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Policy prescriptions for developing countries need changes

by Chakravarthi Raghavan

Geneva, 15 Feb 2001 --   Policies being promoted in developing countries by the Bretton Woods Institutions or the World Trade Organization  in the name of globalization need to be modified and changed, to reflect the needs and their conditions, former UNCTAD Secretary-General Gamani Corea said here Thursday at a luncheon meeting of the International Information Attaches Association.

Speaking on globalization and development, Corea said that over the last several years, particularly since the 1990s, globalization had become a slogan and a catchword. The initial euphoria about globalization had now given way to considerable disenchantment, since the expected benefits of globalization had not been achieved and the majority have not benefited, but rather marginalised.

However, said Corea, globalization as an objective -  of bringing countries and peoples together, creating a global economy and global village -  should not be jettisoned, but rather the policies pursued and the prescriptions for developing countries need to be changed and modified. No one was advocating, in opposing globalization, a return to the past of closed economies. But there was a need for changing the policies imposed on countries in the name of globalization.

There was a need for a mechanism of global economic governance.

The policies of developed countries that were prescribed for the developing countries need to be changed and adapted to reflect the needs of these countries.

The theory of free trade and liberalization in classical and neo-classical economics was postulated on a large majority of small players,  producers and consumers. This is not the case in the real world, and the policies promoted and prescribed by the WTO in the name of trade liberalization need to be adapted to take into account the particular situations and needs of countries.

“It is this failure that has created so much resistance in countries to the WTO,” Corea said.

The only recognition of the special situations of developing countries at the WTO has been in terms of giving more for implementation of commitments, but not the commitments themselves.

The World Trade Organization should give more thought to these questions.

But Corea was also critical of the developing countries at the WTO not joining together to promote their position and defend their interests.  Even the big developing countries like India or China, Corea said, do not have the bargaining strength and power by themselves.

Also, while it was useful to have decisions by consensus, there was no reason why developing countries who were in a majority do not resort to voting in order to defend their interests, he added.

Corea was also critical of the various conditionalities for policy changes in the IMF and World Bank loans and funds for the developing countries, and said that through these conditionalities these institutions were intervening and interfering in the domestic policies of countries.

The former UNCTAD head also underscored the need for developing countries to be provided enough leeway to ensure their ‘food security’ by being able to grow their own food needs.

Corea also wanted the United Nations to play a role in articulating policies for development, using some forthcoming meetings - the international conference on financing for development, the Rio-2 and other events - to articulate and promote the policies needed. -SUNS4837

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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