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"DON'T ROB UNCTAD OF ITS SOUL AND POLICY WORK"

THE FOLLOWING IS A SPEECH OF MARTIN KHOR, ON BEHALF OF THIRD WORLD NETWORK AND NGOS PARTICIPATING IN UNCTAD-IX, AT THE MINISTERIAL ROUNDTABLE ON THE FUTURE WORK OF UNCTAD, AT UNCTAD-IX CONFERENCE, AT MIDRAND, SOUTH AFRICA on 3 MAY 1996.

There are about 120 NGOs present at UNCTAD-IX We are grateful that in the text of some documents and in speeches by the UN Secretary General, the UNCTAD Secretary General and some delegations, the important role of civil society and NGOs is recognised.

NGOs have played an important role in the many UN Conferences in recent years and also in the work of many agencies. Indeed in those activities of the UN that NGOs have been active in, there has been greater public interest and public profile for the issues being discussed.

UNCTAD therefore also has to change, to get the active participation of more NGOs in its activities.

A revitalised UNCTAD must facilitate the entry of more NGOs into its forum and activities through more NGO-friendly accreditation mechanisms.

It should improve its dissemination of information to NGOs and the public. Regular workshops and information sessions should be organised. NGOs should be given more space and access to participate, such as more slots to speak and intervene, to attend meetings and places to put their documents.

On the proposal to establish a Development Senate for UNCTAD, we find this an interesting proposal and welcome this in principle, but it has to be part of an overall policy on participation of NGOs in UNCTAD, and not as a substitute.

There is an absence of labour and small farmers' representatives in the proposed Senate composition. This should be rectified, and the share of NGOs and these social movements should be raised to at least 40%.

The terms of reference for the Development Senate should be decided after adequate consultations with NGOs.

We are also against the proposal that the Senate be funded by big business as this would make it biased towards business interests. Instead the financing of such a body should be part of the UNCTAD budget or a separate Trust Fund. Governments should ensure that there is fair and adequate representation of developing country NGOs by providing for their funding.

NGOs at UNCTAD-IX have also had many discussions on the issues of globalisation and the future of UNCTAD. We are very concerned about the globalisation and liberalisation process as we realise its effects are inequitably distributed. Whilst some stronger countries and individuals may benefit greatly from growth and exports, many other countries and people suffer its adverse effects through greater marginalisation, and poverty. This is borne out by the wide experiences of NGOs working in communities throughout the world.

The safety net approach of giving aid to those adversely affected is not good enough. Instead, NGOs believe that globalisation cannot be passively affected but that governments and international agencies must control, regulate and rechannel globalisation to make it socially and environmentally accountable.

We are concerned about the shift of powers from UN agencies such as UNCTAD that have a broad social and developmental approach to the Bretton Woods and WTO institutions which are by nature more narrowly oriented to growth. Due to this shift, social and development interests have made way to business interests. The social dimension is increasingly left out in economic and trade policy making, causing many serious social problems and political instability.

We are also concerned that here at UNCTAD-IX some Northern governments are trying to restrict UNCTAD's work to only technical aid to least developed countries (LDCs).

NGOs call for a revitalised UNCTAD with a strong mandate also for analytical work, a supportive role for developing countries and to provide a discussion forum for development including trade linkages with investment, finance and technology.

Having UNCTAD do only technical aid to implement policies decided elsewhere would rob the world of its most important and needed functions.

Analytical work is the key as it sets the framework and design of macro-economic and development policy. If the policy design is wrong then the operations will be geared wrongly, leading to wastage and social problems. The design then has to be changed.

In the case of macro-economic policy, it is widely recognised, including in the Social Summit process of 1995 that structural adjustment programmes have led in many poor countries to greater poverty, social dislocation and upheaval. The major fault was that the social element was missing in its policy design, and that only a single model was applied to all countries, despite their differing conditions. The Social Summit resolved that the design of structural adjustment has to be changed to include the social dimension. UNCTAD in this regard can play an important role. It has a project on the East Asian experience to analyse the factors that made growth possible. The lessons can be applied to other countries, for instance in Africa, to provide a range of possible policy options.

In the trade area, the analytical and policy role of UNCTAD is even more important, especially with the emergence of the WTO. The original concept of the International Trade Organisation (ITO) a half century ago envisaged the need for an agency with multiple functions, of which the making of rules to regulate trade between countries was only one function. Other roles included promoting development of poor countries' capacity, employment, fair commodity prices and regulating restrictive practices of large corporations.

The ITO of course never materialised. Rule-making for trade liberalisation became GATT's and WTO's role. It was recognised that the other functions were still needed, so that other agencies were formed, with UNCTAD to take care of the development dimension, the ILO to look after employment and labour rights, and so on. The co- existence of agencies is needed to attain a more balanced and comprehensive trading and economic system that would be more fair and thus more sustainable.

Therefore it is a great mistake to confuse the WTO with the original ITO concept and to say that with the creation of the WTO we can now erode the roles of or to eliminate UNCTAD. The reality is that with the strengthening of the liberalisation role of GATT- WTO, with the inequities that this generates, we need UNCTAD and its social and developmental dimension even more than ever as a counterbalancing and complementary force.

On the opening day of UNCTAD-IX, we heard the WTO Director-General saying that the trading system's role was to favour the most competitive producers and raise resources through the most efficient way. How these resources are to be used or distributed is not the WTO's responsibility but that of other international institutions or governments.

In other words, equity or the distribution of benefits and costs of trade liberalisation is not in the realm of WTO's responsbility of rule-making.

Yet we have heard many delegates of developing countries raising the equity issue and the problems of implementing the Uruguay Round agreements. We predict that an inequitable system of trade rules will lead to social problems and upheaval. We are on the verge of making the same mistakes as with structural adjustment, with serious flaws in the design of policies and rules.

It is much more fair and cost effective to build fairness and the social dimension into the trade rules, than to base these rules on equal competition between unequal parties, and then later having to face the serious adverse consequences of the marginalised.

The role of UNCTAD then should not just be to provide technical aid to implement the rules but to help ensure that the rules are fair. UNCTAD should therefore monitor and assess present rules, identify problems which can be improved, help analyse the social and development aspects of new issues.

As some of the delegations suggested, before new issues are brought up in the WTO, with its unsuitable tense atmosphere of negotiations, they should be discussed in UNCTAD, where the many facets of these issues can be more thoroughly discussed. Through this process, only issues (or aspects of an issue) deemed appropriate should be brought for discussion to the WTO, and within the appropriate contextual framework.

Developing countries are also still facing massive problems arising from unequal international economic structures, that result in several hundreds of billions of dollars of financial resources moving from South to North. UNCTAD needs to strengthen its contribution to debt relief, improving aid and tackling the commodities problem.

Some countries, like Canada, have made the argument that UNCTAD covers too many issues and should give up the subjects covered by the World Bank, or IMF or WTO, on the grounds that there is duplication. These same countries should actually look at the overbloated bureaucracies and salaries of other institutions.

We agree of course that UNCTAD has to change, to be more relevant, to modernise the way it deals with civil society. But we should not make use of the argument that UNCTAD needs to be more efficient in order to eliminate the most important contents of UNCTAD's functions.

As the examples given just now on structural adjustment and the WTO show, it is vital that UNCTAD participate in the design of macro- economic and trade policies by bringing in the development and social dimensions. This can be done through the Secretariat's analytical work as well as through the use of UNCTAD as a discussion and consensus-building forum.

It is inappropriate to restrict UNCTAD's role to merely help in implementing policies made elsewhere (in the WTO, World Bank or IMF) or to handle the social fallout and adverse effects of such policies. Instead, UNCTAD must be able to bring its unique perspectives (or help governments to evolve such perspectives) to the policy design table.

UNCTAD must be driven by the demand and needs of developing countries and not by the interests of the donors. Those who provide more of the funds should not make use of this to whittle away the real functions of UNCTAD, robbing it of its soul and leaving a shell.

UNCTAD must be preserved and strengthened in its role as promoter of the people's interests, of the South's development nationally and of greater balance and equity in the international economy.

Martin Khor is a Director of Third World Network.


 


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