UNCTAD-VII: COOPERATION OR CONFRONTATION?

Jul 4, 1987

UNCTAD-VII: COOPERATION OR CONFRONTATION?

AN IFDA SPECIAL FEATURES.

GENEVA, JULY 2 (IFDA), BY CHAKRAVARTHI RAGHAVAN – Twenty-three years after the founding meeting, and for the second time in its history, delegates from four corners of the world will begin arriving in Geneva next week for a session of the UN Conference on Trade and Development, the seventh.

UNCTAD-I, which met from march 23 to June 16, 1964, was not an easy Conference, but resulted in what subsequently became known as the development consensus, and the birth of the Group of 77 at the end of the session – when Africa, Asia and Latin America saw that despite all their differences, there was more that united them than divided them, and only through this unity they could bargain with the north.

But one thing was clear in 1964: the U.S. and other western industrialised countries were committed to their charter obligations and objectives in the economic and social sector, to the post-war goals of full employment in their countries, and to their responsibility to promote development in the third world.

Green with the memory of the disastrous experiences of resort to bilateralism in international economic relations and in the inter-war years, the industrialised countries were agreed on the primacy of multilateralism as an instrument to promote development.

Many things have changed since then for the third world, and among the things for the worse is the overall prospect for development, and the capacity of governments of these countries to deliver on their promises of a better life for their peoples after independence.

If some of them still talk of these promises, they and their peoples now know that the delivery dates are will into the next century, a time-span too long for survival of their economic and social systems or even the polity of these countries.

And the facts of interdependence of economies and issues will ensure that collapse in the south, will increase the economic costs for the north, and also jeopardise peace and security in the world.

Just four years ago, at Belgrade UNCTAD-VI, east, west and south were all agreed of the "pervasive crisis" in the world economy, and agreed on many of the symptoms of the crisis and its impacts, including on the multilateral system.

In the Belgrade statement, adopted by consensus with the U.S. disassociating itself only afterwards, the Conference declared: "the threat that the present crisis poses to the stability of developed and developing countries alike makes it necessary, therefore, for the international community to launch a programme and for accelerated growth and development on a sustained basis in developing countries, as well as for strengthening international economic cooperation.

"The reactivation of the growth process in the developing countries will not come about merely as the trickle-down effect of growth in developed countries. What is needed is an integrated set of policies, encompassing short-term measures in areas of critical importance to developing countries and long-term changes relevant to the attainment of a new international economic order".

The measures agreed to at Belgrade added up to little, but at least there was agreement on some of the basic premises for development.

When the Conference assembles here on the afternoon of July 9, delegates would find that Belgrade and Geneva are not so near in time (four years) or distance (1.200 kms.).

Not only has development yielded place to adjustment, but trickle-down theories are once again aggressively propagated by the centres and the organisations they control. UNCTAD, UN and others seeking to advocate a different view have to choose their language so carefully that it is lost on the average reader.

The preparations form, and the construction of an agenda for UNCTAD-VII, itself proved difficult, and the final outcome represents considerable compromises on the part of the group of seventy-seven.

The OECD group started with a demand for a "value-loaded agenda" – an agenda so worded as to determine the final outcome itself. They also wanted to eschew a number of items that normally figured on the UNCTAD agenda.

After considerable back and forth, the third world group agreed to a formulation that did not prejudge the outcome, but would enable the OECD countries to talk on some of their pet ideological hang-ups, and which has forced the secretariat too to address some of these issues – role of the private sector in the third world, and an assessment of domestic policies in their impact on development and the international environment supportive of development.

The Group of 77 also agreed to a selective agenda, and only four areas are listed – resources for development (including debt), commodities, trade, and least developed countries.

In a final compromise they also agreed to the final outcome of the Conference to be in a single document, and to undertake before the Conference an informal process for an assessment of "relevant economic trends and of global structural change".

In the four years since Belgrade, despite the better economic performance in a few countries, neither they nor the countries of the third world as a whole have advanced in their efforts to eradicate poverty or improve the standards of living of their peoples.

Very large numbers of them have fallen back, and even in those that have performed well, and even in those that have performed well, the poor have become poorer and their numbers have increased. Those that did hard work and adjusted, and those that did not, have all had setbacks under the reeling impacts of external environment – exchange rate fluctuations, collapse of commodity prices, rising protectionism, high real interest rates, unsustainable debt burdens and servicing to cite only a few.

Hard put to meet these economic facts and indicators, the OECD group of countries in the informal assessment process shave taken recourse to the dictionary to question whether there a "crisis" in the world economy or in development, and whether or not commodity prices have "collapsed".

They have also had to resort to different yardsticks and periods to suggest that the world economy, and of the third world was improving, even if not at the speed everyone would desire.

When the assessment exercise was proposed by the OECD group of countries, the Group of 77 was clearly apprehensive that the exercise, and the inevitable difficulties in agreeing on the facts and the causes would be used to block serious negotiations at UNCTAD-VII on policy measures and actions.

These fears have not been removed yet, though in the consultations being carried out by the president of the Trade and Development Board (who has organised the informal assessment mechanism), the OECD group has now reportedly said that discussions and work at the Conference Committees in sectoral areas should not be contingent on agreed prior assessment.

Before Belgrade, the Group of 77 at Buenos Aires had formulated their platform and proposals for "recovery and development" and invited their partners in the north for a "dialogue".

The Williamsburg western summit welcomed the "openness to dialogue" evinced by the third world at the Nam summit in New Delhi and in the Buenos Aires platform, and said "we share their commitment to engage with understanding and cooperation in the forthcoming meeting of UNCTAD in Belgrade".

But this did not prevent the OECD groups soon after to dismiss the Buenos Aires platform as "too ambitious", and negotiations on them at Belgrade produced little.

Immediately thereafter began the U.S.-led attack on UNCTAD as an institution.

The lower profile and the guarded language that the secretariat has adopted since then, and the considerable lengths to which the Group of 77 went in reaching a compromise on the agenda and other issues, were in effect strenuous efforts on the part of all to accommodate the U.S., and draw them into the multilateral negotiating process.

For all the compromise, the U.S. would at best be represented at UNCTAD-VII by a fourth of fifth ranking state department official.

Unlike at Williamsburg, the recent Venice summit made no reference to the Harare Nam summit or the Havana Ministerial meeting of the G77 and their proposals.

It merely made some reference to cooperation with the third world, and spoke of UNCTAD-VII as providing "an opportunity to discuss with developing countries the major problems and policy issues in the global economy with a view to promoting common perceptions and effective policies for trade and development".

The June meeting in Paris of the OECD north-south Committee, for example, has set for the group "an important, albeit difficult, objective ... to encourage the evolution of UNCTAD away from emphasising the traditional north-south divide and towards a new dialogue leading to a strengthening of international cooperation".

Not spelt out specifically, but one often talked about by the OECD group of countries is the need for "differentiation" among the third world countries.

In the assessment exercise, the OECD countries have sought to highlight the "vast difference" among the third world group in terms of per capita incomes – between some of the least developed and the Gulf countries or between Tanzania and a Brazil or South Korea.

They sought to use this also to suggest that the G77 should not speak through one spokesman, but various countries and interests should present their own vies.

The G77 refused to walk into this trap, and its spokesman said that while there were differences in the economic conditions of countries within the group, "the disparities have increased between the developing and developed countries, and if there was any need for recognising the developing countries as an entity, it is stronger today than it was in the past".

In a recent interview in the June issue of the "development forum", Dadzie gave quite a listing of the large changes in the world’s political economy since UNCTAD-I, and among the negative ones mentioned "the declining support for internationalism and multilateralism".

It is not that the powerful countries of the north have totally eschewed multilateralism. Only they want it to be confined to areas of concern to them, and shove things of interest to the third world into the arena of bilateralism.

In a reference to this, the delegate of Peru told the current session of ECOSOC: "We cannot be asked to engage in multilateralism when it comes to drugs or terrorism, but in bilateralism to deal with the debt crisis or protectionism".

The seventy-seven in Havana put it differently: "The seventh session of UN Conference on Trade and Development provides the member states with a signal opportunity to strengthen multilateral cooperation for development and to strengthen the institution of UNCTAD itself. The results of UNCTAD-VII will have an important influence on the attitude of the developing countries towards other international negotiations and activities".

At his press conference on June 29, Dadzie said there was a general level of "somewhat more modest expectations" about the outcome of UNCTAD-VII, but would not elaborate on what he could consider would be the minimum for the success of the Conference.

He outlined some concrete results that could come out in resources for development, debt, commodities, trade, and least developed countries – all of them much less than in the Havana proposals of the G77.

But basic to the G77 is the preservation of the UNCTAD approach to international economic relations and systems, and preserving and strengthening its role as an institution and negotiating forum.

This, leading members say, will not come about merely through a conference declaration or statement, nor through a mere work programme for the secretariat.

It could come about only through concrete decisions – involving immediate or short-term actions in some areas, and starting a process of discussions and negotiations for medium- to long-term solutions in others.

Such a package would necessarily have to be "global", and such that every group of country or region would find something of value and interest to it, and thus revitalise multilateral cooperation and UNCTAD.

While the U.S. is opposed to this, and sees no more than a "think-tank" role for UNCTAD in between conferences, and the conference itself a place for exchange of vies, other OECD countries have begun to realise that such an approach and virtual end to UNCTAD would bring them into a confrontation course with the third world – not merely in UNCTAD but elsewhere and in all areas.

The EEC and others have privately told the Americans that Europe could not take responsibility for such a course, and EEC figures like Cheysson are trying to discuss with leading third world negotiators to see whether an acceptable outcome could be put together and pushed through.