Statement of the Third World Network at UNCTAD's Trade and Development Board on 15 October 1996

The following is the text of the statement by Mr Chakravarthi Raghavan on behalf of the Third World Network at the 43rd session of UNCTAD's Trade and Development Board on 15 October 1996.

Mr. President:

At the outset we wish to join others to congratulate the President and members of the bureau on their election and we do hope this first substantive session after Midrand would be crowned with success.

We share the sentiments expressed by the Secretary-General and about the impending retirement of Mr. Roger Lawrence. Doubt, Mr. President, is as important an ingredient in economic policy analysis and policy-making. We have known Roger for nearly two decades, and he is one of those rare economists with commitment to development, who combines his extensive knowledge with "doubt", and ready to look at policies and suggest changes when they don't seem to be succeeding. Like UNCTAD, we will miss him.

We wish to join others in thanking the Secretary-General, Mr. Rubens Ricupero, for his important opening address and sharing with us, his thinking, and particularly his views about need to bring 'hope' to the people.

We have read carefully the documents before the Board and in particular the Trade and Development Report [TDR] and the World Investment Report [WIR], and have listened to the views of experts on the TDR at the informal plenary on 9 October, and the discussions, papers and views at the Global Investment Forum on 10 October. We don't want to repeat them here.

We wish to offer some preliminary views and comments.

Trade and Development Report 1996

In line with its established reputation, the TDR has brought a high quality of analysis to the output, and more so in its study of the East Asian experience and its applicability to others. While we largely agree with its broad thrust and conclusions, we have some doubts about the space available for developing countries under the WTO system. Individual developing countries, with some constructive thinking, could expand the space available to them, and the LDCs could too if they are able to overcome their other constraints, it has to be clearly recognized that the industrial countries, as demandeurs in the Uruguay Round have erected many barriers and obstacles in the way of development of developing countries. The level playing field they have created for themselves is so high that few from the developing world can climb on to them.

But our point of departure has to be - not a shrugging of shoulders and advice to "adjust" - but look at the effects and work to change the constricting rules of the game. As the UNCTAD Secretary-General pointed out, this type of globalization, and the rules of the game that enable it, are not like the "rules" of the planetary system of our physical universe. They are man-made, can be changed, hopefully by dialogue and joint actions of the developing world and cooperation of the North.

NGOs of the South, and several of the North, have begun to address themselves to this issue, and we would encourage our governments in the South, and the enlightened sections of governments in the North, to begin this process. We stand ready to provide within our limited capacity, whatever support the developing nations need in this matter.

In this spirit, the Third World Network organized and held in September, in Geneva, a seminar for developing country delegations on the WTO, the forthcoming Singapore Ministerial Conference and looking beyond. Some of the issues raised in the TDR and the WIR figured in the papers presented by experts and discussions at the seminar. The seminar was well-attended and delegates remained and fully participated in the two-days of the sessions - even though unlike donor-driven seminars for investment and environment and so on, we could not offer any hospitality!

We are still in the process of editing the very large documentation that was presented and made available by experts on the outcome of the Uruguay Round and its many agreements. More detailed assessments of costs and benefits to individual countries and their peoples are in the process of being made, individually in countries. But the assessments already made show the reality to be far removed from the initial euphoria on the basis of which most countries signed on to the Marrakesh agreement.

Imbalance and asymmetry

A clear view emerged in our seminar, that the outcome has been one of imbalance and asymmetry, that the benefits of the new trade order and liberalization is at present merely one of "promises" for the future, while the costs and losses for the South are upfront now. Some of the initial econometric estimates and claims that came out of the Bretton Woods Institutions, as well as the WTO secretariat, have been found to be highly exaggerated.

Over the last year and half, members of our network, in their travels around the world, have been meeting with other non-governmental organizations and grassroots movements, and local business communities, and participating in their discussions. We cannot and do not claim to speak for any or all of them. But the impression left on us which we do want to share with you is a growing feeling in almost every country and people, of worry and insecurity, over jobs and incomes and constantly falling living standards, yes, a sense of lack of hope in the future, particularly among the young - and with good reason.

The advice to persevere with the "reforms" and follow the "neo-liberal" Washington Consensus, to be patient, make more adjustments and undergo pain so that reward would come later is like the theology of fundamentalist churches. The sooner failures are recognized and policy changes made the better it would be for everyone, including those who are sitting on top of the pyramid and don't look down at the reality on the ground.

The proof of the pudding is in the eating. And what matters is the public perception of the effects of this globalization, and more so in a world where the democratic space and debate is expanding, and people no longer pay much attention to the established media that are part of the transnational system and corporate culture and sing hosannas about the success.

It is undeniable that the public perception is negative. The euphoric promises of the neo-liberal order and the TNC-driven globalization, is seen by the public as creating great affluence for a few and marginalization for the vast majorities, both in the industrial and developing world - with very large, and politically and socially unacceptable inequities within societies and among countries. A small percentage in a few countries are prospering and adding to their wealth (and flaunting obscenely, their high-life styles).

The contours of this inequitous national and global society have been spelt out in this year's Human Development Report, and we don't want to repeat them or cite them here.

But unless the asymmetries built into the rules of the game in trade, money and finance, and the non-transparent and non- democratic way these international economic institutions take decisions are changed soon, a very bleak future seem to face the vast majority of the population of this world. This is not politically or socially sustainable.

Globalization and integration of the nations into a single world economy could be beneficial, but only if these asymmetries are corrected. As Prof Deepak Nayyar put it in the informal plenary, the strategies of asking developing countries to "integrate fast" into the global economy, with asymmetric rules of the game, with promises of vague benefits to those who play the game and deprivation and marginalization to others who don't play the game or can't will not work.

This globalization strategy is trying to repeat the processes and strategy of the late 19th century which in our countries became colonial rule and economics for the benefit of Europe and North America. The new attempt will meet the same fate as the old, and in a shorter time-span.

As surely as the 19th century liberal state, and the command economies and Keynesianism that came as a response failed to deliver, the present neo-liberal policies pushed with dogmatic fervour have failed.

There is need for an objective look at the facts on the ground, and an effort to inject correction into the present policy frameworks. UNCTAD, with its development focus, is best suited to do it. But it must do so with some boldness, and be willing to think, and think the unthinkable. It can more easily go outside its own available expertise or that of the intergovernmental system to seek outside expertise.

But it needs to bring a better balance in participation to reflect varying views. We do acknowledge and thank both Secretary-General Ricupero and the new head of that division, Prof Mytelka, intervened, though at a late stage, and sought to bring a better balance into the discussion, which otherwise would have remained a propaganda exercise by TNCs. But future activities would need better substance and less of showmanship to promote genuine dialogue and debate.

State dirigism cannot bring about development, but neither can dirigism of TNC system and the efforts of individual TNCs to maximize their profits and global capital accumulation. TNCs are in the business of making profits, but governments are in the business of promoting development.