Don't be a "rubber stamp" to BWIs or WTO, says Razali

The Secretariat of the United Nations must represent "globalist-multilateralist thinking" on behalf of the maximum number of countries and peoples and for their maximum benefit, and must resist the Washington Consensus and being a rubber stamp for the Bretton Woods Institutions (BWIs) or the WTO, according to the UN General Assembly President, Ambassador Razali Ismail of Malaysia.

GENEVA: UN General Assembly President, Ambassador Razali Ismail of Malaysia, in addressing the high-level segment session of the UN's Economic and Social Council (ECOSOC) and speaking immediately after the UN Secretary-General Kofi Annan, was highly critical of the report of the Secretary-General to ECOSOC on the theme, "Fostering an Enabling Environment for Development: Financial Flows, including Capital Flows, Investment and Trade."

The ECOSOC's plenary debate at the high-level segment opened on 3 July, and had been preceded by a so-called policy-dialogue involving the heads of IMF, WTO, UNCTAD and a Vice- President of the World Bank - bringing out some sharply differing perceptions of globalization and international policy issues.

In setting the theme for this high-level segment, the ECOSOC last year, asked the secretariat to present a report, called upon it to prepare the report in collaboration with the Bretton Woods Institutions and the WTO.

The introduction to the report says it has been prepared by the Department for Economic and Social Information and Policy Coordination and Sustainable Development, in collaboration with UNCTAD and the World Bank, and with inputs from the IMF, WTO, UNICEF, UNDP, FAO, ILO, UNIDO and UNESCO.

Early this year, sources in New York had said that the discussions and inputs of UNCTAD, IMF, World Bank and the WTO showed some very sharp differences - both in terms of the analysis of the directions of the global economy and the appropriate policy choices and recommendations that should be placed before the governments.

With all four having different perceptions and views, at one stage, it was suggested that a consensus view at the lowest common level of generalities was neither feasible nor even desirable, and each of the institutions should provide 3- 4 pages of inputs, and these should be collated and presented to ECOSOC, with perhaps an introduction from the UN secretariat.

Some, but not all the institutions, were ready to go along with this approach, where their views would be clearly identified, and thus become the focus of criticism. The result has been a UN Secretariat document that appears to reflect the views of the IMF/World Bank and the WTO in terms of remits, and thus in effect appearing to endorse them.

UN Secretary-General's remarks

The UN Secretary-General who addressed the high-level segment earlier, stressed that the UN's primary mission remained development and this was the UN's most critical long- time task and "a pillar of peace, a foundation of stability, and a powerful force for preventive diplomacy and preventive action."

Annan said: "For the first time in recent history, we are in a position to build a free and open world economy in which all countries can participate and from which all countries can benefit. For the first time, long-cherished hopes of eradicating poverty seem attainable, provided that concerted political will is brought to the task..."

But unlike Razali later, Kofi Annan put a positive gloss on the outcome of the UN General Assembly Special Session (UNGASS) and said it had "demonstrated the power of the UN to bring world leaders together on issues of global consequence" and while the results were not all that could be expected, "it is nonetheless significant that, acting in a spirit of solidarity, partnership and mutuality of interest, the Heads of State and Ministers gathered in New York reaffirmed their commitment to sustainable development."

The theme of the high-level segment, Razali said, is undoubtedly important," though its open-endedness may result in the discussion being diffused, if not unfocussed."

The Secretariat paper, Razali complained (basing his views on the few people in New York to whom he had referred the paper), is "tilted more towards what is termed as the Washington Consensus, that is, reflecting too strongly the underpinnings of the World Bank and International Monetary Fund's points of view."

The Secretariat paper, Razali said, should have presented a more nuanced view of the world economic problems and the special problems of developing countries, where it is "general, more consonant with and applicable to industrialized countries and higher-income developing countries."

"The UN," the Assembly President said, "is the apex body of the multilateral system and needs to present a broader and more encompassing view of economic problems, and strongly project the need for higher levels of growth, accelerated development and geographically better distributed growth.

"It must take a longer view. In the context of high economic growth in developing countries, this requires a vibrant public sector playing a leading role."

If one looked at the deliberations and results of the UN General Assembly Special Session and the reasons for the paltry results that broke no new ground, "one would have to conclude that international cooperation in terms of dealing with the means of implementation has come to a very serious impasse," Razali said.

Decline in ODA

Even on the issue of sustainable development, "the darling of the developed world", there are scant resources - with ODA, for example, declining from 0.33% of GNP (at the time of Rio) to 0.28% in five years - Razali noted.

During UNGASS, and even during the discussions leading to the Agenda for Development, there was "much ambiguity" about need to reverse the decline of ODA, and little was allowed to be said about innovative financing or mobilizing new and additional financial resources. "In fact, a political veto is applied on really looking at innovative financing."

In the above context, asked Razali, what is the role of the UN in fostering an enabling environment for development? Is the UN purely to be normative, prescriptive or at best a consensus-maker without the ability to translate consensus into material and tangible terms?

The Special Session illustrated just how difficult it is to extricate a political consensus and honest appraisal of commitments that had not been honoured, even despite knowing it is not a pledging conference.

While there were many in the developed world who wanted to go further, there were a few, one or two most surprisingly, who held others back. "This is not a new situation regrettably; in the Global Environment Facility (GEF), the unwillingness of one results in replenishment and volume of resources being diminished in the context of burden sharing."

Referring to the important resolutions adopted by consensus at the 51st General Assembly about net flows and transfer of resources, and global financial integration and strengthening of collaboration between the UN and the BWIs, with tantalizing formulations recognizing that development required both resources and an enabling environment, Razali asked: "What would be the value of these resolutions if in actual implementation not much can be expected? If the favourite topic of sustainable development and programmes for environmental protection cannot find financing, what are the prospects for individual countries, especially LDCs and those economies which do not yet contribute to world growth and expanding trade?"

Adverting to the role of the UN in this context, Razali said that on the basis of the UNGASS he was convinced that "somehow the UN should also be allowed to deal with the hard issues of economics such as terms of trade, market access, financial resources, debt and so on."

"It works to the detriment of the UN, further weakening it in the context of the division of labour with the Bretton Woods Institutions and the WTO, to deal only with the so- called soft economics and social policy issues such as prescriptions for sustainability, humanitarian affairs and so on."

Some questions posed to the UN S-G

Quoting from his Erskine Childers memorial lecture in London earlier, in the first week of July, Razali said: "The South regards the UN as a place of last recourse... these countries believe in the centrality of the UN being a universal house... they have not accepted the so-called division of labour between the UN and other multilateral bodies where the UN is allowed to articulate only the normative description of soft issues. The frailty of such a role for the UN is most recently evident in the outcome of the UNGASS, reflecting the inability to grapple with the failure of governments to meet commitments, its weakness in being able to catalyze the means and resources to operationalize sustainable development. The UN has precious little to translate words into real action."

Stressing he was quoting this in the presence of the UN Secretary-General who is to unveil on 16 July, his proposals for comprehensive UN reforms, including the UN role in the economic and social context as well as development operations, Razali posed some questions to the Secretary-General:

Would these proposals, with governmental support result in an enhanced role for the UN in resource mobilization? Would the specialized agencies, programmes and funds of the UN continue to be dependent on arbitrary decisions by donors of voluntary contributions, without relating to the whole complex of development priorities and needs, but seen to be taking care of their favourite charity?

Would economic and social reform equate with expanded development functions that will draw a distinction between humanitarian emergency activities with development activities, and ensure no funds will be drawn from development activities for humanitarian needs? Even as development funds decline, 13% more funds go to humanitarian/emergency activities. And would the reforms result in a greater role for the UN in macro coordination, in relation to the BWIs and the WTO?

The UN's role in the economic and development issues require:

* greater seriousness on part of the developed countries to discuss economic issues, especially the hard issues, in the UN, without simply referencing similar discussions and activities in BWIs and WTO.

A statement can be made, Razali said, that developed countries are less and less inclined to do so, desiring to shape the international economic system elsewhere, and then applying a "fait accompli" through financial coercion on developing countries.

"Much as I love the environment," Razali added, "the developed countries cannot build economic partnership purely on the basis of environment and sustainability. They must deal also with the need for economic growth everywhere, and not just domestic unemployment, inflation and dismantling of their welfare states.... what do our discussions here really mean in the context of next week's (in the second week of July) NATO summit and the decision to expand NATO membership with financial implications hitting a ballpark figure of at least $30 billion?"

More heads of government must be involved in the real discussions at the UN in order to put life and political content into the debates, not just the annual general debate at the Assembly in September. "Foreign ministers have declining clout over issues of economics and development. We have to involve the other development and trade-oriented ministers and political leaders... and the UN must "compete" with the G7/G8 and such summits, decrying the majority of the human race excluded from that club which, together with global corporations and banks, have taken upon themselves to define development and lay down the 'new rules of the game' through the institutions that they control."

The UN, Razali said, must also address squarely the issue of globalization. But important as it is, the higher issue is growth and development and social justice and equity. Macro- economic coordination should not only be geared to financial stability and fighting inflation but also to growth and accelerated development everywhere, especially in the marginalized areas.

Not all developing countries are ready for integration into the globalized system. Many are being coerced into it prematurely; financial rules are being worked out predominantly in financial institutions elsewhere.

The UN must need to look at these, especially from developing countries and from a global perspective. Developing countries need to develop and strengthen their own financial and banking systems, and not to be over eager to link up with the global financial system. The UN must make the case that it is the developed countries that must open up their markets much more to developing country exports.

There is need for a joint effort between the UN General Assembly and ECOSOC, Razali declared. The three principal organs of the UN - the General Assembly, ECOSOC and the Secretariat, would need to coordinate with common purpose.

"Each has a distinct role: ECOSOC is a coordinating body; the General Assembly is a political/policy body. Neither should allow one body to be used by certain countries and make the other ineffective."

"The role of the Secretariat under the Secretary-General cannot be overemphasized. There is reason to believe that over the years, the Secretariat has got weaker and weaker. It must be revitalized - and we have the right Secretary-General for that. The Secretariat must represent globalist - multilateralist thinking on behalf of the maximum number of countries and peoples for their maximum benefit."

"The Secretariat must resist the Washington Consensus. After all, the UN was not established as the rubber stamp of the BWIs and the WTO." (TWE No. 165, 16-31 July 1997)

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