?

Both in the North and the South, there are now growing movements, questioning and challenging the current (neo-liberal) models of "Globalization" and transnational corporate-led "integration" of individual countries into a "global economy".

In fact there is now a wealth of economic writing coming out of academia that challenge and question this idea that the world is moving towards an 'integrated global economy', and see the reality as no different from earlier, 19th century attempts, of 'integration' under laissez faire economics.

But the formulations by governments in the document do not seem to reflect these doubts and challenges.

There is an acceptance of the inevitability of "globalization" and the helplessness of governments to change its quality or pace -- a view that was fashionable during the height of the 'Washington Consensus'. That consensus was not a genuine global consensus, but one evolved among the Bretton Woods Institutions, the US administration and the US Congress, and the think-tanks around the US capital that have an incestuous intellectual relationships to each other but are insular to outside views and criticisms.

But that consensus, and the enforced economic liberalism through trade rules and conditional finance (structural adjustment programs) that had preceded this and gained ground within the World Bank in the post-McNamara era when its economic research was hijacked by 'liberal' trade policy economists, sought to bring about a neo-liberal order in a throw-back to the 19th century.

This consensus in fact collapsed after the Mexican peso crisis, and has now come under challenge within the political processes of the North, and even at the hands of some conservative writers and columnists of the pro-business media.

None of these are reflected in the square bracket formulations that have been put into the pre-negotiating text, whether on behalf of the United States or the European Union, and even some of the developing countries, whose regional groups, and individual countries, have been functioning at sixes and sevens with each other in many areas.

The differences over 'economic theology' would not matter, if the future policy and work programme were to be approached on a 'pragmatic' basis. But when the theology is sought to be stamped on future programmes, the failure to address it affects future orientations and practical intergovernmental work too.

The US, EU message through the document is that globalization is not only inevitable but that it is 'good' and will take developing countries to an El Dorado, and that the negative or ill-effects, such as marginalisation of countries and peoples in every society, has nothing to do with the 'rules of the game' fashioned and implemented to promote this 'globalization' -- the dismantling of the powers of governments and the empowering of big corporations, in the name of a 'market' that is as imperfect now as ever before.

Rather the marginalisation of countries and large segments within countries is seen as due to their being outside the 'globalization' process.

Even more, this not being part of the process, or inability to join and compete, and thus being left behind, is the fault of the marginalised -- much as the poor are to be blamed for their poverty.

Hence, the emphasis (in the US and EU formulations for the final document) at the international level to change UNCTAD focus and orient it to 'national policies' of developing countries and how they could 'adjust' and 'adapt' to the globalization to escape marginalisation -- not whether there are international policies that inevitably create this marginalisation and whether these might need to be modified and actions taken by the international community and multilateral organizations towards this end.

In this perspective, as far as the US and EU are concerned, UNCTAD discussions and work in the future, should not be on the merits of globalization, or the desirable choices and directions of this process, where such choices can be made, but in advising the developing countries on how to 'adjust' and join this process.

Third world diplomats who participated in the discussions in the executive sessions of the Trade and Development Board, and in two drafting groups, said that among the countries of the North, the United States was appearing to take the hardest line, and some of the square brackets emplaced by the US around compromise formulations that others might accept, could prove to be the most difficult to remove at Midrand.

In fact the US negotiators even sought to put square brackets around the title of the document: "Promoting Growth and Sustainable Development in a Globalizing and Liberalizing World Economy".

And when it was pointed out that this wording was the text of the theme of the Conference that had been agreed to by consensus, and with US participation and approval, the US negotiators held up the process (resulting in one of the unusual night meetings these days) while they rang up Washington to get clearance from there!

But the US objective goes beyond the semantics of the title, and appears to be seeking to constrain some of the development choices still available to developing countries by talking of "multilateral frameworks which bring developing economies into the global economy, and which conserve global resources."

Instead of a 'sustainable development' that might involve reducing consumption in the North, the stress is on developing countries adopting policies and actions whereby they would 'conserve' the global resources - such as less energy consumption.

And instead of national and international policies that would be brought to bear equitably, with the burden of adjustment to fall on those whose profligate ways has been responsible, the challenge is posed in terms of helping position nations and their peoples "to adjust" to this change, and actively benefit from, and contribute to, the new opportunities.

Some aspects of these are reflected in other fora too where the intentions of the Rio Summit, the Climate Change and bio-diversity Convention are being put on their head in order to shift the 'burden of adjustment' in these areas on to the developing world. It is also reflected at the WTO, where the US and EU, for example, are trying to use 'environment' and 'social conditions' as a way to curtail market access into their markets, ensure freedom of investment in other markets to enable their corporations against domestic enterprises there.

The negotiators, policy-makers and even some international civil servants in organizations controlled by them all along protest they are not protectionist, but aiming to protect the environment and human rights for the good of the world.

The US thus is against UNCTAD looking at the range of questions under Trade and Environment or Environment and Sustainable Development and the policy options before the international community or the multilateral framework of rules that would be needed for this.

During the preparatory process, and inside UNCTAD, as outside, there has been considerable talk from the US, EU etc about need to avoid duplication. But this appears only to mean that UNCTAD should not undertake work that other organizations -- which are more firmly controlled by the North and further its interests (the WTO or the Bretton Woods Institutions) could or would do in the future?

But the same logic does not seem to apply when it comes to bringing in every conceivable context, formulations about 'human rights' and 'good governance' in the South.

The United States and, though not so vocally, the EU too, do not favour UNCTAD, whether the secretariat or intergovernmental machinery, to consider and explore some of the new multilateral negotiating agenda on trade that is being promoted by them.

Even the formulations about UNCTAD contribution to the Singapore Ministerial meeting, and looking beyond that to the new trade agenda, though mandated by the UN General Assembly last December, has been put under square brackets -- with the US particularly challenging such a role.

If the US, and the EU, have their way, UNCTAD would be converted mainly into an institution for the least developed countries (LDCs) and, even for them, merely to provide technical assistance to join the "globalization process", and not raise issues about basic wisdom of the 'rules of the game' that are dismantling the power of the nation states within their countries and globally or put forward views on need to change the rules.

In the trade section of the pre-negotiating text, and in discussions on it, there were battles-royal on whether the outcome of the Uruguay Round negotiations have had some negative effects for the developing countries -- though the Marrakesh Ministerial meeting itself has acknowledged this possibility by calling for 'actions' deal with the problems of LDCs and net food-importing countries etc.

In fairness, the opposition to any view about the negative effects of the Uruguay Round, and further analysis of this issue and exploring solutions, came not only from the industrialized world, but even from among the developing world. Some countries of Latin America, who have benefited from the agriculture agreement, like the EU and US wanted UNCTAD to focus on positive elements and how developing countries could take advantage, and not the negative aspects of the Uruguay Round.

At one point in these closed meetings, one of the participants said, the exchanges between Bangladesh as the Asian group spokesman on trade and Argentina were more vehement than any with the US or EU.

To some extent Argentina's position is understandable, others noted. About 90% of its exports are in agriculture sector where the new agriculture disciplines has provided Argentina and some of the Southern hemisphere temperate zone producers some market opening benefits.

But what the Asians, Africans and others have been seeking is 'objective analysis' by UNCTAD to identify gains and losses of the Uruguay Round -- whether short-, medium or long-term -- and suggest remedies, whether through financial assistance or through trade rules, on how the losers could be compensated.

At the Teheran Ministerial meeting of the Group of 77 in 1991, preparatory to UNCTAD-VIII, at the insistence of some Latin American countries, the practice of coordination and group negotiations by the G77 was given up, and formalised at UNCTAD-VIII in the Cartagena consensus of 'partnership for development'.

The argument was that 'group negotiations' created confrontations and, if developing countries give up this effort to collective leverage, there could be a genuine dialogue and partnership and a consensus would evolve.

The Asian and African groups at Teheran, and subsequently at Cartagena, partially and reluctantly yielded to the Latin American and Caribbean group (GRULAC). In the work of UNCTAD since then, while discussing issues, the Asian and African regional groups continued to function as groups and, occasionally there were efforts at coordination with the GRULAC, though the Grulac nations have not entirely abandoned their regional efforts at consultations and coordination, doing it through the SELA and its secretariat. Only coordination and concertation within the South has been given up.

Even in the old GATT and now the WTO, GRULAC meets to try and evolve a joint position, but the informal group of developing countries meets, if at all. After 1991, it has been meeting mostly to hear the Director-General, and most recently, at very short notice, to hear the OECD and its plans for an investment agreement.

Has the abandoning of group negotiations benefited the South as a whole, or any of the regions or sub-groups among developing countries?

In the preparatory process to UNCTAD-IX, there has been little effort at coordination on substance among the developing country regional groups, though a preparatory committee of the G77 at Geneva had done some work and prepared a document.

The three regional groups of Asian, African and Latin American and Caribbean developing economies held their separate meetings -- with the Latin American group though not taking a position on 'substantive' questions, reflecting differences in the region.

No Ministerial meeting of the Group of 77 was held, but one is scheduled for 28 April during UNCTAD-IX at Midrand, with a 'round-table' of G77 Ministers.

And while frowning upon developing countries joining together, the OECD countries, while not formally meeting in Geneva to consult and coordinate, have been doing so through meetings and processes elsewhere -- through the periodic Quad meetings (of Canada, the EU, Japan and the US), within the OECD, and the G-7.

Both at Teheran G77 and subsequent NAM summits at Jakarta and Cartagena, while OECD countries have been present as invited 'observers', the OECD has not reciprocated this either!

The lack of coordination among developing countries and the concertation of the North visavis the South has been reflected within UNCTAD in the pre-conference preparatory process -- with Asians, Africans and Latin Americans in effect fighting for a bigger share in a shrinking pie.

Seeing its practical effects, some within the Latin American group, at the end of the pre-negotiating process, expressed to their colleagues in Asia and Africa, the need for restoring some coordinating process.

But the tasks before developing countries, both to restore unity and regenerate UNCTAD are very difficult.

The US and a few others, who sought to wind up UNCTAD last year, yielded ground when they came up against the unified opposition of the developing countries. But they are now trying to emasculate UNCTAD through the future work programmes and the budget cuts.

The developing countries cannot easily hope to 'confront' and get their way through at Midrand.

Any deadlock or serious reverse would be used by the US at the subsequent G-7 meeting (where UN Secretary-General Boutros Boutros-Ghali, who is seeking a second term, is expected to be around to present his views) to get back on its hobby-horse.

The G77 therefore have to strive to achieve a consensus, that would preserve the institution and also their ability to use its intergovernmental process to seriously discuss and engage their partners in the North in a dialogue, and ensure that the UNCTAD Secretary-General Rubens Ricupero and the secretariat is able to undertake and present objective analysis and recommendations.

The founding of UNCTAD in 1964 at the instance of the developing world also saw the formation of the Group of 77, uniting the previously separate Afro-Asian Group and the Latin American group at the United Nations.

It was the Argentinean economist Raul Prebisch, Secretary-General of the Conference, who, at that time, convinced the Latin Americans that the three regions had more in common than their differences, and that the Latins by combining with the Afro-Asians had more to gain than lose.

Whether UNCTAD-IX would catalyse emergence of a strengthened Group of 77 -- whose need was evocated by UNCTAD Secretary-General Rubens Ricupero on 3 April in his address to the meeting of the chapters of the G-77 in Geneva -- remains to be seen.

The US visavis UNCTAD, is coming up with a radical surgery solution -- it is difficult to know from its formulations whether it is seeking a lobotomy of UNCTAD to deprive it of the inability to 'think alternatives' or an organ transplant to promote the IMF-World Bank-WTO and OECD solutions on the developing world.

Some of the remedies coming from the US and EU -- about technical assistance, exchange of national experiences, promoting FDI liberalisation in the Third World to promote TNC-led integration of economies, or for improving 'efficiency', and policy formulations to further these -- rather than promoting a discourse for pragmatic policies and measures -- could prove to be a mix of contradictory elements, in content and outcomes, and may even result in UNCTAD losing its main constituency - the developing nations and the development NGOs in the North and South.

The 'new feed' for UNCTAD -- future orientations, priorities and work programme, with donor-driven technical assistance programmes trying to shape the substantive policy programmes and studies -- and the UN system-wide use of budget cuts to curb intellectual independence, could be like the animal feed from rendering plants, and result in a 'new disease' of the multilateral system that too would jump the 'species barrier', and spread from universal, transparent and democratic institutions like UNCTAD and UN to the non-transparent and non-democratic WTO and the BWIs.