Mar 10, 1993




Geneva March 8 (Chakravarthi Raghavan) -- As part of the restructuring of the United Nations secretariat and its economic and social sectors, UN Secretary-General Boutros Boutros-Ghali has announced a restructuring of the UNCTAD secretariat which would result in transfer of divisions and activities, now at New York, dealing with transnational corporations and science and technology.

This would result in a redeployment to UNCTAD of a total of 57 posts from the Department of Economic and Social Development (created in February 1992, but now split into three divisions at the UN headquarters). In the main the UN posts and work related to the former UN Centre on Transnational Corporations which was merged into the DESD as a unit.

The Secretary-General's decisions and a report on this that he has presented to the UN General Assembly's Fifth (Budget Committee) was made available here last week at the time of the Executive Session of the UNCTAD's Trade and Development Board.

In related actions, the UNCTAD secretariat cross-sectoral work on sustainable development would be transferred to New York to the new Department of Policy Coordination and Sustainable Development. The UNCTAD secretariat work relating to some poverty alleviation programmes are also expected to be transferred at some point to New York.

The post of one UN Assistant Secretary-General (held by the UNCTAD Deputy Secretary-General) is also being earmarked for abolition, but is being temporarily retained -- presumably until the present incumbent demits his post.

The legislative activities and intergovernmental bodies for all these matters though are governed by UN General Assembly resolutions and those of the Conferences of the UNCTAD, including its most recent Eighth session at Cartegena de Indies. It is not clear whether there will be corresponding actions on the intergovernmental front and/or whether the Assembly might take a different view.

In his report to the fifth committee, presenting revisions to the programme budget for the biennium 1992-1993 and the second phase of restructuring of the UN secretariat initiated by him, Boutros- Ghali has noted that over the last two decades, the configuration of the world economy had been altered by structural changes owing much of its origin to technological progress.

Technological innovation, triggered by the deregulation trends of the 1970s, had facilitated the emergence of a huge global market for funds and financial instruments, the Boutros-Ghali report notes.

Largely because of advances in information technologies, the 1980s had witnessed another wave of international linkage, dominated by flows of investment and technology through TNCs and by increased transnational corporate and research networking.

One result of this globalization process has been for a growing share of international trade now taking place within corporations and related firms, the UN Secretary-General notes.

Another is that corporate decisions on sourcing, production and marketing are increasingly taken within a global frame of reference, and frequently in the context of strategic alliances for purpose of sharing risks as well as costs of research and development and other innovational activities.

The inter-play between trade, investment, technology and services as well as their financial underpinning has accordingly increased in density and has given additional impulse to the growth of inter-dependence.

These linkages have been recognized in a variety of policy initiatives, both nationally and internationally.

At the international level, an important one was the decision to include in the Uruguay Round of negotiations issues related to foreign investment and technology as well as services which Boutros-Ghali adds "is regarded as a single undertaking", the report adds.

(This view that the entire negotiations including on technology and services are a "single undertaking" however is contrary to the actual wording of the Punta del Este Declaration and the Mid- Term review accord 1989, but in line with the views of the United States, European Community and Japan who have been trying to force on developing countries an "all or nothing approach".)

(In terms of the Punta del Este declaration which launched the Uruguay Round, the negotiations on trade in goods and trade in services were separate decisions, taken separately, and kept separate till the conclusion of their respective results. While the term 'single undertaking' for the Uruguay Round had been used in political terms fairly frequently, in actual legal fact (of intergovernmental authority), the institutional implementation of the results of negotiations on trade in goods including trade- related investment questions, trade related intellectual property rights, and trade in services, were left as political questions to be decided by Ministers meeting (as at Punta del Este) on the occasion of a Special Session of the CONTRACTING PARTIES (to the General Agreement on Tariffs and Trade).)

Boutros-Ghali notes that in these and other areas covered by the Round, UNCTAD has made a "constructive contribution" to convergence of perceptions and consensus-building. Regional arrangements such as NAFTA (embracing US, Canada and Mexico which has been signed but yet to be ratified) and the Enterprise for the Americas Initiative (the Bush initiative) adopted a similar approach, as have certain bilateral arrangements.

"These developments," he adds, "highlight the importance of harmonizing trade policies with those relating to investment and technology and of dealing with them within international forums in a holistic, rather than fragmented manner."

The interdependence of these issues-areas, the report adds, has also been acknowledged in recent discussions in the UN General Assembly's Second Committee and the high-level segment of ECOSOC as well as in the World Bank and the IMF.

In the Secretary-General's report to the 45th session of the UN General Assembly (1990) the closest possible programme integration amongst the secretariats of the CTC, UNCTAD and the Centre for Science and Technology for Development (CSTD) had been proposed.

At UNCTAD-VIII, Boutros-Ghali notes, the Conference had agreed that UNCTAD provided the most appropriate focal point within the UN for the "integrated treatment of development and inter-related issues in key areas including trade, finance, investment, services and technology".

In the light of these, the report adds, the Secretary-General has concluded that the current dispersion of the UN activities in closely inter-related areas of trade, finance, investment, technology and services "inevitably dilute" the impact of those activities and their full integration would create synergies beneficial to the objectives of the inter-governmental bodies concerned.

The report notes that in recent years, the research and analytical activities regarding TNCs at UN headquarters had given greater emphasis on how to enhance contribution of TNCs to development; strengthening of cooperation between them and host developing countries; facilitating flows of foreign direct investment; and exploring linkages between capital flows, technology cooperation and trade in services.

This has increased common elements between these activities and those of UNCTAD in support of work of the Trade and Development Board and its subsidiary bodies (particularly the Ad Hoc Working Groups on Investment and Technology Transfer, on Investment and Financial Flows, and on Expansion of Trading opportunities for Developing Countries, as well as the Intergovernmental Group of Experts on Restrictive Business Practices).

"The consolidation of these common activities in UNCTAD," Boutros-Ghali adds, "will eliminate this overlap and crate a broader base for enhancing the quality of substantive support provided to the Commission on Transnational Corporation and the Commission on Science and Technology for Development, as well as the UNCTAD Trade and Development Board and its concerned subsidiary bodies".

In giving effect to the consolidation, the S.G. has taken into account requirements of the Department of Economic and Social Information and Policy Analysis, the Department for Policy Coordination and Sustainable Development (in coordinating substantive inputs for the Commissions on TNCs and Science and Technology for Development, and substantive support on technology related issues to the CSD), and the Department for Development Support and Management Services.

Since many of the elements of these activities are now located at the UN headquarters in the divisions within the DESD (which has now been split into three), some of the relevant capacities would be retained in New York, the report says.

"The over-riding concern of the Secretary-General," the report adds, "however is to maintain and enhance existing critical mass of capacities without fragmentation. Moreover, he will ensure that within UNCTAD, this critical mass is placed in an institutional context where these activities are given the necessary prominent and visibility, but where at the same time the inter-linkages...are fully reflected in the substantive support provided to the relevant intergovernmental bodies."

In view of the role of UNCTAD as a focal point in the economic and social sectors for the integrated treatment of development and inter-related issues in areas of trade, finance, investment, services and technology, Boutros-Ghali adds in his report, the relevant aspects of the programmes and activities involving TNCs and Science and Technology (now carried out in section 39 of the UN Programme budget) would be transferred to UNCTAD (Section 15 of the programme budget).

This would result in transfer to UNCTAD of a total of 57 posts (including 3 D-1 posts and 28 professional posts and 16 general service) assigned to activities of TNCs and 10 posts (one D-1, five professional posts and four general services posts) assigned to science and technology for development. These transfer of staff posts would include those which would remain located in joints units on TNCs located in regional commissions.

In addition to the regular budget resources attached to these posts that would now be transferred to the UNCTAD budget, the Boutros-Ghali proposals would also allow UNCTAD to have access to the extra-budgetary resources attached to the activities transferred.

The UNCTAD secretariat would continue to be responsible for implementation of the work programmes under section 15 of the programme budget for 1992-1993 and programmes 13, 14 and 15 of the revised medium-term plan (1992-1997). The secretariat would also implement relevant portions of programme of activities relating to the Centre for Science and Technology for Development and the UNCTC (17 and 20 of the 1992-1993 budget), and implementation of the relevant parts of programmes for Science and Technology for Sustainable Development (17 and 23 of the revised medium term plan).