Jul 14, 1998

DEVELOPMENT: UNCTAD COMPLETES MID-TERM REVIEW PROCESS

Geneva, 12 July (Chakravarthi Raghavan) -- The UN Conference on Trade and Development, at an executive session of its Trade and Development Board Friday concluded the 'mid-term review' of the implementation of the Midrand mandate, with the adoption of a text by the chairman of the review process, Amb. Benjelloun-Toumi of Morocco.

The document cut no new ground and clearly failed to take account of the sea-change in economic and development thinking (and revision of the neo-liberal market dogma) taking place as a result of the year-old Asian crisis.

The consultation process which began in February became so protracted that the final outcome was described by one delegation as "consensus by exhaustion" on the basis of a "take it" text rather than even the normal 'take it or leave it' text.  

At one point in the informal consultation process, the Moroccan ambassador had to repeatedly appeal to his colleagues in the Group of 77 for help in the consensus adoption of a text and the completion of a process on which he himself had invested so much time and effort.  

The statements made at the executive session showed that the major industrialized countries, still want UNCTAD to focus its work, not only on technical assistance for capacity building in the least developed countries, but even confine its analytical work to this, and do promotional activities for overall policies decided elsewhere.

The major industrial countries are already trying to achieve this by the process of cutting down the funds available through regular budgets, while providing extra-budgetary funding for activities to promote the interests of their corporations and private businesses. 

Bangladesh, for the LDCs, supported priority in use of UNCTAD resources for technical assistance to the LDCs and strengthening the office of the special coordinator..  

But a number of developing countries from various regions, and more so from Latin America and Asia, as also the "transition" economies supporting the need to focus UNCTAD's limited capacities and resources for technical support to the LDCs, made a distinction between this work and the analytical work on macro-economics and systemic issues which they said must have a global perspective and take account of the interests of all countries.  

In private, some of the developing countries, say that while they support providing help to the LDCs, confining the analytical and other work of UNCTAD to the LDCs, would result in other developing countries losing interest in UNCTAD and its work as the main focus of trade and development for the United Nations. And some of them say that even the LDCs would not gain, since in the 'game' of international bargaining, while the leverage of developing countries is limited, that of LDCs is virtually nil. 

They point in this connection to the experience of the Uruguay Round, when the industrialized countries split the developing world, by promising LDCs special advantages. But in the end, these were exhortatory references to the needs of least developed, and little or none when it came to actual, contractual, market access and other negotiations in goods and services.  

Some of the statements made at the Executive Session, complained of the inordinate time spent this year on the mid-term review, neglecting the substantive work, and also drew attention to the need, through budgetary resources, to increase the organization's capacity to undertake analytical work in macro-economic issues, keeping in view the endorsement by the UN Secretary-General of the agreement between UNCTAD and the UN's Department of Economic and Social Affairs (DESA).  

"We have spent more time and resources this year on deciding how to improve our work than on the work itself," the Indian delegate complained at the Board executive session Friday, describing the outcome as a "consensual endorsement" of the "chairman's draft, though not a negotiated document."  

"No Commission meetings have taken place this year," the Indian delegate complained. "There has been little by way of policy dialogue in a year when tumultuous events are taking place all over the world affecting trade and development. We would like normal work to resume. Much remains to be done. The Secretariat has spent far too much time preparing summaries of increasing length these last few months, while the inter-governmental machinery has been busy with what one distinguished delegate very aptly described as 'navel-gazing'. It is ironic that the limitation of number of pages for a document and number of days for a meeting which is so strictly imposed on substantive meetings was never considered by the Mid-Term Review Process."  

Thailand referred to the July 1997 Second UNSG Report on UN reform recognizing the "core competencies" of UNCTAD in macro-economic policy analysis, and the call for DESA and UNCTAD to review their activities in the macro-economic area on strengthening the UN work on macro-economic analysis.  

But the Mid-term review document has raised the concern that UNCTAD's present capacity "may not be fully adequate" to carry out the analytical work transferred from DESA. It was Thailand's understanding that "ways and means will be undertaken to strengthen UNCTAD's capacity in conducting its analytical work on international macro-economic issues." 

Jamaica said the exercise was both for looking at the extent of compliance with the Midrand mandate and the road ahead to Bangkok (where the next Conference is to be held). Though the UN's ACC (Administrative and Coordination Committee of the UN agency heads and specialized agencies) has spoken of the need to focus on poverty alleviation, there was little by way of recommendations on it in the mid-term review. It was also important for UNCTAD, in its work, to look at the international challenges as they affect development and growth, including a review of the international monetary and financial system and for new negotiations in new areas -- none of which were manifest at the time of Midrand.  

"It is important to concentrate on LDCs in developing their capacity. But policy analysis and timely preparations for negotiations are also important, and these cannot be limited to LDCs. Systemic issues affect all countries." The Jamaican delegate pointed in this connection to recent events which showed how many millions could be suddenly thrown into poverty, even in those countries that had successfully built up their capacities, simply because of systemic crises.  

The EC, Switzerland said in view of the limited resources, there should be priority to implementing the recommendations of the High-level Meeting on Integrated Initiative on LDCs, identifying ways to improve market access for developing country exports, and particularly those from LDCs, and capacity building.  

UNCTAD's work in investment should be in identifying and analysing the implications for development of a possible multilateral framework on investment, and such work should be primarily analytical.

The adopted chairman's text on mid-term review said among its recommendations that UNCTAD's unique contribution has been through its analytical function and linking research and action, analysis and policies.  

The Midrand declaration on partnership for development required further changes in the way business is conduct. UNCTAD should strengthen its links with civil society, in particular the private sector and international organizations.

And links with private sector, it added, should be aimed at tapping its innovative capacity, engaging in joint activities and supplementing funding, and clear guidelines should be developed for private-sector funding.  

UNCTAD's analytical work and technical cooperation activities should be better coordinated, and a strategy for coherence of regular budget and extra-budgetary programmes seeking to strengthen these linkages should be further pursued and linked to the outcomes of expert meetings, the commissions, the Working Party and the Trade and Development Board. 

The document also called on the UNCTAD's management to proceed speedily with recruitment and appointments to reduce the current "excessive vacancy rate" in the staff.  

Cost recovery should also be considered for certain technical cooperation programmes.  

More specifically, the document called for the strengthening of the Office of the Special Coordinator for the least developed, landlocked and island developing country programmes.  

UNCTAD's work on globalization and development strategies should have broader regional coverage, improved dissemination, and more work should be done on the pace and sequencing of domestic liberalisation policies.

The mid-term review document also endorsed the UNCTAD work in identifying and analysing the implications for development of issues relevant to a possible multilateral framework for investment, and said this should be "primarily analytical, and including consideration of development-friendly elements."  

UNCTAD should also pursue work to assist developing countries to strengthen their capacity to promote trade and development through FDI, and undertake further research on factors that play a part in private sector firms' choices of investment locations.  

UNCTAD should continue its analysis on the current development of TNCs and help developing countries to improve the general understanding of issues related to TNCs and their contribution to development, as well as policies allowing developing countries to benefit from TNC operations.  

In the area of trade, among others further emphasis should be placed on capacity-building, assisting developing countries and transition economies to participate effectively in international trade negotiations and acceding to the WTO, including through the elaboration of a positive agenda.